In a market economy, human activities tend to exacerbate degradation of natural capital, despite its role in buffering climate change impacts, supporting mitigation and providing adaptation options. Economic agents base their decisions on market prices, even though market prices do not incorporate the costs of deteriorating natural capital because of externalities and other market failures, that is environmental degradation is not internalised . At the same time, expanding populations, capitalism and consumption choices affect the condition of natural capital, alongside short-termism stemming from poverty, linked to the need for survival. All these factors therefore interact, with the aggregate effect of worsening the impacts of climate change, while also undermining future adaptation options, particularly for the poor. Adaptation policies should, but do not always, compensate for the prevalent market failures. For example, in Melanesia, sea walls have been built out of coral by local people in an attempt to reduce the impacts of rising sea levels, leading to outright destruction of some of the world's most productive and biodiverse coral reefs . Similarly, in the Congo Basin, farmers are adapting to increasingly variable rainfall by expanding their cropping activities into forested areas, releasing carbon into the atmosphere through forest clearance activities and threatening biodiversity. Agricultural land is also being degraded globally , and this too closes down adaptation and livelihood options for the poorest, natural resource-dependent populations, while jeopardising food security, biodiversity and human health at wider scales. An enabling environment for adaptation therefore demands investment in sustaining natural capital at multiple scales, internalising the costs of degradation, as well as establishing the necessary legal and regulatory frameworks  to reduce its degradation .
IPCC
Climate Change 2022: Impacts, Adaptation and Vulnerability
IPCC Report