Adaptation Finance Gap Update 2023

Between 2017 and 2021, international public adaptation finance for developing countries stayed at or below US$25 billion annually, with a 15 per cent drop to US$21 billion in 2021. The report highlights a lower disbursement ratio for adaptation (66 per cent) compared to general development finance (98 per cent), citing barriers such as low grant-to-loan ratios and limited technical capacity. While grants are more prevalent for Least Developed Countries (52 per cent) and Small Island Developing States (67 per cent), less than 17 per cent of commitments targeted local communities. The document emphasizes that while domestic and private finance are vital, they cannot bridge the gap alone, particularly in low-income countries.

• International public adaptation finance for developing countries remained at or below US$25 billion per year from 2017 to 2021, which equates to roughly US$3 per person annually. In 2021, funding decreased by 15 per cent compared to 2020, falling to US$21 billion.
• The disbursement ratio for adaptation finance was 66 per cent between 2017 and 2021, significantly lower than the 98 per cent ratio for overall development finance. This gap is attributed to barriers including limited technical capacity of decision makers, low grant-to-loan ratios, misalignment with local government mandates, and a failure to account for local issues during project design.
• Financial institutions prioritize grant-based funding for the most vulnerable nations; grants accounted for 52 per cent of adaptation finance for least developed countries (LDCs) and 67 per cent for Small island developing States (SIDS), compared to 26 per cent for non-LDCs.
• Despite the recognized importance of local agency, less than 17 per cent of finance commitments from 2017 to 2021 focused specifically on local communities.
• Domestic expenditure and private finance are critical but insufficient on their own to close the adaptation finance gap, particularly in low-income countries, LDCs, and SIDS, where using domestic budgets also raises equity concerns.

APA

Stockholm Environment Institute (2023). Adaptation Finance Gap Update 2023. https://www.sei.org/publications/adaptation-finance-gap-update-2023/

Chicago

Stockholm Environment Institute. Adaptation Finance Gap Update 2023. 2023. https://www.sei.org/publications/adaptation-finance-gap-update-2023/.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=Adaptation Finance Gap Update 2023 |date=13 November 2023 |url=https://www.sei.org/publications/adaptation-finance-gap-update-2023/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitute2023adaptation, author = {{Stockholm Environment Institute}}, title = {{Adaptation Finance Gap Update 2023}}, institution = {Stockholm Environment Institute}, year = {2023}, month = nov, url = {https://www.sei.org/publications/adaptation-finance-gap-update-2023/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }