Empowering Local Leadership in Climate Adaptation and Finance

Local communities and municipalities are at the forefront of climate change impacts and have the most relevant experience with it. But despite their encounters with extreme events, they are not usually at the centre or leading in decision-making on how they could be protected from climate impacts.

When it comes to climate finance, which comes from bilateral and multilateral international funders and funds, national sources, and subnational and local-level mechanisms, communities and locals tend to be recipients of distant experts’ recommendations rather than the leaders and decision-makers in planning, designing, and implementing them.

A growing body of research points to the need for climate change adaptation (CCA) and disaster risk reduction (DRR) solutions – from flood risk management and water systems to climate-resilient agriculture, early warning systems, and community infrastructure. When CCA and DRR solutions are locally led and designed, they are better targeted, more accountable, and more responsive to the realities that people face, which top-down approaches often miss.

The report from  Climate Resilience Alliance, “Pathways to Locally Led Adaptation: Lessons for Effective Climate Resilience Finance” published on June 2026, discusses how to strengthen, empower, and actively involve local communities and leaders, local government and officials, and grassroots organisation on the design and delivery of climate change adaptation and disaster risk reduction finance for them to have to have greater control over the decisions and resources that directly impacts them.

The report distils what the Alliance has learned through working directly within planning and budgeting processes in 10 countries: Bangladesh, Bolivia, Indonesia, Jordan, Kenya, Malawi, Nepal, Nigeria, the Philippines, and Vietnam.

It shows how locally led climate adaptation can be institutionalised when community priorities, evidence-based planning, and public finance are aligned.

The report highlights the three main themes that emerge to strengthen public finance and policy for locally led adaptation that unfold in real settings across diverse contexts:

• securing dedicated local budget allocations for CCA and DRR;
• grounding policy, planning and regulatory influence in evidence from communities;
• and strengthening participatory processes that give local actors, including marginalised groups, meaningful influence over decisions and resource allocation.

The case studies in the report show what is achievable and how to achieve it within the existing governance system. They lay out the actions taken, the outcome, and a practical lesson that is applicable elsewhere.

The case studies also reveal common barriers, such as structural fiscal constraints, short political cycles, and limited capacity, and ways to overcome them.

The case study demonstrates that when public finance systems apply locally led adaptation principles in practice, such as targeted devolved allocations, inclusive planning, and transparency and accountability mechanisms, adaptation investments are more likely to reach those most at risk.

Below are three examples out of the 10 case studies featured in the report.

• Bangladesh faces a growing threat from riverine and flash floods and intensifying heatwaves. While the country has a well-established national disaster risk management framework, its local implementation remains uneven due to limited resources, data, and budget. Concern – Ireland’s largest aid and humanitarian agency worked with their country’s local councils or Union Parishads (UPs) and Union Disaster Management Committees (UDMCs) to influence how local resources were allocated for CCA and DRR. This included supporting UPs to engage in planning and budgeting processes and building their capacity in budget analysis, financial tracking, and resource mobilisation. Concern and GUK also revitalised UDMCs by helping them establish and operationalise local emergency funds and facilitating community consultations and resilience assessments to ensure local risk-informed planning.

The collaboration resulted in an increase in the number of UPs from 7 in fiscal year 2024-2025 to 10 in FY8 2025 to 2026, with DRR budgets increasing by 22%. These funds supported repairs to embankments, bamboo bridges, and small-scale infrastructure, signalling a move from reactive response to proactive risk reduction.

• Bolivia’s faces growing risks from flooding, wildfires, droughts, and frosts, which threaten lives, livelihoods, ecosystems, and tourism-dependent economies. While the country has a relatively robust national policy framework for CCA and DRR, coordination gaps and insufficient budget allocation, which limit action on the ground.

Practical Action, an international development organisation that works with communities in Africa, Asia, and Latin America to reduce poverty and build resilience to climate change, conducted a climate resilience measurement for communities (CRMC) assessment in 24 Amazonian and Andean River basins communities, which served as an entry point for engagement with communities.  The CRMC assessments revealed local risks, vulnerabilities, and resilience gaps. The information was shared with communities, Indigenous territorial authorities, and municipal governments, creating a common evidence base for decision-making.

This process integrated risk-reduction priorities into municipal planning frameworks, strengthened coordination between governance levels, and increased dialogue between stakeholders, providing a structured way for community priorities to enter formal planning processes.

A key outcome was the mobilisation of municipal co-financing from the community, the municipality, Indigenous budgets, and Alliance funding, totalling approximately US$74,000. The result demonstrated how evidence-based planning and strengthened governance linkages can translate into concrete financial commitments and increased ownership of resilience priorities.

• Lastly, Malawi’s recurring floods,, which affect 16% of the country’s surface area, droughts, and cyclones regularly lead to loss of life, displacement of communities, and damage to infrastructure and livelihoods.

The country’s Disaster Risk Management Act (2023) provided a new legal basis for decentralised DRR and established a national DRM Trust Fund. However, the Fund is not yet operational, and only around 1% of the national budget is allocated to DRR, with funding prioritising response over risk reduction.

The Community Resilience Fund (CRF) is a community-managed financing mechanism designed to address gaps in decentralised DRR financing. Since it was piloted in three communities in 2023, it has expanded into more communities, with each forming a Community Resilience Fund Committee (CRFC) made up of representatives from existing local governance structures and local government technical experts.

These committees manage the entire project cycle: from needs assessments and proposal development to procurement and implementation. Training in financial management and proposal development has strengthened communities’ ability to manage funds transparently and engage with other funding sources, helping build trust and positioning them to access future investment from mechanisms such as the national DRM Trust Fund.

The establishment of CRFs shows that communities can take a leading role in disaster financing when supported with the right capacities. CRFC members now identify priorities, develop proposals, and allocate resources themselves, shifting communities from passive recipients of aid to active decision makers in local financing processes.

The model strengthened financial literacy and confidence, enabling communities to engage more effectively with local government officers and navigate formal financing systems. It also demonstrated cost-effectiveness: community-level procurement from local markets has proven cheaper and more efficient than external procurement, due to reduced transport costs, fewer intermediaries, and reliance on local markets.

Download the report: Pathways to locally led adaptation: Lessons for effective climate resilience finance.