The Adaptation Investment Cycle: The Missing link for bridging the regional adaptation gap in Europe

Europe, as the fastest warming continent, faces elevated climate risks coupled with a climate adaptation finance gap, defined as the difference between the costs of achieving an adaptation target and the amount of finance available for adaptation (UNEP, 2024). The EU needs to invest almost EUR 70 billion per year in climate adaptation up to 2050 (Monteleone et al., 2026). However, current funding relies heavily on public sources, highlighting the urgent need for private sector involvement (CPI, 2023). Regions and cities in the EU face barriers in their effort to muster financial resources to translate adaptation strategies into tangible projects to promote climate and socioeconomic resilience. The Adaptation Investment Cycle (AIC), developed in the HEU Pathways2Resilience project, is a six-step process designed to help regions overcome barriers to financing climate adaptation by offering a step-by-step approach that builds local capacity and bridges gaps between planning and implementation. This paper maps the steps of the AIC to common adaptation finance barriers -economic, financial, awareness, behavioral, and institutional-, highlights their impact on raising and leveraging capital to strengthen regional resilience and assesses innovative financial sources and instruments tailored to regional needs. Finally, we emphasize concise frameworks for sub-national adaptation finance and contribute to the literature on regional resilience.