Global efforts to adapt to climate change are falling dangerously behind as the world approaches a breach of the 1.5°C warming threshold, with international climate finance remaining far below the needs of developing countries, according to a new United Nations report.
The United Nations Environment Programme (UNEP), in its 2026 Adaptation Gap Report: Ready? Not, warns that inadequate funding, institutional barriers and mounting climate-related losses and damages are undermining efforts to strengthen resilience against intensifying climate impacts.
Developing countries will need an estimated $305 billion annually by 2035 to finance climate adaptation. However, international public adaptation finance from developed to developing countries reached only $28.2 billion to $31.7 billion in 2024, increasing by just $1 billion from the previous year.
Even if the international community fulfils the commitment made at the COP30 climate summit to triple adaptation finance by 2035, the funding would cover only 20–29% of developing countries’ estimated requirements, the report said.
UNEP Executive Director Inger Andersen said the world was not prepared to adapt to current climate conditions, let alone the consequences of exceeding the 1.5°C warming threshold.
“At climate COP31 in Türkiye and beyond, nations must focus on intensifying efforts to achieve the COP30 Global Mutirão aspiration of tripling adaptation finance by 2035,” she said, adding that significantly greater funding would be needed to save lives, prevent losses and damages and protect economies.
Funding gap widens
The report estimates that international public adaptation finance could rise to between $85 billion and $120 billion annually by 2035 if the tripling commitment is achieved.
However, after accounting for inflation, this would still leave a substantial funding gap.
The assessment, based on countries’ nationally determined contributions (NDCs), national adaptation plans (NAPs) and model-based estimates, puts annual adaptation requirements at around $305 billion by 2035. This estimate largely excludes the private sector’s own adaptation needs, which could almost double the overall figure.
The report also highlights concerns over financing for least developed countries (LDCs) and small island developing states (SIDS). Although funding to these countries increased in real terms between 2019 and 2024, it has fallen from its 2022 peak.
Tripling adaptation finance for LDCs and SIDS could cover 49–83% of their estimated needs, offering a potentially significant boost to countries particularly vulnerable to climate change.
Some progress in climate finance
Despite the overall shortfall, the report identifies several encouraging developments.
Multilateral development banks are expected to have significantly increased adaptation financing in 2025, potentially helping meet the Glasgow Climate Pact target of doubling adaptation finance from 2019 levels to $40 billion by 2025.
However, achieving that target will also depend on bilateral development assistance, which faces uncertainty amid declining official development assistance.
Financial cooperation among developing countries is also expanding. Funding channelled through multilateral development banks and direct South-South cooperation increased from $3.8 billion in 2019 to $9.6 billion in 2024.
Private-sector adaptation finance is growing as well, although much of it supports businesses’ own resilience measures or is ultimately financed by developing countries themselves. The report estimates that such investment may reduce the funding gap for publicly oriented adaptation measures by only 15–20%.
Institutional barriers and mounting losses
UNEP stresses that increasing finance alone will not be enough to accelerate adaptation. Governments also need stronger institutions and effective policies to translate national climate priorities into practical action.
Some countries are making progress by introducing climate change framework laws, improving coordination across government agencies, establishing platforms for policy learning and creating dedicated mechanisms to mobilise and manage climate finance.
Meanwhile, climate-related losses and damages continue to mount, particularly in developing countries, as mitigation and adaptation efforts remain inadequate.
Funding to address these losses is significantly below identified needs, while complicated application procedures and limited institutional capacity prevent vulnerable communities from accessing available support.
The first funding round of the Fund for responding to Loss and Damage received requests totalling $2.8 billion, far exceeding its initial funding allocation of $342 million.
UNEP said the gap demonstrated substantial unmet demand, although the full global financing requirement for addressing climate-related losses and damages remains unknown.
The report calls for stronger assessment capacity, predictable financial and technical assistance, simpler funding procedures and meaningful participation by affected communities in designing responses.