Financing Adaptation to Climate Change

This 2008 policy brief by the Stockholm Environment Institute examines the financial requirements and mechanisms for climate change adaptation in developing countries. It highlights a significant funding gap and discusses the tension between 'mainstreaming' adaptation into development assistance and providing 'stand-alone' new and additional funding. The document evaluates existing funds, the role of the private sector, and the necessity of a financial agreement to secure a post-2012 climate framework.

• A financial agreement on adaptation is considered a critical prerequisite for reaching a post-2012 framework agreement at the COP 15 meeting in Copenhagen in December 2009.
• There is a substantial funding shortfall for adaptation in developing countries, with various aggregate estimates provided: the UNFCCC Secretariat estimates USD 28–67 billion per year by 2030, the World Bank estimates USD 9–41 billion per year, Oxfam International estimates more than USD 50 billion per year, and the UNDP estimates USD 86-109 billion per year by 2015.
• Adaptation success in developing countries is linked to broader development progress; policies that alleviate poverty and support sustainable livelihoods can increase the adaptive capacity of vulnerable groups and reduce risks.
• There is a policy conflict regarding 'mainstreaming'—integrating climate risks into development planning—versus 'stand-alone' adaptation. While mainstreaming is seen as more effective and sustainable, developing countries fear it is a strategy for developed nations to avoid providing new and additional funding by absorbing it into existing Official Development Assistance (ODA) budgets.
• The Adaptation Fund is viewed as institutionally superior to Global Environment Facility (GEF) managed funds because it allows applicant countries to select their own implementing entities and provides direct representation for developing countries on its Board.
• There is potential for private sector involvement in adaptation, specifically through the insurance sector. Proposed options include micro-insurance, regional reinsurance facilities, catastrophe funds linked to international financial markets, and weather derivatives.
• The document suggests a bifurcated funding approach: ODA should be used for building response capacity and addressing drivers of vulnerability, while new and additional funding should be reserved for managing climate risks and confronting climate change.

APA

Klein, R. (2008). Financing Adaptation to Climate Change. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/Climate/financing_adaptation_climate_change.pdf

Chicago

Klein, Richard. Financing Adaptation to Climate Change. Stockholm Environment Institute, 2008. https://www.sei.org/mediamanager/documents/Publications/Climate/financing_adaptation_climate_change.pdf.

Wikipedia

{{cite report |last1=Klein |first1=Richard |title=Financing Adaptation to Climate Change |publisher=Stockholm Environment Institute |date=2008 |url=https://www.sei.org/mediamanager/documents/Publications/Climate/financing_adaptation_climate_change.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{klein2008financing, author = {Klein, Richard}, title = {{Financing Adaptation to Climate Change}}, institution = {Stockholm Environment Institute}, year = {2008}, url = {https://www.sei.org/mediamanager/documents/Publications/Climate/financing_adaptation_climate_change.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }