Declining Climate Funding Spurs Index of Most Vulnerable Nations

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(Bloomberg) — A new climate risk index seeks to help get the dwindling pool of aid for climate adaptation to the countries that need it most.

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The Climate Finance Vulnerability Index combines factors measuring a country’s exposure to climate hazards with indicators of its financial resilience, including access to loans and level of debt. It’s designed to help  funders direct grants and low-interest loans to countries that are both most exposed to climate perils and less able to access funds through other means. 

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The index, which allows users to filter for 2050 or 2080 and either “optimistic” or “pessimistic” scenarios, includes 188 countries, with Norway in the least vulnerable position and Guinea-Bissau the most. The analysis found that most of the more vulnerable countries are in Africa, and more than 2 billion people live in “red-zone” countries, where there is a high risk of climate disaster and minimal access to finance. 

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Africa is warming faster than the global average, even though it accounts for less than 4% of the world’s greenhouse gas emissions. Droughts, heat waves and floods have battered communities across the continent. And poor infrastructure has hindered their ability to cope. That’s created a strong reliance on multilateral lenders that provide a mix of grants and soft loans to help countries stave off the worst effects of climate change, but that funding is unevenly distributed.

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“Countries that need financing for adaptation the most are not necessarily the ones getting it,” said Gautam Jain, senior research scholar at Columbia University’s Center on Global Energy Policy and the index’s co-creator. Countries like India, which are very vulnerable to climate hazards like flooding and high levels of heat, may actually be relatively resilient because they are better able to cope with such disasters based on the strength of their infrastructure and ability to respond. 

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The index, which was developed by Columbia University and funded by the Rockefeller Foundation, is timely because of the significant shortfall in funding for adaptation, which is expected to be a focal point for discussions at November’s COP30 conference in Brazil. 

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“Every country needs more support for climate adaptation,” said Jeffrey Schlegelmilch, who led the development of the index and heads the National Center for Disaster Preparedness at the Columbia Climate School. “This is a relative ranking.”

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Still, the most vulnerable nations will likely become even more so in the wake of foreign funding cuts, he said. Both the US and the UK have announced reductions in aid spending in recent months. 

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That means less support to bridge an already huge funding gap. The annual average cost of adaptation in developing countries is estimated to be $215 billion to $387 billion, while adaptation funding from public finances reached $27.5 billion in 2022.

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“There is a very small amount that’s going out,” Jain said. “At least let’s divert those flows where it can have the biggest impact.” 

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