This technical paper contributes to the broader adaptation finance agenda by expanding our understanding of what is required to unlock investment into adaptation well beyond the prevalent finance supply-side approach. It introduces the foundational concepts of adaptation markets and the adaptation economy—a whole-economy approach that views adaptation as an economic transformation rather than a sectoral or project-based intervention.
The paper establishes the analytical basis for understanding how adaptation emerges through the interaction of market systems, policy environments, and investment dynamics, emphasising that effective adaptation requires functioning markets that deliver resilience as a good, service, and public benefit. By reframing adaptation as a systemic economic transition—akin to the green or digital transitions—it identifies the structural features and institutional conditions that enable private initiative, innovation, and capital flows toward adaptation solutions.
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