Why is There a Massive Financing Gap to Prevent Climate Change?

The impacts of climate change are already here and have tangible consequences on the world that are only getting worse. The earth is warming, sea levels are rising, and rainfall patterns are changing. These changes intensify the risk of devastating floods, long droughts and scorching heatwaves and fires. The severity of the climate change impacts, and societal vulnerabilities depend wholly on how quickly humanity will decrease greenhouse gas emissions.

Biggest Takeaways from the United Nations 2023 Adaptation Gap Report 

Despite the accelerating climate change impacts and risks globally, international funding to enable society and communities to adapt to climate change impacts needs to be revised. The United Nations Environment Programme (UNEP) report highlights the considerable gaps in the required funding, planning and implementation of climate change mitigation measures, across different parties.

The Global Climate Change Impacts and Risks Continue to Rise

The current plans tackling the rise in rising temperatures submitted by the various countries and parties place the world on an unsatisfactory trajectory towards 2.4°C–2.6°C by the end of the 21st century, which is significantly above the 1.5 °C ambition of the Paris Agreement.

There Has Been Progress in Adaptation Implementation Overall

About half of the 196 parties that signed the Paris Agreement have established at least two national adaptation plans, strategies, or policies. There have been general improvements in the effectiveness of adaptation planning since 2021. 

Nonetheless, 15% of the parties currently need a national tool for adaptation planning, and the growth rate in this area declined from 4 per cent to just 1 per cent in 2022. Although half of the 29 countries that do not have any adaptation instrument are in the process of creating one, most of these nations are at an increased risk of the worrying effects of climate change. Consequently, there is a need for increased efforts to assist them in quickly bridging this existing gap. 

The number of actions taken towards climate change mitigation was also lower in 2022 compared to the previous year. The analysis indicates that there must be adequate external financial support to help developing countries implement actions for reversing the loss and damage associated with climate change. 

Financial Climate Change Plans Need to Be Revaluated

The report finds that the gap in adaptation finance is widening, between $194 billion and $366 billion annually. There is some fragmented evidence that there is some increment in the private-financed adaptation measures globally across sectors such as transport, tourism, infrastructure, water, food and agriculture. However, the UNEP report indicates that international financing mechanisms must increase to fill the finance gap, especially in low-income countries. 

The report suggests seven fundamental ways to remedy this, broken into core and additional approaches. The core approaches include international public and private action to finance change as well as domestic expenditure on climate change prevention and mitigation. The additional approaches include increased financing targeted at small and medium-sized businesses, reform of the global financial architecture, and full implementation of the Paris Agreement.

The United Nations Environment Program report is an important touch point on our journey to slowing global warming and altering the concerning trends we are heading towards. Clarity, transparency and effective evaluation of where we must be made and then actioned if we are to alter our trajectory. Driving change as a society starts with individuals and independent organisations. This is especially true where environmental professionals are concerned and we'd strongly recommend you look at our IEMA Environmental Sustainability Skills for Managers course. It covers key environmental sustainability issues, legislation, improving environmental sustainability performance and much more. Sign up today if you want to drive environmental change in your own workplace.

About the Author 

Enock Ebbah MSc has a wealth of combined experience, having spent 13 years developing and delivering energy, environment and sustainability projects, energy research and responsible engineering. His specialist expertise in strategic NetZero solutions, energy transition, decarbonisation initiatives, and sustainable approaches to using energy, materials, and resources for sustainable development. As an Environment and Sustainability Consultant at Astutis, Enock helps organisations deliver ambitious environment, sustainability, and NetZero outcomes by providing environmental assessments, environmental and sustainability training, ESG materiality assessments, as well as sustainability reporting and strategy.