Adapting to climate impacts is more critical than ever. Average global temperatures surpassed the 1.5°C threshold in 2024, and the ten worst climate-related disasters of 2025 caused over $120 billion in insured losses alone. Yet just as adaptation becomes more urgent, climate has slipped down the global agenda, leaving the developing countries most exposed to climate impacts—and least responsible for them—to adapt with shrinking international support.
This issue brief gives an overview of the history and current state of adaptation finance and examines how it overlaps with development finance and with loss and damage. It sets the goals agreed at COP29 and COP30 against estimated adaptation needs of $310 to $365 billion per year by 2035 and explains why, for many small island developing states and least developed countries, the form finance takes—grant-based and directly accessible—matters as much as the amount.
The brief argues that adaptation, sustainable development, and loss and damage should complement one another rather than compete for scarce, siloed funding. It makes the case for strict criteria on what counts as climate finance rather than the automatic separation of climate and development projects, and for multilateral climate finance to grow, grant-based funding to expand, and climate resilience to be mainstreamed across all development efforts. This will ensure the international system is ready to deliver when political will to tackle climate change returns.
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