Scaling Climate Finance For Locally-led Adaptation: Lessons From The Global South

As the frequency and impacts of climate events increase, demand for adaptation at the local level becomes urgent. The adaptation finance received from developing and least- developed countries is estimated to be less than USD 25 billion per year, which is exponentially less than the required amount of USD 215 billion per year. Further, the evidence indicates that less than 10% of global climate finance reaches the local level. Local communities lack the institutional capacity, financial tools, and knowledge networks necessary to secure adaptation finance. Complex application procedures, limited funding availability, and unequal distribution exacerbate the challenge. This highlights the need for developing innovative approaches to enhance access to adaptation finance at the local level in the Global South. Locally-Led Adaptation (LLA) can play a crucial role in addressing this challenge at scale. It addresses structural inequalities by ensuring that the decision-making authority lies with the sub-national and local actors and further fosters partnerships with funders, government and multilateral agencies. LLA holds the potential to act as a catalyst to attract the necessary funding, required to bridge the widening adaptation finance gap. Members of G20 must leverage international cooperation to strengthen LLA across climate risk-prone regions and promote inclusive climate action at scale in the Global South. This policy brief provides recommendations to enhance access to adaptation finance based on existing LLA actions, implemented across various developing countries. We propose a five-pronged strategy, with a focus on innovative adaptation finance mechanisms, institutional strengthening, and social inclusion to empower local communities to access climate finance effectively. By uplifting localised priorities instead of one-size-fits-all external interventions, the proposed integrated approach aims to support G20 countries in unlocking the transformative potential of climate finance in charting locally-led regenerative futures.