McKinsey Global Institute: Climate adaptation could need $1.2 trillion a year by 2050. $690 billion of it is stuck

The McKinsey Global Institute estimates that global climate adaptation could cost $1.2 trillion annually by 2050, leaving $690 billion in potential annual adaptation spending untapped. This issue stems from a lack of affordability, willingness to act, and ability to implement measures, rather than a shortage of solutions or economic value.

Cooling systems, irrigation, and flood defenses can all provide substantial benefits, as on average, adaptation measures deliver three times their cost in avoided losses. However, the deployment of these solutions is hindered by varying barriers across income levels. In lower-income regions, adaptation competes with essential needs like food and housing, and lenders may doubt borrowers' repayment capabilities.

In higher-income regions, costs are relatively low, with more than half of the needed investment expected to be deployment ready. Making adaptation affordable requires the development of lower-cost solutions and financing options that can reach underserved households.