While the COVID-19 pandemic disrupted livelihoods and triggered a global economic crisis, the unprecedented scale of recovery funding approved by governments also presented an opportunity to rethink business as usual. International institutions from the UN to the World Bank encouraged governments — particularly in poorer countries that are especially vulnerable to climate impacts — to leverage their recovery packages to “build back better” by investing in climate-resilient societies and economies.
Co-managed by WRI, the Global Commission on Adaptation similarly called for countries to align their economic recovery packages with, and accelerate the achievement of, longer-term climate objectives. This is because returns on certain investments in climate adaptation — such as early warning systems, resilient infrastructure and water resources management — far outweigh the costs and can yield economic, social and environmental benefits even when extreme events don’t materialize.
So, how did countries respond? Research produced by WRI and the Global Resilience Partnership found that only a handful of countries capitalized on this opportunity. Moreover, wealthier and less-vulnerable countries were more likely to pursue adaptation action than low- and middle-income countries on the frontlines of the climate crisis — a paradox that persists today.
The COVID-19 pandemic is now largely behind us, but climate risks and the need for adaptation are only growing. As we look ahead, knowing whether and how countries invested in resilience during a time of unprecedented public spending can offer valuable insights for closing the adaptation gap.
What We Found
We reviewed COVID-19 recovery measures approved from 2020-2021 by 67 countries, representing a range of geographies and income levels. We found that they largely failed to integrate climate adaptation and resilience into their economic recovery plans and investments. Specifically, our analysis revealed:
1) The need for greater political awareness and leadership
Only 16 countries (24%) of those we analyzed pursued a climate-resilient recovery by defining a high-level goal or commitment to climate adaptation and resilience, approving concrete actions that explicitly responded to specific physical climate risks (e.g., climate-risk-responsive measures), or both. These climate-risk-responsive measures could take the form of direct investments in adaptation, or the adoption of fiscal, monetary or other policy actions.
Among the countries that approved such measures, most approved investments or policies to address water resources management, disaster prevention, infrastructure and nature-based solutions (see the map below).
Countries that articulated high-level commitments were more likely to take concrete adaptation action — such as approving policies or investments to reduce or manage specific climate risks — than those without overarching climate resilience goals. For example, Italy’s National Recovery Plan aimed to improve the country’s climate resilience by protecting nature and biodiversity and included investments in flood management. This underscores the need to raise political awareness about the economic and social damages associated with climate change and the benefits of investing in adaptation and resilience.
2) A paradox of vulnerability and income
Our study found that higher-income, less climate-vulnerable countries were more likely to take concrete adaptation action during their COVID-19 recoveries than lower-income, more vulnerable countries. While 80% of high-income countries and all of the upper-middle income countries that demonstrated a risk-responsive recovery did so through direct investments in climate adaptation, only 40% of lower-middle-income countries did so (see the figure below). This tracks with trends in overall COVID-19 recovery spending: higher-income countries spent a higher share of their GDP to manage the impacts and recover from the pandemic as compared to other country income groups.
Overall, the least vulnerable countries in our analysis were 3 times more likely to take adaptation action than the most vulnerable countries. G20 countries, which represent about 85% of global GDP, were twice as likely to have responded to physical climate risks through their recovery measures as members of the Vulnerable Twenty (V20) — a group of mostly middle-income countries representing those economies most vulnerable to climate change.
Kenya and Vanuatu, both lower-middle-income countries, were the only “most vulnerable” countries found to have taken adaptation action. Kenya invested US$94 million in flood mitigation measures, while Vanuatu included the improved resilience of vulnerable groups to cyclones as a key policy outcome of its recovery framework.
3) Too little focus on addressing inequities
Most countries’ COVID-19 recoveries targeted groups that were particularly vulnerable to the social and economic impacts of the pandemic. However, recovery measures that aimed to reduce or manage physical climate risks were generally broad, without consideration for the unique vulnerabilities of specific groups.
There were a few notable exceptions. Canada’s A Healthy Environment and A Healthy Economy plan committed to better enabling Indigenous climate leadership, including investing over US$770 million to support Indigenous-led projects and improving Indigenous peoples’ access to the country’s Disaster Mitigation and Adaptation Fund. Vanuatu’s Recovery Strategy 2020-2023 aimed to leverage traditional food preservation and building practices to improve the disaster preparedness and response of vulnerable groups, including women and elderly people.
More of these targeted efforts are needed around the world. Building climate resilience can help address social inequities, since areas with higher climate vulnerability are associated with residents who are also more susceptible to economic shocks. Following the Principles for Locally Led Adaptation could better ensure that people facing marginalization play a leading role in the design and implementation of adaptation actions that address the root causes of their climate vulnerabilities.
With Recovery Funding in the Rearview, What’s Needed Now to Accelerate Adaptation?
While the surge in government spending during COVID recovery is now a thing of the past, investments in climate resilience cannot wait. The longer countries delay in adapting to climate change, the more extensive the damages will be, and the more expensive adaptation will become.
On the heels of another UN climate summit (COP29) that failed to match international climate finance commitments to the needs of developing countries, governments, especially of vulnerable countries, and international institutions must work together to accelerate adaptation investment. This includes:
- Strengthening economic and financial analyses of climate risks. Governments — even in highly vulnerable countries — may lack the motivation to act without an improved understanding of the economic, social and environmental risks of climate change. Ministries of finance, planning and economy are responsible for fiscal and financial decision-making that shapes the economic trajectory of their countries. These ministries should apply systematic climate risk screening tools and integrate physical climate risks into macro-economic modelling to better understand the need for, and prioritize, adaptation investments. However, both depend on the improved availability and quality of required data, for which national bureaus or institutes of statistics play a key role.
- Mainstreaming climate adaptation and resilience into regular planning and budgeting processes. Governments should seek to elevate climate resilience within national development plans and frameworks as an overarching outcome or key priority; this can help improve the alignment of adaptation and development goals across sectors in support of a whole-of-economy response to climate change. Earmarking a required percentage of national budgets for adaptation investments and developing climate budget tagging (CBT) frameworks could also help to ensure steady funding for building climate resilience in vulnerable countries and improve accountability. Indonesia’s development and application of its own CBT process to monitor and track climate-related public spending, for example, increased allocations to climate adaptation by an estimated US$3.5 billion from 2016 to 2019.
- Establishing pipelines for climate adaptation and resilience projects. Vulnerable developing countries will need technical support to translate national adaptation priorities into evidence-based adaptation programs that address the root causes of climate vulnerability and can be leveraged to access available domestic and international finance.
- Scaling concessional finance and debt relief. Many low- and middle-income countries will require both concessional finance and debt relief to invest in climate adaptation without increasing already high debt burdens. Development finance institutions must increase available international concessional climate finance by at least 5 times to achieve the Paris Agreement goals by 2030. This is particularly true for multilateral environment and climate funds, which collectively represented a mere 5% of concessional climate finance provided from 2018 to 2022.
The need for investment in climate adaptation continues to grow as climate impacts escalate. And the economic and social costs of inaction are only rising. The sooner countries prepare for a future we know will be more volatile, the better off they and their citizens will be.