Climate Finance Allocations and Vulnerability

The paper seeks to inform ongoing debate about the allocation of climate finance by reviewing and presenting new evidence on assessments of vulnerability and the allocation of adaptation finance. It finds that the five vulnerability indices reviewed give wildly different results, with very few countries consistently ranked in the top quartile: Least developed countries (LDCs) and low-income countries (LICs) appear to be most vulnerable to climate change, while more often than not, most small island developing states (SIDS) are actually ranked in the bottom half. It also finds huge variation in adaptation finance across developing countries, with per capita levels ranging from less than a dollar to more than $2,400 each year over the period 2016–2023. Adaptation finance is concentrated in relatively few countries, with many SIDS receiving exceptionally high levels per capita. Moreover, there is virtually no correlation between adaptation finance per head and either levels of vulnerability or per capita income across all country groups. The paper concludes that more of a focus on LDCs and LICs than on SIDS is needed when it comes to prioritising adaptation finance, that further technical work on measures of vulnerability is needed, that this needs to be tied into a political process probably led by the United Nations Framework Convention on Climate Change, and that differences between adaptation and loss and damage finance need to be more clearly recognised when talking about the allocation of funds.

Update (March 2026): A minor error in Table 4 has been corrected since the original publication.