Accelerating adaptation finance is an increasingly urgent priority for global climate action, particularly for developing countries and communities facing the brunt of climate impacts. At this year’s UN Climate Change Conference (COP30) in Belém, Brazil, there’s an opportunity for negotiators to adopt a new adaptation finance goal.

There are different views of what such a goal could look like. Some developing nations have emphasized that any goal would likely not meet adaptation needs. Meanwhile, many developed nations have resisted a new goal, pointing to last year’s agreement on a new goal of at least $300 billion for all climate finance (known as the new collective quantified goal or NCQG) as a final agreement that shouldn’t be reopened.

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But at COP30, tripling the $40 billion adaptation goal agreed to four years ago at COP26 to create a new $120 billion goal is gaining traction. For example, during negotiations this week, groups like the Independent Alliance of Latin America and the Caribbean and the Least Development Countries have advocated for such a target.

We explore here whether a tripling of the adaptation finance goal would be possible — and find that it could be by 2035, the target year for the $300 billion NCQG. 

What's Needed for a New Adaptation Finance Goal

 Developing countries — excluding China — need around $400 billion per year by 2035 to address adaptation and resilience needs, according to the Independent High-Level Expert Group on Climate Finance, a panel of economists, finance experts and policymakers. However, global adaptation finance is still far from this amount, even though investments will pay off trillions of dollars in avoided losses, many lives saved, economic, environmental and social benefits and greater stability amid the shocks of a warming world.

At COP26 in 2021, developed countries agreed to at least double their adaptation finance for developing countries from 2019 levels of around $18.8 billion to approximately $40 billion. Although recent reports suggest this might not be achieved, indications from the European Union and the United States on their adaptation finance in years 2023 and 2024 mean that it may well be.

Using 2035 as the target date — and considering that the adaptation goal would become part of the total $300 billion of the goal agreed to at COP29 — we found that tripling the adaptation goal is possible. But every relevant source of finance will need to step up, and the system will need to work better as a whole. Here’s one way the tripling could be achieved:

Multilateral Development Banks Play a Vital Role

To achieve $120 billion in international adaptation finance, multilateral development banks (MDBs) will need to play a critical role. According to our calculations, they will need to provide almost 60% of a tripled goal, or just under $70 billion. This is around the same percentage that they provided in 2022 (the latest complete numbers available; $26 billion divided by $40 billion).

 In June of this year, during the fourth International Conference for Finance and Development in Seville, Spain, governments stated that they “encourage MDBs to further increase and optimize MDB annual lending capacity with the view to potentially tripling it while ensuring their financial sustainability.” Tripling MDB finance has also been recommended by a G20 Independent Expert Group in 2023, and by the Independent High Level Expert Group on Climate Finance. How much funding tripling MDB finance would result in depends on the baseline used, but in 2023 the G20 Independent Expert Group on tripling put this number at $390 billion.

Using this $390 billion number, if 50% were to go to climate action — close to current MDB targets — MDBs would provide around $195 billion in total climate finance by 2035. The MDBs themselves have committed to increasing their climate finance to $120 billion by 2030, with adaptation finance making up 35%. If we keep this same percentage but apply it to the $195 billion figure, by 2035 MDB adaptation finance would stand at $68 billion.

 Note that we also assume here that this new goal would be guided by the same approach that was agreed for the $300 billion goal at COP29, in terms of “the voluntary intention of Parties to count all climate-related outflows from and climate-related finance mobilized by multilateral development banks towards achievement of the goal set forth in this paragraph.” We therefore count all MDB adaptation finance here, not just the share attributed to developed countries.

One challenge standing in the way of reaching this amount of MDB adaptation finance is that it is easier to increase funding for mitigation than adaptation. Mitigation activities, such as energy efficiency and the buildout of clean power generation, are concentrated in wealthier developing countries and often entail a financial return and so can frequently be financed with less concessional public finance and by mobilizing private finance. By contrast, adaptation investments often bring significant economic, social and environmental benefits but little direct financial profit, like investments in wetlands restoration for flood protection or climate smart agriculture. Adaptation investment needs are also often concentrated in poorer countries, which require more highly concessional public finance.

Increasing highly concessional funding from the MDBs is difficult as it requires higher contributions from governments to the MDBs, which may not be realistic given the constraints on overseas developing assistance in the current global political environment. Increasing adaptation finance may therefore require growing not just the total amount of available concessional finance, but also the percentage of concessional finance for adaptation.

For example, the International Development Association (IDA) — the World Bank’s concessional lending window — provided on average around 20% of its funding toward adaptation over the last three years (fiscal years 2022-2024). If all of IDA were to triple from $33.8 billion in financing in fiscal year 2025 to around $101 billion, and if the percentage of adaptation finance stayed at 20%, IDA’s adaptation finance would go from $5.1 billion in fiscal year 2024 (latest number available) to around $20 billion by 2035.

