The current public and private financial flows to adaptation are much smaller than needed . Only a small portion of overall adaptation finance needs is likely to be covered by public sector finance. Private sector investment thus needs to play a crucial role. Hence, tracking adaptation finance flows is important for enabling effective planning and prioritisation of investments, assessing whether needs are being met, and ensuring accountability towards funding commitments, such as the USD 100 billion promised to developing countries per year by 2020 under the Paris Agreement . Since AR5, significant progress has been made in tracking adaptation finance flows through UNFCCC channels, multi-lateral development banks and bilateral finance , but large information gaps on adaptation finance via national public finance, commercial lenders, investors, asset managers and insurers, company finance, and individuals and households remain. That these financial flows do not occur suggests misaligned incentives and other governance challenges that could be addressed as part of a response to climate change . Across regions and sectors, financial constraints have been identified as the most common and important determinants leading to limits to adaptation .
IPCC
Climate Change 2022: Impacts, Adaptation and Vulnerability
IPCC Report