Adaptation: Needs, Financing and Institutions

This 2008 briefing paper argues that adaptation is a critical component of climate policy that must be pursued alongside mitigation. It highlights a massive funding gap for adaptation in developing countries, suggesting that annual needs could reach over US$100 billion. The authors emphasize that adaptation is inextricably linked to development and poverty reduction, and they advocate for 'new and additional' funding—potentially sourced from carbon levies—and the transition from isolated projects to comprehensive, country-driven national adaptation plans.

• Adaptation is essential because some climate change impacts are already unavoidable, regardless of mitigation efforts. However, the world cannot rely on adaptation alone, as excessive climate change would eventually reach levels where adaptation is no longer feasible or would incur extreme social, economic, and environmental costs.
• There is a critical funding gap for adaptation in developing countries, with current funding levels needing to increase by two orders of magnitude, moving from hundreds of millions to tens of billions of US dollars per year. Various estimates for additional annual investment in developing countries range from US$9 billion (World Bank) to over US$109 billion (UNDP).
• Adaptation and development are deeply interdependent. Effective pro-poor development—including poverty reduction, good governance, education, and gender equality—increases adaptive capacity. Conversely, development activities can be 'maladaptive' if they increase exposure to climate risks or reduce the capacity to adapt.
• The process of 'mainstreaming' adaptation—integrating it into national and sectoral planning—is intended to increase efficiency and sustainability. However, developing countries express concern that this may lead to adaptation funding being absorbed into existing Official Development Assistance (ODA) budgets rather than being provided as 'new and additional' funding.
• The document proposes several mechanisms to generate new adaptation funding based on the polluter-pays principle, including levies on carbon market transactions and air travel, as well as the auctioning of emission permits.
• To improve the effectiveness of adaptation, the document recommends moving from stand-alone projects to programmatic, country-driven national adaptation plans. These plans should involve national finance and planning ministries and identify synergies between adaptation and development.

APA

Klein, R. J., Kartha, S., Persson, Å., Watkiss, P., Ackerman, F., Downing, T. E., Kjellén, B., & Schipper, L. (2008). Adaptation: Needs, Financing and Institutions. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/Climate/adaptation_needs_institutions.pdf

Chicago

Klein, Richard J.T., Sivan Kartha, Åsa Persson, Paul Watkiss, Frank Ackerman, Thomas E. Downing, Bo Kjellén, and Lisa Schipper. Adaptation: Needs, Financing and Institutions. Stockholm Environment Institute, 2008. https://www.sei.org/mediamanager/documents/Publications/Climate/adaptation_needs_institutions.pdf.

Wikipedia

{{cite report |last1=Klein |first1=Richard J.T. |last2=Kartha |first2=Sivan |last3=Persson |first3=Åsa |last4=Watkiss |first4=Paul |last5=Ackerman |first5=Frank |last6=Downing |first6=Thomas E. |last7=Kjellén |first7=Bo |last8=Schipper |first8=Lisa |title=Adaptation: Needs, Financing and Institutions |publisher=Stockholm Environment Institute |date=2008 |url=https://www.sei.org/mediamanager/documents/Publications/Climate/adaptation_needs_institutions.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{klein2008adaptation, author = {Klein, Richard J.T. and Kartha, Sivan and Persson, Åsa and Watkiss, Paul and Ackerman, Frank and Downing, Thomas E. and Kjellén, Bo and Schipper, Lisa}, title = {{Adaptation: Needs, Financing and Institutions}}, institution = {Stockholm Environment Institute}, year = {2008}, url = {https://www.sei.org/mediamanager/documents/Publications/Climate/adaptation_needs_institutions.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }