Climate risks and impacts are shaped by the characteristics of territories affected by them. Heatwaves for example are more pronounced in built-up city centers as opposed to nearby sparsely populated areas. Climate adaptation is thus viewed as a locally led responsibility. Many local government responsibilities, such as land use and permitting decisions have a major bearing on adapting to climate change effectively. Yet, local actions are determined by national fiscal, regulatory and policy contexts. Equally, communities highly vulnerable to climate impacts are often also those whose technical capacity or fiscal space to adapt is the weakest. Co-operation is needed across different levels of government to foster climate change adaptation at the local level.
Enabling climate adaptation
Accelerating climate adaptation requires an appropriate policy, institutional, regulatory, and fiscal environment. Institutional arrangements must be fit-for-purpose to facilitate the implementation of adaptation policies and encourage adaptative behaviour by government agencies, businesses as well as individual households. The OECD examines, compares and identifies concrete institutional, regulatory and fiscal arrangements that increase the effectiveness of adaptation policies.
Key messages
With growing impacts of climate change being experienced across the world, countries are increasingly making climate change adaptation a policy priority. Assessing progress in the implementation of national adaptation policies is a critical step in understanding how adaptation efforts contribute to strengthening climate resilience, and whether they do so effectively. The OECD is developing indicators, comparable across countries, to shed light on the progress countries are making in implementing their adaptation policies.
Increased investment in adaptation will be a critical element in building resilience to the impacts of climate change. There is a crucial need to both align finance flows with climate-resilient development, as well as mobilising additional resources for necessary adaptation measures. Governments can achieve this by setting a clear strategic direction, strengthening the enabling environment and, in some cases, by targeting financial incentives. Risk-transfer instruments, such as climate risk insurance, play an important role in protecting private assets and activities from climate impacts.
International climate finance for adaptation has long lagged behind finance for mitigation. Over 2016-2021, only 25%, or USD 19 billion annually on average, of climate finance provided and mobilised by developed countries for actions in developing countries targeted adaptation. The 2021 Glasgow Climate Pact urges countries to increase the collective support for adaptation finance. The OECD produces regular analyses of progress made, based on a robust accounting framework that is consistent with the COP24 outcome agreed by all Parties to the Paris Agreement on funding sources and financial instruments.
Context
Population exposure to heat stress varies at the subnational level
The exposure to climate events depends on the characteristics of the surrounding area and the elements – people, assets, biodiversity – that might be located there. The same hazard (e.g. a heatwave) will have a different impact on a rural agricultural region than on a neighbouring urbanised, densely-populated and industrialised region. For example, the level of observed population exposure to heat stress in North and Latin America can vary significantly across localities. Climate change is projected to reinforce these regional disparities, in many cases increasing the intensity and frequency of risks in already exposed areas.
Measuring progress throughout the climate adaptation policy cycle
Climate adaptation measurement is a process that is informed by each step of the adaptation policy cycle. In a first step, this includes the measurement of a baseline to assess current and projected climate risks. Secondly, it includes the definition of adaptation objectives against which progress can be assessed. Ultimately, adaptation measurement seeks not only to monitor implementation progress but also to evaluate whether implemented adaptation actions are effective and efficient in reducing climate risks and resulting impacts.
Climate finance provided and mobilised for adaptation has increased since the Paris Agreement
The OECD regularly reports on progress towards the USD 100 billion goal. Developed countries provided and mobilised USD 463.3 billion of climate finance, or an average of USD 77.2 billion a year, between 2016 and 2021. Of this total, adaptation finance (excluding cross-cutting finance) averaged USD 19 billion per year, or just 25%. Moreover, another USD 7.5 billion a year on average was destined to crosscutting activities. While tracked finance for adaptation has increased consistently between 2016-20, it slightly dropped in 2021. In contrast, cross-cutting finance (which also targets adaptation objectives) increased in 2021 compared to 2020. Overall, most climate-related finance is still directed to mitigation.
Related policy issues
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Despite considerable progress, we need bolder action and deeper global co-operation to achieve net-zero emissions and limit climate change, which interconnects with biodiversity loss and pollution to form a triple planetary crisis. Addressing policy gaps and taking a systems-wide approach can also help countries to seize the economic opportunities offered by the net-zero transition. The OECD works to support governments and international bodies, including by providing rigorous data, analysis and policy recommendations, to raise ambition and improve outcomes on climate mitigation, adaptation, resilience and financing.Learn more
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Progress towards net-zero emissions must go hand in hand with efforts to build the resilience of people, economies and ecosystems to the mounting impacts of climate change.Learn more