The global need for adaptation finance far exceeds current public and private flows, leaving people and assets increasingly vulnerable to the worsening impacts of climate change. A key reason for this gap could be incomplete information on the costs and benefits of addressing climate risks. Adaptation is often narrowly seen as a way of avoiding climate-related losses—yet it can also deliver economic, social, and environmental returns. Without a more complete understanding of these benefits, neither risks nor returns can be accurately calculated and priced. This gap in understanding impedes the mobilization and allocation of financial resources to adaptation.

This study aims to bridge that information gap. Using the Triple Dividend of Resilience framework, this paper evaluated the full benefits of 320 climate adaptation investments across 12 countries, revealing the high and wide-ranging returns of investing in adaptation. It finds that every $1 invested can yield over $10.50 in benefits, with average annual returns of 20–27%. The findings offer strong evidence for scaling adaptation finance, strengthening data and evaluation methods, and aligning adaptation with mitigation to maximize impact.

Key Findings:

  • This study created a database using the triple dividend of resilience framework to evaluate the full benefits of 320 adaptation investments in agriculture, water, infrastructure, and health across 12 countries between 2014 and 2024.
  • Overall, US$1 invested in adaptation is expected to yield over $10.50 in benefits over a 10-year period. The evaluated investments cost $133 billion in total and may generate benefits of $1.4 trillion, with typical returns ranging from 20 to 27 percent.
  • Good adaptation is also good development. The evaluated investments show significant and diverse benefits for all three dividend types: avoided losses, induced economic benefits, and social and environmental benefits. Since the average value of the second and third dividends often exceed the value of avoided losses, the viability of many adaptation investments does not depend on the anticipated disaster occurring.
  • Almost half of the evaluated adaptation investments yield mitigation co-benefits, reinforcing potential synergies with mitigation activities and opening additional finance opportunities through carbon finance.
  • Multilateral development banks and other development finance institutions, funds, and governments can improve their appraisal methods for adaptation investments by applying the triple dividend of resilience framework. The improved illustration of diverse returns to adaptation investments could motivate investors and reduce the adaptation finance gap.

Preview image by JC_STOCKER / Adobe Stock