Adaptation financing mechanisms for action at the local and regional levels

European cities and regions are increasingly suffering the effects of disruptive heatwaves, droughts, floods, wildfires and other extreme weather phenomena. Economic losses from such events affect public finances, insurers, investors and financial markets, as well as the wider economy. Low-income households are likely to suffer more from climate change due to tighter financial constraints that limit their adaptive capacities, putting the social and economic cohesion of the EU at risk. While local and regional authorities (LRAs) are frontrunners in reducing greenhouse gas emissions, they increasingly need to step up measures to ensure the climate adaptation and resilience of their communities, to protect lives, infrastructure and businesses. However, the presence of a complex governance framework, unclear ownership of risks, and a growing gap in adaptation financing is preventing the robust and effective implementation of adaptation measures at the local level. In this context, unlocking private investments for adaptation is a central issue, given the massive financing needs, large climate adaptation gaps and the limited public resources available to address them. This study provides an overview of the availability of public and private adaptation financing, barriers and innovative solutions to help policymakers to put in place all necessary corrective measures so that access to adaptation financing is indeed guaranteed.