This Framework was developed to identify the domestic policies that can accelerate the pace and increase the scale of investments in climate change adaptation. Signs of the need to shift from business-as-usual are already evident: growing difficulties securing insurance coverage in some regions, “extreme” weather events becoming increasingly frequent and increasing costs from weather related events. Proactive, targeted investments in the near-term will reduce future losses and avoid the need for costly and disruptive retrofitting. It is likely that investments in adaptation will need to increase from the tens of billions of dollars per year to the hundreds of billions of dollars per year.
The need for a step change increase in adaptation investment is also being recognised at the international level, including through the on-going discussions about the New Quantified Collective Goal (NCQG) under the UNFCCC process. The G20’s agenda on reform of the Multilateral Development Banks has emphasised the need to increase financing capacity and enhance the mobilisation of private capital (G20 Brazil, 2024[1]). These international efforts, including the provision of concessional finance, will be critical to support adaptation investment in developing countries.
The rapid growth of investment in clean energy provides a positive example of how a strong and supportive policy framework, innovation and private capital can have transformative impact in unlocking investment. There has been a virtuous cycle: supportive policy environments drove investment, investment drove unit costs down through innovation and learning-by-doing, and lower costs have made it easier to invest. A similar effort is now needed to strengthen the enabling environment for adaptation to help drive the transformation needed to enhance resilience.
The elements needed to underpin these efforts are emerging, ranging from initiatives to support adaptation planning to the development of taxonomies for climate adaptation. There is increasing engagement from key actors including governments, private sector, philanthropies, and international organisations. Yet, overall, there are significant data gaps and uneven implementation of measures to strengthen the enabling environment. This Framework has been developed to be iterative and pragmatic, drawing upon international good practices where these are available and highlighting issues that governments should be considering as they seek to strengthen the enabling environment.
Translating this Framework into a stronger enabling environment at the national level will often require additional guidance and support. For each of the “building blocks”, links to additional resources and support are provided. Beyond this, the sequencing and prioritisation of reforms will depend upon country context, based on a comprehensive view of capacities and needs. Country reviews, such as the OECD’s Investment Policy Reviews, can provide a valuable mechanism for developing policy recommendations based on the Framework outlined here.
In addition to supporting implementation directly through country engagement, the OECD intends to support the development of this Framework through further analytical and policy work to strengthen the evidence base, reflect recent developments and provide more detailed guidance on specific topics included in the framework. Some of the potential areas include:
Sequencing and prioritisation of efforts to strengthen the policy enabling environment, reflecting differences in country circumstances and the specific needs of developing countries. This could cover, for example, the interaction of policy reform with capacity and financing constraints and further work to identify the pre-requisites for different financing instruments and strategies. It could also explore the specific needs of different types of private sector actors, including Small and Medium-Sized Enterprises (SMEs).
Successful approaches to integrating adaptation investment into national planning processes, learning from efforts to implement adaptation investment plans.
Scalable models for financing investments in climate resilience, including public and private finance sources. This could examine issues such as the development of common metrics for the benefits of adaptation investments, innovative financing models and policy needs for different types of private sector firms.
