Unlocking adaptation finance in emerging market and developing economies

The IMF Staff Climate Notes provide analysis related to the impact of climate change on macroeconomic and financial stability, including on mitigation, adaptation, and transition. This note contributes to the policy dialogue on scaling up adaptation finance. Adaptation challenges and access to financial resources vary significantly across Emerging Market and Developing Economies (EMDEs). 

In seeking to advance different approaches to and sources of adaptation finance, especially in EMDEs, the note (1) synthesizes the financial industry’s perspective on adaptation investments, highlighting key distinctions between strategies for adaptation and mitigation; (2) examines the current state of the adaptation finance ecosystem and focuses on a subset of financial instruments suitable for adaptation; and (3) draws lessons from the RST and the IMF’s role in the broader climate finance architecture.