Adaptation, resilience and loss and damage

Adaptation and resilience represents investment priorities that cut across the economy, protecting people, livelihoods, infrastructure and ecosystems from escalating climate risks. Loss and damage finance helps countries and communities respond when harm cannot be avoided. While adaptation planning and financing mechanisms are advancing, investment remains far below needs; financing reaching the local level remains limited, and implementation has not kept pace with intensifying impacts.

Status

Adaptation planning and delivery are advancing, but investment remains far below needs and is not consistently accelerating. Funding remains dominated by public sources. Opportunities exist to accelerate private investment in commercially viable activities. Country-led and local mechanisms are expanding, but local control of resources and evidence of reduced vulnerability remain weak. For loss and damage, the FRLD and Santiago Network are becoming operational, yet dedicated finance is negligible and the reach and outcomes of new funding arrangements are not yet established.

Scale

Magnitude relative to the need

Stalled

Finance for both adaptation and loss and damage remains small relative to estimated needs, and both receive Low ratings. CPI tracks USD 40.5 billion in adaptation investment in EMDEs excluding China in 2024 (Abraham et al., 2026), which is far below existing estimates of need. Incomplete tracking of domestic and private investment, and challenges with needs estimations prevent a precise financing-gap calculation. Dedicated loss and damage finance is even more limited: the FRLD had approximately USD 822 million pledged by March 2026 (FRLD, 2026a), with funding requests exceeding available resources. Broader financing arrangements for loss and damage exist, but are not comprehensively tracked.

Speed

Pace of reform against what's needed

Slow

Planning is progressing, but investment is not accelerating enough to meet the call at COP30 to at least triple adaptation finance by 2035. CPI-tracked adaptation investment in EMDEs excluding China rose from USD 26.8 billion in 2019 to USD 44.6 billion in 2023, then fell to USD 40.5 billion in 2024 (Abraham et al., 2026). MDB commitments rose 31% to USD 34.6 billion in 2025, although they measure a different financing stage and geography (AfDB et al., 2026). Loss and damage is rated Moderate, reflecting faster progress establishing the FRLD and Santiago Network, though the FRLD deferred its first funding package to December 2026 (FRLD, 2026b).

Reach

How far it extends across countries and institutions

Slow

Adaptation and resilience is rated Moderate-Low, while loss and damage is rated Low/Insufficient evidence. Local delivery is expanding: Kenya's FLLoCA operates in all 47 counties, and over 30% of reported adaptation finance includes funding targeting the local level. Yet only 0.17% of total reported climate finance explicitly refers to locally led action (Treichel et al., 2025); though targeting does not guarantee local decision-making. CPI-tracked adaptation finance to LDCs fell 35% in 2024 (Abraham et al., 2026). Response mechanisms reach some communities: WFP anticipatory action protected 6.3 million people in 2025 (WFP, 2026). FRLD reach cannot yet be assessed.

Impact

Depth of real world effect

Slow

Adaptation and resilience is assessed Moderate-Low because some programs demonstrate implementation and resilience benefits; evidence for loss-and-damage impact is still insufficient. In 2025, 119 countries reported multi-hazard early-warning systems, more than twice as many as a decade earlier (UNDRR, 2025). That demonstrates broader coverage, but not necessarily reduced losses. Regional risk pools and anticipatory-action programs have made timely payouts and reached exposed populations, but cover only part of the response. Initial FRLD projects are too recent to assess, and comparable evidence of avoided losses, reduced vulnerability and recovery outcomes remains limited.

Action fronts

Climate finance reform advances on five fronts, from replenishing the funds that already exist to reshaping how the whole system works. These are the fronts where Adaptation, resilience and loss and damage is making headway.

Replenishing
Reshaping
Revamping
Overhauling the institutions, rules, and instruments that climate finance runs on

The Path Forward

Adaptation finance must scale rapidly and reach the countries and communities most exposed to climate risk, with priority for grants and concessional resources where commercial returns are limited. Loss and damage finance needs sustained, predictable resources to respond when harm cannot be avoided.

Translating adaptation plans into costed investment pipelines linked to national budgets, public investment systems and financing strategies is a key priority, supported by better valuation of avoided losses and the economic and fiscal benefits of resilience. Governments need to strengthen the policy and regulatory conditions for investment, while development finance institutions should use concessional capital, risk-sharing instruments and project preparation to mobilize private finance where viable revenue models exist and sustain essential public-good investments where they do not. Stronger subnational institutions and direct-access mechanisms should enable local governments and communities to access finance and shape investment decisions. For loss and damage, the FRLD requires sustained resources alongside expanded anticipatory finance, risk pooling and post-disaster mechanisms, without displacing investment that reduces future losses. Expanded tracking of adaptation finance and further testing of the Belém Adaptation Indicators should help assess whether investments deliver resilience outcomes.