The 2015 Adaptation Finance Gap Update finds that earlier global estimates of the costs of adaptation are likely to be significant underestimates. UNEP’s new report presents key findings on adaptation costs and finance since the first global Adaptation Gap Report in 2014 (AGR 2014) and preliminary findings from the forthcoming 2016 assessment. The report was presented at a joint UNEP and UNFCCC side event on Friday (Dec. 4), and at an EU Pavilion side event on Saturday (Dec. 5). The Update is intended to support discussions at COP21 by drawing on insights concerning adaptation costs and related finance needs noted in the INDCs.
Specifically the report notes that costs might be higher than those projected in AGR 14, which found that adaptation costs in developing countries could be two to three times higher than the US$70-100 billion per year between 2010 and 2050 for developing countries cited in the IPCC’s 5th Assessment Report by 2030 and even four to five times higher by 2050. Figure 2 illustrates the adaptation gap as estimated in AGR 2014.
The Adaptation Finance Gap Update highlights the UNFCCC’s finding that more than 80% of submitted INDCs include explicit adaptation components, with targets for adaptation in key sectors or for key vulnerabilities. The most relevant sectors in terms of commitments and needs in the submitted INDCs, as shown in Figure 3, are agriculture, water, health, coastal, forestry, ecosystems and biodiversity, infrastructure, and tourism.
Different points of departure and metrics limit the extent to which the information on adaptation finance can be aggregated and compared, yet UNEP is able to draw several conclusions from available data: immediate and enhanced mitigation is needed to help limit the significant and increasing costs of adaptation, adaptation finance flows have increased but still fall short of funds needed, and enhanced emissions reductions and increased public and private finance can help bridge the adaptation finance gap.
In 2014, about US$25 billion in public finance was dedicated to activities with explicit adaptation objectives, of which 90% was invested in developing countries. The sources and intermediaries are shown in Figure 4. Development institutions have been providing the greatest amount of finance, while the East Asia and Pacific has been receiving the most.
Going forward, countries have made conditional commitments for adaptation in their INDCs based on the availability of financing. Sources of funds include public and private financing, as well as the Green Climate Fund and the Global Environment Facility. Figure 5 shows which regions are planning to rely on which financing options.
The Adaptation Finance Gap Update concludes that there will be a major adaptation finance gap, especially after 2020, unless new and additional finance for adaptation becomes available. Adaptation costs in 2030 are expected to be in the range of US$140-300 billion per year, much higher than the US$25 billion spent on adaptation in 2014, thereby signifying the potential for a large adaptation gap.
(Image: Adaptation Finance Gap Update cover. Photo credit: UNEP)