However, tripling IDA will be challenging given the financial and political support required to make this happen. Thus, to triple adaptation finance from the World Bank, the percentage of IDA finance that’s allocated for adaptation would likely also need to increase. If adaptation finance instead made up 30% of IDA funding, total IDA funding could double instead of triple and adaptation finance would still reach around $20 billion. If IDA funding stays flat, adaptation finance would need to make up 60% of IDA funding to reach $20 billion.

Bilateral Funding Must Rebound After Low Period

Bilateral finance — which flows directly from one country to another — makes up a second important source of adaptation finance. By our estimate, this source will need to grow over the next 10 years, but it will be even more challenging than growing MDB concessional finance given today’s political constraints and priorities. Unlike MDBs, bilateral funders also are typically not able to use capital markets to increase the amounts of funding they can provide. 

The latest complete numbers available for bilateral finance are from 2022, when bilateral sources provided $10.6 billion, or one third of international adaptation finance. Given total adaptation finance likely increased in 2023 and 2024, we assume that this number will go up for those years, though we don’t yet have the data on how much. Our rough assumption is that bilateral finance reached $15 billion in 2024. From 2025, the impacts of reductions in climate finance from developed countries like the U.S. will be felt more strongly and we therefore assume that adaptation finance will stagnate.

To reach a 2035 tripling goal, this downward trend will need to shift. We assume it starts to do so in 2028, sending bilateral adaptation finance upward again at around 3% to 4% per year (a bit over average inflation) — reaching $20 billion by 2035.

Again, we assume the rules for the $300 billion climate finance goal apply, and so we primarily included contributions from the same bilateral contributors to the 2025 $40 billion goal (also known as Annex II countries) and we added $2 billion to reflect finance from other countries that may voluntarily choose to contribute to the new goal. This may be an underestimate.

Increased Rate of Private Finance Mobilization

A new adaptation finance goal could benefit from increased private finance flows leveraged by public funding.

Mobilization of private finance can, for example, come in the form of public co-financing or loan guarantees that encourage private investment by reducing investment risks. By our estimate, private finance mobilized for adaptation will grow by 2035, in part from increased public funding that’s used to mobilize private contributions, and in part because the rate of mobilization per public dollar will go up. The increased mobilization rate will be the result of a growing emphasis on identifying ways to shift private investments toward adaptation, the expanding markets for resilience solutions and a growth in private sector awareness of climate risks and opportunities. The rate will stay significantly lower, though, than the mobilization rate for mitigation investments, given the different overall financial returns on investment.

Using numbers from the Organization for Economic Cooperation and Development for 2022, we calculate that bilateral and multilateral adaptation finance mobilized 11 cents of private finance for every $1 of public adaptation funding. We estimate that this mobilization rate will slightly increase, reaching 18 cents per dollar. This would result in around $18 billion in mobilized private finance by 2035.

Multilateral Climate Funds Meet and Exceed Tripling Targets, But Remains Small

Multilateral climate funds will likely continue to play a vital role as providers of grants and highly concessional finance for adaptation, but their total funding will remain small relative to other sources of finance.

At last year’s COP29 in Baku, Azerbaijan, countries agreed to triple the size of the multilateral climate funds by 2030 compared to 2022. In 2022 these funds provided $1.1 billion in adaptation finance, which if tripled would reach $3.3 billion. We estimate that increased emphasis on adaptation finance and continued growth of these funds between 2030 and 2035 would result in around $4 billion in adaptation finance from these institutions.

Filling the Funding Gap

While the traditional sources of finance mentioned above will need to make up the great majority of international adaptation finance counted toward a new goal, it will likely not get us the entire way there. For this, governments will need to be bold and creative. One option is to increase use of Special Drawing Rights (SDRs) for investments in resilience in developing countries. SDRs are reserve assets allocated to members of the International Monetary Fund; advanced economies may have a surplus of SDRs that can be rechanneled to other countries or employed to back existing funds that are focused on resilience. Another is to significantly grow the number of countries committed to implementing new fees or taxes on activities like private aviation, cryptocurrency or financial transactions.

If implemented by a significant number of countries, these types of actions could give rise to large amounts of funding, with some estimates suggesting that new levies or fees could raise over $100 billion per year. Achieving such large-scale numbers would require overcoming significant political hurdles. To count these funds toward an adaptation finance goal, governments would also need to commit to channeling these resources to adaptation investments in developing countries. Because of this, we use a still ambitious but more conservative estimate of $8 billion for this category of activities.

Scaling Adaptation Finance

Adaptation finance is critical to resilient and just economic development around the world. As climate risks intensify, so does the urgency for a financing framework that is predictable, equitable and responsive to the real needs of vulnerable countries and communities. A new adaptation finance goal could potentially reinforce global recognition that adaptation is as important as mitigation and help achieve the balance countries have agreed to while addressing adaptation financing gap.

A new goal should be followed up with work to ensure adaptation finance flows to the countries, communities and investments that need it most. 

By our estimates, a tripling of the goal is possible, but countries need to seize this moment with ambition and solidarity. A new global goal on adaptation finance can become a foundation for a more resilient, climate-secure future for all.