Building Climate Adaptation and Resilience in Developing Countries

Research consistently shows that developing and low-income countries are most vulnerable to climate change due to their limited adaptive capacity, weak institutions, insufficient financial resources, and limited capacity to recover from disasters.

Supporting these countries in building resilience, improving their economies, and enhancing the quality of life is now a key responsibility for developed nations.

For example, the EU, its Member States, and the European Investment Bank collectively contributed over €150 billion in public climate finance to developing economies in 2024, according to the European Commission. Much of this funding is channelled through mechanisms such as the Green Climate Fund and Adaptation Fund for adaptation and mitigation.

Poverty increases climate vulnerability, so addressing its root causes yields more effective, sustainable, and long-term solutions rather than relying on short-term climate projects. Much climate finance is directed toward renewable energy installations, early warning systems, and infrastructure. However, weak governance, limited financial and technical capacity, inadequate infrastructure, and local challenges such as political instability, corruption, and lack of standards can hinder project implementation in developing countries (What are the key, 2025).

Donors from the international community and developed countries could then begin with the root problem: how developing countries can reduce poverty and improve their economies. Economic empowerment, a better quality of life, and health are a more sustainable way to build their resilience, not only against the effects of climate change but also against all types of disasters.

A policy research report from the World Bank, “Rethinking Resilience, Adapting to a changing climate”, proposes a five-pronged strategy –  the 5 I’s:  income, information, insurance, infrastructure, and intervention are fundamental for turning climate change from catastrophe into manageable risk.

The report highlights that in poorer countries, climate change manifests as ruined harvests, flooded storefronts, and lost educational opportunities as children are kept out of school.

Therefore, the most important question regarding climate policy is not just about how much carbon the world emits, but also how quickly people, businesses, and governments can prepare for shocks, recover from them, and learn to improve in the future. It’s not about assigning blame for climate change; instead, it’s about how we can become more climate-resilient in the face of its impacts.

The report shows that the answer is quite simple: developed countries are more resilient because they have more income and savings, they receive timely and reliable information from the government, their insurance market is more developed, buffering households and businesses against disasters, they have better technologies, more resources and have adequate and more robust infrastructure, among other things.

The first prong is Income. Rapid income growth is the single most powerful instrument for making an economy more resilient to climate change. With higher incomes, households can save, smooth consumption, and avoid distress sales when hit by shocks. They can invest in risk-reducing measures (such as less flood-prone housing and drought-resistant seeds) and diversify their livelihoods away from climate-exposed activities.

Estimates suggest that globally, a 10% increase in per capita output reduces the number of people vulnerable to climate shocks by around 100 million and that higher incomes considerably attenuate the mortality effects of climate hazards.

The second prong is information. Information allows people to convert a fog of uncertainty into a concrete set of risks—each with a discrete probability—that informs their decisions on how to mitigate them.

Insurance, the third prong, becomes a more feasible option once risk information becomes widely available. It enables individuals, businesses, and governments to recoup at least some of the financial loss from a disaster.

The fourth prong is infrastructure. The government plays a crucial role here. Access to safe water, improved sanitation, and electricity is essential for development — and doubly desirable because it reduces health risks from climate-related disasters.

The fifth prong, government interventions, will remain necessary to protect the most vulnerable households: a prompt rollout of cash transfers and other social protection benefits can prevent a near- and long-term rise in poverty in the aftermath of a climate disaster. But such benefits should be targeted, temporary, and rule-based.