Tripling Adaptation Finance: Why It’s Only Half the Story

The UNEP Adaptation Gap Report had set the tone before COP30, warning that adaptation finance flows remain critically low. In 2023, developed countries provided just $26 billion in public finance, far short of the Glasgow Climate Pact’s goal of doubling adaptation finance to $40 billion by 2025. More starkly, developing countries will need $310–$365 billion annually by 2025 to meet their adaptation needs. Against this backdrop, tripling finance by 2035 feels like progress, but too slow.

For LDCs, the issue is not only how much money is pledged, but equally where it goes and who decides, assuming, of course that the pledges are honoured. Too often, climate finance is trapped at the national or international level, with little reaching the local actors who are best placed to respond. New research using OECD’s climate finance database from 2016 to 2023 shows that local impact or involvement were mentioned in transactions representing less than a third (29%) of total funding – and that just 0.17% mentioned the terms “locally led” or “community led” across eight years. That is why the LDCs, through the LIFE-AR initiative, have championed the 70:30 principle: by 2030, at least 70% of climate finance should be channelled to the local level, with no more than 30% reserved for national systems and coordination. Lessons on implementing the principle are starting to emerge across LDCs.

Operationalising this principle is not simple; it looks different in each country. Burkina Faso, with decades of decentralisation experience, channels funds to communes, autonomous municipalities that already manage local development. Uganda, by contrast, defines “local” at the parish level - an administrative structure that brings together on average 6-7 villages - activating Parish Climate Change Committees to strengthen grassroots planning. Ethiopia has prioritised infrastructure investments aligned with community priorities, while Malawi began with a 60:40 split, gradually strengthening local government capacity for climate finance governance before achieving 70:30 over time.

These examples show that “local” is context specific. But they also prove that LDCs are not waiting for perfect systems—they are testing, learning, and adapting.

If 70% of funds go to communities, the remaining 30% strengthens programme implementation through supporting coordination, monitoring, evaluation, gender inclusion, and learning. For many LDCs, this is where in-kind government contributions like staff time, offices, vehicles have contributed to LIFE-AR implementation, to compliment the 30% and strengthen ownership and institutionalisation. The principle is not about compromising programme quality, but about ensuring that climate finance is invested behind community investments to build their adaptive capacity and resilience in the long term, while ensuring efficiency and value for money.

The LIFE-AR Front Runner Countries (FRCs) are showing that the 70:30 principle is more than a percentage but rather a pathway to transforming climate finance. Their lessons highlight four dimensions:

• Quantity: Adequate total funding is essential to achieve the 70/30. Even the best allocation cannot work if the overall pot is too small and can risk compromising programme quality.
• Time: Countries start from different points. Flexibility in timelines is critical to avoid setting them up to fail.
• Trust: Building strong systems requires upfront investment. Funders must value the often-invisible governance and accountability efforts as much as quick tangible wins.
• Flexibility: Adaptive management allows countries to learn from what works and what doesn’t, reforming systems along the way.

The LDCs’ message at COP30 was clear: tripling adaptation finance is welcome, but it is only half the story. Without deliberate considerations to ensure finance reaches the local level, the promise risks becoming another headline without impact. The LIFE-AR Front Runner Countries (FRCs), the first joiners and implementers of the initiative, are not just testing a financial allocation principle, they are also demonstrating whether international climate finance architecture can truly transform from ‘business as usual’ to ‘business unusual’. Evidence so far suggests it can, but only if there is an acknowledgement of the messy, context-specific, non-linear path required to get there. A business unusual pathway in this context means placing communities at the centre, building trust in local systems and requires that adaptation finance be both adequate in quantity and predictable in quality. As climate hazards intensify, the world cannot afford to sit on the fence. Delays only make the future adaptation costs go higher.