Adaptation Investment Cycle & Funding Catalogue (P2R): A Practical Roadmap

By Ingrid Coninx

Kostas Dellis presented the Adaptation Investment Cycle (AIC) - a six-step methodology developed under the Pathway2Resilience (P2R) programme to help regions progress from vision to investment. At the core is a user-friendly catalogue of funding sources and financial instruments across national and EU levels (e.g. Horizon Europe, European Investment Bank), designed to increase awareness and uptake.

The approach aims to tackle persistent barriers:

Limited financial literacy within public authorities
Difficulty articulating economic co-benefits to investors
Fragmented finance streams between adaptation and mitigation

Key Message

Closing the adaptation finance gap in Europe requires more than funding - it demands a shift in mindset, policy frameworks, and investment culture. This session brought together leading voices in climate finance, policy and urban development to explore how to turn adaptation plans into bankable investment portfolios.

From planning to investment: The Capital Hub

Allison Lobb introduced the Capital Hub, which supports local authorities in moving from planning to financing. While mitigation remains a common entry point, adaptation is increasingly integrated into broader city climate portfolios.

She noted that no policy currently mandates adaptation or its financing - and this needs to change. Crucially, it doesn’t have to be governments alone who shoulder the cost. As Lobb emphasized: “We will pay for climate impacts one way or another - either through upfront investment in resilience or the escalating costs of inaction.”

From risk to opportunity: reframing the narrative

Marco Carreira Silva (World Climate Foundation) highlighted a core disconnect: adaptation needs are growing, but bankable projects remain scarce. Public authorities often lack financial expertise, while financial institutions struggle to understand climate risks.

He called for co-created investment strategies and economic storytelling that reframe adaptation as a driver of demand and opportunity (e.g., for software, equipment, green infrastructure) - not just as a response to risk.

He also underscored a growing public awareness of climate change as a threat to health, livelihoods, and everyday life. From extreme weather to psychological stress, the human costs of inaction are mounting. This awareness is fueling a growing willingness to pay for adaptation measures that protect what people value most.

OECD: A Whole-of-Government Framework for Adaptation Finance

Michael Mullan presented the Climate Adaptation Investment Framework (CAIF), an OECD-led initiative that defines six enabling conditions to unlock adaptation finance:

Coherence between adaptation strategies and investment plans
Regulatory alignment across sectors
Insurance and risk transfer mechanisms
Public investment strategies that account for resilience
Integration with sustainable finance taxonomy and transition plans
Incentives for private sector investment in adaptation
Despite strong evidence of cost-effectiveness, less than 2% of global climate finance currently flows to adaptation. Mullan emphasized that overcoming this gap requires moving from scattered initiatives to a strategic, systemic investment approach—one that EU institutions are well-positioned to scale.

Final reflections

The session reinforced a critical insight: adaptation is not a standalone activity—it is a lens through which all public investment should be assessed. Whether it’s greening schoolyards, reducing urban heat, or protecting mental health from climate trauma, adaptation investment is about building the cities we want, not just avoiding the futures we fear.

Chair:

Kit England (Paul Watkiss Associates)

Speakers:

Kostas Dellis (P2R)
Michael Mullan (OECD)
Allison Lobb (Capital Hub)
Marco Carreira Silva (WCF)

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Adaptation Investment Cycle & Funding Catalogue (P2R): A Practical Roadmap

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