Global efforts to scale up climate adaptation and nature financing received a boost at the COP30 summit in November, but analysts warn that implementation delays and unresolved structural challenges will leave emerging markets exposed to rising climate risks for years to come.
In its latest ESG Country Weekly Digest, Fitch Solutions notes that governments agreed to a new global adaptation finance goal of USD120 billion annually by 2035, tripling the current target of USD40 billion by 2025. However, the momentum is expected to be slow, chiefly because countries failed to finalise a common measurement framework for adaptation until end-2027. The absence of such a system means long-standing barriers — including weak project bankability, limited technical capacity and governance constraints — will continue to impede progress.
Adaptation Funding to Rise, But Still Far Below What Emerging Markets Need
With governments unlikely to scale up contributions in the near term, multilateral development banks (MDBs) are set to drive most of the incremental financing. New guidance issued at COP30 aims to streamline MDB lending for adaptation and nature-based projects, mirroring similar reforms earlier in the decade that helped boost climate lending.
Yet, these efforts will “fall short of targets and actual needs,” the report warns. As a result, countries with high climate vulnerability and weak resilience will see their medium-term growth prospects increasingly jeopardised by worsening physical climate impacts.
Asia Remains a Prime Destination for Adaptation Finance
Asia is expected to remain a major hotspot for both public and private adaptation investment. Strong economic growth, improving governance, and an expanding pool of bankable projects have attracted capital into major emerging markets such as China, India, Indonesia and Vietnam.
Although these economies continue to trail developed markets — including Japan, Australia and the United States — their climate resilience indicators have been on a steady upward trajectory.
Improvements stem largely from enhanced early-warning systems, more comprehensive disaster preparedness strategies, and better fiscal capacity to support post-disaster recovery.
Progress on climate-resilient infrastructure has also been positive, though slower. In many countries, infrastructure pipelines have struggled to keep pace with economic and population growth. Coordination gaps — such as those in China’s “sponge cities” programme — and corruption issues, like those affecting flood-defence systems in the Philippines, continue to undermine resilience efforts.
This leaves lower-resilience communities particularly vulnerable as exposure to physical climate hazards rises sharply over the coming decades.
Nature Finance Advancing, but Launch Timelines Still Uncertain
Beyond adaptation, COP30 saw meaningful movement on nature finance. Brazil advanced preparations for its landmark Tropical Forest Forever Facility (TFFF) — an initiative designed to provide results-based payments to national governments based on forest protection, deforestation rates and reforestation progress.
The TFFF aims to allocate 20% of its disbursements to Indigenous peoples and local communities, reflecting growing recognition of their central role in conservation.
To date, the initiative has attracted USD6.7 billion in pledged funding — still far short of its USD25 billion target. Many of the commitments also include conditions that could delay the TFFF’s launch beyond 2028, though the mechanism is widely seen as a signal of strengthening global support for biodiversity and forest protection.
Broader Global Forums Echo Finance-Centered Themes
The digest also highlights how discussions at the G20 Summit in South Africa and the EU-AU Summit in Angola mirrored COP30’s central focus on climate finance, underscoring the increasing alignment of global economic and climate agendas.
Separately, Argentina’s proposal to loosen glacial protection laws to facilitate copper mining and ongoing upheaval at the U.S. Federal Emergency Management Agency (FEMA) point to how countries are grappling with competing economic and climate-resilience priorities.
