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The United Nations Environment Programme (UNEP) has warned that developing countries will require about $305 billion annually by 2035 to adapt to the growing impacts of climate change, far exceeding current international public finance flows.
The warning is contained in UNEP’s 2026 Adaptation Gap Report, titled Ready? Not, which says the world is inadequately prepared for worsening climate impacts as global warming threatens to exceed the 1.5 degrees Celsius threshold.
The report identifies inadequate adaptation finance, institutional barriers to implementation and mounting climate-related losses and damages as major challenges confronting vulnerable countries.
It estimates that international public adaptation finance from developed to developing countries would need to increase substantially to meet the growing needs of developing nations.
According to the report, even if the COP30 aspiration to triple international public adaptation finance by 2035 is achieved, the resulting funding would cover only 20 to 29 per cent of developing countries’ estimated needs.
UNEP Executive Director, Inger Andersen, said the world was not adequately prepared for existing climate conditions, let alone the consequences of global warming exceeding 1.5 degrees Celsius.
“The world is not ready to adapt to current climactic conditions, never mind what overshoot of 1.5°C will bring,” Andersen said.
She urged governments attending COP31 in Türkiye and subsequent climate negotiations to intensify efforts to achieve the COP30 Global Mutirão aspiration of tripling adaptation finance by 2035.
Andersen, however, stressed that even higher levels of funding would be required to save lives, prevent losses and damages, and protect economies from worsening climate impacts.
Adaptation finance remains inadequate
The report puts international public adaptation finance flows from developed to developing countries at between $28.2 billion and $31.7 billion in 2024, representing an increase of about $1 billion over the previous year.
Although funding to least developed countries (LDCs) and small island developing states (SIDS) increased in real terms between 2019 and 2024, the report noted that the flows had declined from their 2022 peak.
It said funding should be increasing rather than declining, given the growing threats posed by climate change.
The estimated annual adaptation finance requirement of $305 billion was based on an assessment of countries’ nationally determined contributions, national adaptation plans and model-based estimates.
The report noted that the figure largely excluded the private sector’s own adaptation needs, which could almost double the overall requirement.
Under the COP30 Global Mutirão decision, countries called for efforts to at least triple adaptation finance by 2035.
Depending on whether the increase is calculated from current finance flows or the Glasgow Climate Pact baseline, international adaptation finance could rise to between $85 billion and $120 billion annually by 2035.
However, after adjusting for inflation, the projected increase would cover only 20 to 29 per cent of developing countries’ adaptation needs.
The report said the outlook was comparatively better for LDCs and SIDS, as tripling finance to these countries could meet between 49 and 83 per cent of their estimated requirements.
South-South and private finance increase
Despite the significant funding gap, UNEP identified some positive developments in climate adaptation financing.
It said the Glasgow Climate Pact target of doubling adaptation finance from 2019 levels to $40 billion annually by 2025 could still be achieved, although progress remained below the required pace.
Multilateral Development Banks were expected to have increased their adaptation financing significantly in 2025, but meeting the target would also depend on whether bilateral development assistance declined.
The report also highlighted growing financial cooperation among developing countries.
Contributions through multilateral development banks and direct South-South cooperation increased from $3.8 billion in 2019 to $9.6 billion in 2024.
Private sector financing was also growing, although UNEP observed that such investments largely addressed private sector adaptation needs or were likely to be financed by developing countries themselves.
Consequently, private flows were expected to reduce the funding gap for more public-oriented adaptation measures by only 15 to 20 per cent.
Institutional barriers and rising losses
Beyond financing, the report emphasised the importance of institutional capacity in translating adaptation priorities into practical interventions.
It said governments were taking steps to strengthen their adaptation frameworks through climate change legislation, policy-learning platforms, improved coordination across government sectors and levels, and dedicated mechanisms for mobilising and managing climate finance.
The report also warned that climate-related losses and damages were increasing because of inadequate mitigation and adaptation efforts.
It noted that such losses and damages could occur even where adaptation measures had been implemented, while available financing remained far below identified needs.
As an example, the first funding round of the Fund for responding to Loss and Damage attracted requests amounting to $2.8 billion, significantly exceeding its initial funding envelope of $342 million.
UNEP said the requests demonstrated substantial unmet demand, although the full global financing gap for addressing losses and damages remained unknown.
The report called for stronger assessment capacity, adequate and predictable financial and technical support, simplified access procedures and meaningful participation by affected communities in determining responses to climate-related losses and damages.