UNEP’s 2025 Adaptation Gap Report flags $365bn annual needs as finance shrink

The United Nations Environment Programme’s Adaptation Gap Report 2025, released as Jamaica reels from the devastation of Hurricane Melissa, warns that developing nations face soaring climate adaptation costs even as public funding declines. The assessment frames adaptation as a “lifeline”, urging faster, grant-based finance and stronger mitigation to curb escalating risks.

Widening adaptation finance gap

International public finance for adaptation fell to US$26 billion in 2023, down from US$28 billion in 2022. This slide deepens the funding gap to roughly US$284–339 billion a year. Current flows cover only a small fraction of needs, even as extreme rainfall, flash floods, landslides, heatwaves, and intensifying tropical cyclones become more frequent and severe for vulnerable countries.

Projected costs through 2035

Developing countries will require US$310–365 billion annually by 2035 to adapt. The lower figure stems from modelled costs; the upper figure reflects extrapolations from Nationally Determined Contributions and National Adaptation Plans. Estimates are in 2023 prices and exclude inflation. Extending recent inflation trends would lift needs to roughly US$440–520 billion per year, underscoring the urgency of locking in finance terms that do not worsen debt burdens.

Targets, pledges and shortfalls

On current trajectories, the Glasgow Climate Pact goal to double adaptation finance from 2019 levels to about US$40 billion by 2025 will be missed. COP29 agreed a New Collective Quantified Goal of US$300 billion per year for climate finance by 2035, covering both mitigation and adaptation. That envelope, split across priorities and eroded by inflation, will still fall short of adaptation requirements. The Baku to Belém Roadmap signals a path to scale, but emphasises concessional, non-debt-creating instruments to avoid exacerbating vulnerabilities.

Exam Oriented Facts

• Adaptation finance to developing countries fell to US$26 billion in 2023.
• Estimated adaptation needs reach US$310–365 billion annually by 2035 (2023 prices).
• Inflation-adjusted needs could rise to US$440–520 billion per year by 2035.
• Glasgow goal to double 2019 adaptation finance by 2025 is off track.

Policy responses and private finance

Adaptation planning is expanding, with most countries now holding at least one national policy or plan, though many require updates. Commitments via the Adaptation Fund, GEF and Green Climate Fund rose sharply in 2024, yet may represent a one-off spike amid tighter budgets. The report urges stronger mitigation to contain future adaptation bills, vigilance against maladaptation, and wider use of grants and concessional tools. Private capital can help—potentially up to ~US$50 billion annually with targeted de-risking and blended finance—but cannot replace robust public funding.