Finance for locally-led adaptation

Access to finance is a critical obstacle to scaling climate initiatives in developing countries, hindering the empowerment of local communities and indigenous populations as well. Funding for locally led adaptation (LLA) in these regions is plagued by capacity gaps, accountability issues, inadequate resources, and poor alignment with local needs. The financial instruments are also often insufficient for effective adaptation measures.

Climate finance in the Global South has traditionally prioritised mitigation efforts, with adaptation finance significantly underfunded. This highlights the urgent need for increased funding and support for resilience and capacity building. This learning journey identified existing LLA mechanisms, examined community members’ experiences in financing LLA projects, and investigated ways to foster better collaboration and mutual understanding. It concludes that funders must adapt and prioritise capacity building and inclusive funding models. Innovative finance, like Guatemala's carbon credit programme, can empower local communities.