Adaptation needs are vast, rising fast and difficult to determine in their entirety, especially with uncertain adverse scenarios due to climate inertia and implementation lags. Adaptation is hindered by a lack of a unified understanding of what it necessitates; the challenge in pointing out its costs, benefits, and residual risks; insufficiently prescriptive policy and legal frameworks; and the growing financing gap. Conversely, we now have better granular climate data to study the impacts of climate hazards and forecast climate risks; there is awareness that adaptation choices must be dynamic and reactive; and there is an increasing pool of case studies from which to learn. There is evidence that efficient adaptation investments can yield “triple-dividends” helping to close the financing gap. There is a need to absorb and smooth the impacts of rising extreme climate events. Innovative financial instruments, such as catastrophe bonds and climate bonds, might support challenged insurance coverages.
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