Use of climate-resilient financial strategies and instruments is limited by weak incentives, which commonly take the form of high upfront costs , high transaction and intermediation costs  and relatively long pay-off time. Tenant producers may not experience benefits from adaptation investments . Investors seek low-risk, liquid investments and credit-worthy counterparties , yet small- and medium-sized producers and supply chain actors often lack access to formal credit. Given limited experience and weak information for adaptation finance, sub-optimal outcomes may include imbalanced allocation of public and private finance  as well as inequitable division of risks and returns  . Additionally, while risk-sharing finance strategies can deliver adaptation benefits, they do not inherently reduce overall risk and commonly cover only specified types of risks .
IPCC
Climate Change 2022: Impacts, Adaptation and Vulnerability
IPCC Report