Global adaptation finance is falling short, and too little of it reaches local level. Small, direct grants are one way to change that.
The gap between what developing countries need for adaptation and what they receive is now very large. UNEP's Adaptation Gap Report 2025 estimates that developing countries will need between US$310 billion and US$365 billion a year by 2035. International public finance for adaptation stood at US$26 billion in 2023, down from US$28 billion the year before. On current trends, the Glasgow pledge to double adaptation finance to around US$40 billion by 2025 will not be met.
The amount is only part of the problem. The other part is where the money goes. When the International Institute for Environment and Development (IIED) examined the main international climate funds, it estimated that less than 10 per cent of the US$17 billion committed by 2016 was prioritised for activities at local level. Most finance flows through national ministries and large implementing agencies, and a great deal of it is spent before it reaches the communities living with the impacts.
Developing countries will need up to US$365 billion a year for adaptation by 2035. In 2023 they received US$26 billion in international public finance. Of the money committed by the main climate funds up to 2016, less than 10 per cent was set aside for local action. We look at why the money misses local communities and how small, direct grants can help.
Why the last mile matters
Adaptation happens in specific places. A community dam, a flood warning system or a switch to crops that tolerate drought is built and maintained by local people. When finance stops at national level, projects are often designed without local knowledge, arrive late and end when the funding cycle closes.
The Principles for Locally Led Adaptation, published in 2021 through the Global Commission on Adaptation and since endorsed by more than 100 organisations, set out a different approach. They call for decisions to be made at the lowest appropriate level, for funding that is patient, predictable and easier to access, and for investment in local institutions that will outlast any single project.
What small grants can do
Direct small grants are one practical way to put these principles to work. They are modest in size, simple to apply for and managed close to the ground. For a women's farming group or a community organisation, a small grant can pay for a rainwater harvesting structure, a seed bank or a training session at the moment it is needed, rather than two years later.
Small grants also build something larger than the project itself. Groups learn to plan, budget, keep records and report, which makes them credible partners for larger funders later on. That is the institutional legacy the principles describe.
The Centre's Mini Adaptation Grant puts this into practice on a small scale. Each year we award a grant to a graduate of our adaptation training, who uses it for seeds and inputs suited to a changing climate, water on the farm, or a small green enterprise.
What funders can do
Funders who want their adaptation finance to reach the people most affected can:
- set aside a share of each programme for grants managed at community level;
- simplify application and reporting requirements for small grants;
- fund the organisations that support community groups for several years rather than one; and
- judge success by what communities can do after the grant, as well as by money disbursed.
The adaptation finance gap will not close quickly. More of the money that already exists can still reach the places where it does the most good.
References
Global Commission on Adaptation and World Resources Institute (2021). Principles for Locally Led Adaptation.
Soanes, M., Rai, N., Steele, P., Shakya, C. and Macgregor, J. (2017). Delivering real change: getting international climate finance to the local level. London: IIED.
United Nations Environment Programme (2025). Adaptation Gap Report 2025: Running on Empty. Nairobi: UNEP.
