// SUSTAINABILITY: CLIMATE CHANGE
W hen a country or community lacks sufficient, predictable, timely and accessible fund- ing to minimise the physical impacts of climate change, it can become trapped in a vicious cycle. Without resilient infrastructure, countries face greater economic losses following a climate dis- aster. Ending up with a weaker fiscal position in the aftermath means that the ability to spend on strengthen- ing resilience would worsen, creating a downward spiral for the country’s people and economy. To avoid such an outcome, sustained international support is needed for emerging and developing countries to access financing to build resilience. Targeting that support requires new analytical approaches to guide those investments where they are truly needed most. Rethinking adaptation funding for a fairer, smarter future
As climate risks intensify, the gap between adaptation needs and available finance continues to widen. To break the cycle, funding must be directed according to real exposure to climate hazards and each country’s capacity to access capital Gautam Jain, senior research scholar, Columbia University’s Center on Global Energy Policy, and Jeffrey Schlegelmilch, director, National Center for Disaster Preparedness, Columbia Climate School
about the widening adaptation financing gap, which the United Nations Environ- ment Programme estimates to be up to $359 billion per year. With Earth set to exhaust its carbon budget to limit tem- perature rise to 1.5°C in the next few years, the need to ramp up investments in climate adaptation will only rise. More companies are realising the threat to supply chains and physical assets from climate hazards, but pri- vate sector–led funding remains limited due to inadequate immediate finan- cial returns. The lack of revenue streams from resilience-strengthening pro- jects makes financing a challenge, even though these investments are good for economies. The World Economic Forum estimates that investing 1% of gross domestic product in climate adapta- tion measures can help avoid economic losses of up to 4% of GDP in the same timeframe. The primary dependence on public sources exposes other problems. For developing countries, the desire to strain their already weak fiscal position by spending now to avoid future losses is generally not politically palatable. Grants and concessional loans from multilateral development banks,
LIMITED FUNDING FROM GOVERNMENTS AND PRIVATE SOURCES
International public flows to emerging economies for financing adaptation are lagging significantly, amount- ing to only $28 billion in 2022. The first global stocktake in 2023 warned
86 // G20 SOUTH AFRICA: THE JOHANNESBURG SUMMIT 2025
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