Adaptation / German climate finance

Climate Adaptation Finance Index 2025: Despite progress, climate finance remains unfair

4. November 2025

International adaptation finance remains at the heart of the climate policy justice debate. The new Climate Adaptation Finance Index (CAFI) 2025 shows that slight progress has been made. However, the central promise of the Paris Agreement – to support the most vulnerable countries – remains largely unfulfilled.

Slight progress, but massive imbalances

For the first time since calculations began three years ago, the CAFI shows a slight improvement. Global adaptation capacity has increased by three percentage points. Institutional factors such as disaster preparedness and governance capacities, as well as infrastructural factors such as physical and communications infrastructure as well as health systems, have improved worldwide. This reduces the damage caused by increasing climate-related disasters such as storms, droughts and floods. This trend shows that adaptation measures can have a fundamental impact. At the same time, the average index value of 0.59 remains in the “severely underfunded” range. Even Germany, which scores slightly better (0.62), does not live up to its responsibility.

What is worrying is that 90 per cent of all countries receive too little adaptation funding in relation to their climate risk. The situation is particularly dramatic in countries such as Afghanistan, Chad, South Sudan, Somalia, Niger, Mali and Yemen. Here, the principle of “vulnerability-based finance” is reversed: the most vulnerable countries are left empty-handed.

US withdrawal exacerbates the crisis

Executive Order 14162, with which the new US administration terminated all international climate finance commitments on 20 January 2025, came as a shock to global adaptation finance. African countries such as Nigeria, Uganda and the Democratic Republic of Congo (DRC) are particularly affected, as are smaller states such as Eswatini, Jamaica and Zimbabwe, where the United Stages accounted for more than half of total adaptation finance.

Regional and structural inequalities

The regional analysis shows a clear pattern. While Oceania receives reasonably adequate funding, Africa remains at the bottom of the list, followed by Asia. Only the Small Island Developing States (SIDS) receive reasonably adequate support in relation to their climate risk. Countries with high poverty, fragile statehood or extreme risk, on the other hand, are structurally disadvantaged. This is a clear violation of the principles of the Paris Agreement.

Germany performs slightly better than the donor average, especially in Africa and Asia. However, even here, the overall distribution is not commensurate with the risk faced by the countries (see Figure 1).

Figure 1: World map showing Germany’s contribution to adaptation financing in 2025

Target of doubling adaptation finance missed

At the UN Climate Change Conference in Glasgow in 2019, industrialised countries promised to double adaptation finance by 2025. According to CAFI, international adaptation financing has grown by 76 per cent by 2022, but this increase is mainly due to projects that are only partially focused on adaptation to climate change. Projects with a clear adaptation focus increased by only half as much. This means that the doubling target is clearly at risk of being missed.

Poor results on gender equality

Gender equality in adaptation finance is also stagnating. Although the volume of gender-related adaptation financing has tripled between 2016 and 2022, the share of funds with gender as their main objective remains at only 5 per cent. Countries such as Canada and Luxembourg are setting a positive example here, while Germany is mediocre at best, ranking 15th.

Conclusion for adaptation finance in 2025

CAFI 2025 clearly shows that adaptation finance is effective and strengthens adaptation capacities worldwide – but it is not being used where it is most urgently needed. As long as the distribution of funds continues to turn its back on the poorest and most vulnerable countries, the promise of the Paris Agreement will remain an empty shell. It is high time to finally take the principle of climate-just financing seriously.

Political consequences: Act now

CAFI 2025 shows that a decisive shift in climate finance is needed. As the most important bilateral donor for adaptation finance, Germany has a special responsibility here and should play a leading role in the following areas of action:

Adaptation finance must be significantly increased in order to keep pace with rising global climate risks and to meet the Paris Agreement target (Article 9.4) of equal financing for mitigation and adaptation.
In order to quickly close financing gaps, including those caused by the loss of US funding, the largest providers of adaptation finance, such as multilateral development banks (MDBs), Germany, France, Japan and the EU, must take immediate action. Other donor countries in the Global North must also make their fair contribution. New sources of financing based on the polluter pays principle, such as taxes on fossil fuels, luxury flights or wealth, must be developed as quickly as possible.
Adaptation finance needs to be made more equitable and efficient through risk-based distribution keys. Supporting vulnerable populations in fragile contexts and those affected by violent conflict and war should be a top priority. This includes targeted support for fragile states, in conjunction with humanitarian and peacebuilding approaches. More flexibility is needed in fragile contexts, such as working with indigenous or traditional structures, and closer cooperation with local civil society. Strengthening gender equality increases the effectiveness of adaptation finance.
A high-level summit on adaptation finance would be an appropriate forum to give the issue greater weight. Germany should organise such a summit in 2026 together with Brazil, the chair of the upcoming COP30, and the Climate Vulnerable Forum.

Sabine Minninger, Bread for the World