Adaptation Gap Report 2025

• 31 Oct 2025

Source: DTE

Why in News? 

The United Nations Environment Programme (UNEP) Adaptation Gap Report (AGR) 2025 notes that climate adaptation efforts remain severely underfunded even as climate impacts intensify, highlighting the need for urgent global cooperation to achieve resilience and sustainable development goals.

What are the Key Highlights of the Adaptation Gap Report (AGR) 2025?

• Rising Adaptation Finance Needs: Developing countries will require USD 310–365 billion annually by 2035 for climate adaptation.  Adjusted for inflation to 2035, needs could reach USD 440–520 billion annually.
  • This estimate reflects rising rapid-onset and slow-onset climate impacts risks and escalating costs of implementing adaptation measures.
• Widening Adaptation Finance Gap: Current international public adaptation finance stands at only USD26 billion (2023). The resulting finance gap is USD 284–339 billion per year, making current funding highly inadequate.
• Missed Global Targets: The Glasgow Climate Pact goal of doubling 2019 adaptation finance to USD40 billion by 2025 will likely be missed.
  • The New Collective Quantified Goal (NCQG) of USD 300 billion by 2035 is insufficient and not inflation-adjusted.
• Funding through Climate Mechanisms: Support via the Adaptation Fund, Global Environment Facility, and Green Climate Fund rose to USD 920 million in 2024, an 86% increase over the 2019–23 average.
  • UNEP notes that  this may be a temporary spike amid growing fiscal constraints.
• Unequal Burden and Slow Progress in Adaptation: Developing nations face an unequal burden of adaptation finance, with about 58% of funds coming as debt instruments, mostly non-concessional loans, deepening long-term debt and climate injustice. 
  • At the same time, while 172 of 197 countries have national adaptation plans, 36 of them are outdated, weakening their ability to respond to evolving climate risks.
  • Small Island Developing States (SIDS) show the strongest integration of adaptation into national policies.

Recommendations

• Baku to Belém Roadmap: Fast-track Baku to Belém Roadmap adopted at 9th Conference of the Parties (COP 29) to the UN Framework Convention on Climate Change (UNFCCC).
  • It calls for scaling up climate finance for developing nations to USD 1.3 trillion annually by 2035.
• Enhance Private Sector Participation: Current private adaptation finance is  around USD 5 billion annually.  With supportive policy and blended finance, it could rise to USD 50 billion per year, still only a fraction of total needs.
  • Encourage blended finance and public-private partnerships to de-risk investments.
• Prioritise Grants and Concessional Finance: Avoid new debt traps by focusing on non-debt-creating instruments. Emphasize grants, concessional support, and the phase-out of fossil fuel subsidies to redirect resources toward adaptation.
  • Integrate resilience into finance systems by encouraging banks, investors, and insurers to embed climate-risk assessment in decision-making.
• Strengthen Mitigation: The report notes that reducing emissions can contain adaptation costs by limiting the intensity of future impacts.

Key Terms Related to Adaptation

• Adaptation: It means adjusting to current or expected changes in the climate and their effects. For people and communities, it involves reducing damage or making use of new opportunities that arise. 
  • In natural systems, it can include human actions that help ecosystems cope with changing climate conditions (building resilience).
• Adaptation Costs: The expenses involved in planning, preparing, facilitating, and implementing adaptation measures, including transaction costs.
• Adaptation Gap: The difference between the adaptation actions actually implemented and the desired societal goals, shaped by available resources, priorities, and tolerance for climate impacts. 

How is India Balancing Climate Commitments with Development Needs?

• Adaptation-Centric Focus: India’s climate strategy is shifting from mitigation-focused to adaptation-driven action by prioritising climate resilience (strengthening agriculture, water systems, and disaster preparedness) over emission cuts.
  • This shift stems from concerns over global inequity in climate finance and the understanding that adaptation provides immediate, local benefits, unlike mitigation, which relies on global cooperation.
  • Adaptation aligns with India’s National Adaptation Fund for Climate Change (NAFCC).
• Development Before Decarbonisation: As per the Economic Survey 2024–25, achieving “developed nation” status by 2047 is seen as essential before aggressive deep decarbonisation efforts.
  • It echoes the principle of “Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC)” under the UNFCCC.
• Pragmatic Global Posture: India’s likely delay in submitting its 2035 Nationally Determined Contributions (NDCs) underscores discontent with weak global progress.
  • The withdrawal of the US from the Paris Agreement (2025) and Loss and Damage Fund further eroded trust in multilateral climate commitments.
  • India continues to advocate climate justice, pushing for a balance between growth, equity, and responsibility.
• Long-Term Vision: India views adaptation is seen as the immediate priority, but mitigation remains the long-term goal.
  • India remains committed to achieving Net Zero by 2070, aligning with its NDCs and Long-Term Low Emissions Development Strategy (LT-LEDS).

Conclusion

The UNEP Adaptation Gap Report 2025 warns that adaptation finance is far below global needs. Without urgent concessional funding, stronger mitigation, and reformed climate finance, developing nations risk severe climate impacts. Investing in adaptation now is vital for future survival.

Drishti Mains Question:

Q. Critically examine the scale and causes of the global adaptation finance gap. What institutional and policy reforms are needed to bridge it?

Frequently Asked Questions (FAQs)

1. What is the estimated annual adaptation finance needed for developing countries by 2035?
United Nations Environment Programme (UNEP) Adaptation Gap Report (AGR) 2025  estimates USD310–365 billion per year (2023 prices).

2. What is the Baku to Belém Roadmap?
Adopted at COP29, the Baku to Belém Roadmap seeks to scale up climate finance for developing nations to USD 1.3 trillion annually by 2035.

3. What is India’s current climate posture in response to global finance shortfalls?
India is prioritising adaptation and resilience, seeking development-led low-carbon growth and strategic autonomy, while keeping mitigation (Net Zero by 2070) as a long-term goal.

UPSC Civil Services Examination, Previous Year Question (PYQ) 

Prelims

Q. With reference to ‘Global Climate Change Alliance’, which of the following statements is/are correct? (2017) 

1. It is an initiative of the European Union. 
2. It provides technical and financial support to targeted developing countries to integrate climate change into their development policies and budgets. 
3. It is coordinated by World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD). 

Select the correct answer using the code given below: 

(a) 1 and 2 only 

(b) 3 only 

(c) 2 and 3 only 

(d) 1, 2 and 3 

Ans: (a) 

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Mains

Q.1 Describe the major outcomes of the 26th session of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC). What are the commitments made by India in this conference? (2021) 

Q.2 ‘Climate Change’ is a global problem. How will India be affected by climate change? How Himalayan and coastal states of India will be affected by climate change? (2017)