RFP for Estimating Adaptation Financing Gaps and Economic Impact of Climate Change in India

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As the lead United Nations agency on international development, UNDP works in 170 countries and territories to eradicate poverty and reduce inequality. We help countries develop policies, leadership skills, partnerships and institutional capabilities to achieve the Sustainable Development Goals. Our work is centred around six core development areas, known as our signature solutions: poverty and inequality, governance, resilience, environment, energy and gender equality.

Mission and Vision:

UNDP’s mandate is to end poverty, build democratic governance, rule of law, and inclusive institutions. We advocate for change, and connect countries to knowledge, experience and resources to help people build a better life.

About the Proposal

Consultancy Title: Estimating Adaptation Financing Gaps and Economic Impact of Climate Change in India

Background:

UNDP has been working in India since 1951 in almost all areas of human development. Together with the Government of India and development partners, we have worked towards eradicating poverty, reducing inequalities, strengthening local governance, enhancing community resilience, protecting the environment, supporting policy initiatives and institutional reforms, and accelerating sustainable development for all. With projects and programmes in every state and union territory in India, UNDP works with national and subnational government, and diverse development actors to deliver people-centric results, particularly for the most vulnerable and marginalized communities. As the integrator for collective action on the Sustainable Development Goals (SDGs) within the UN system, we are committed to supporting the Government of India’s national development vision and priorities and accelerating the achievement of the SDGs for the people and the planet.

UNDP India’s new Country Programme (2023-2027) builds on our prior work and aims to provide an integrated approach to development solutions in three strategic portfolios:

• Strong, accountable and evidence-led institutions for accelerated achievement of the SDGs;
• Enhanced economic opportunities and social protection to reduce inequality, with a focus on the marginalized;
• Climate-smart solutions, sustainable ecosystems and resilient development for reduced vulnerability;
• South-South cooperation, gender equality and social inclusion are promoted across the pillars. The programme is supported by a framework of renewed partnerships and blended finance solutions, strategic innovation and accelerator labs, and data and digital architecture.

Project Background and Description:

India is one of the most vulnerable countries to the impacts of climate change, ranking seventh on the Global Climate Risk Index 2021. With high exposure to extreme weather events such as floods, cyclones, and droughts—coupled with widespread socio-economic vulnerabilities—the country faces compounding risks to public health, livelihoods, and overall development. Over 80% of India's population lives in districts classified as highly climate-vulnerable, with low adaptive capacity exacerbating the risks.

While India has made notable progress in advancing climate mitigation and adaptation through national frameworks like the National Action Plan on Climate Change (NAPCC) and State Action Plans on Climate Change (SAPCCs), adaptation efforts remain fragmented. Many of these initiatives lack alignment with national climate priorities and are not adequately grounded in scientific evidence or robust financing strategies. Effective adaptation requires systematic integration of climate science, modelling, and risk-informed planning—areas where significant institutional and technical gaps still exist.

At the same time, the financing needs for adaptation are rising rapidly. According to India’s Adaptation Communication (AdCom), the projected cost of implementing climate adaptation under a business-as-usual scenario by 2030 is estimated at INR 56.68 trillion (approximately USD 678 billion). Broader estimates suggest that cumulative adaptation costs may reach INR 85.6 trillion (USD 1 trillion) by 2030. However, public budgets alone are insufficient to meet this demand, and private investment in adaptation remains limited due to perceived risks, and lack of data.

To address these complex and interconnected challenges, the proposed project aims to institutionalize structures and capacity-building mechanisms for climate science, modelling, adaptation planning, and financing, housed within NITI Aayog. A core component of this initiative is the establishment of a Knowledge Unit on Climate Change Adaptation Modelling. This unit will serve as a hub for generating, analyzing, and disseminating data-driven insights to guide evidence-based decision-making across national and sub-national levels.

By integrating advanced modelling techniques, the project will support the evaluation of adaptation strategies based on risk reduction potential, cost-effectiveness, feasibility, and cobenefits. It will also contribute to the development of financing mechanisms through cost-benefit analysis and adaptation investment planning—thereby unlocking greater flows of private and international finance.

Furthermore, the initiative seeks to strengthen alignment between national and state-level adaptation planning, build institutional capacities, and create enabling policy environments for long-term resilience. It also aligns with India’s broader development and climate goals, including its Nationally Determined Contributions (NDCs), the Net Zero target by 2070, and commitments under international frameworks such as the Paris Agreement and the Sustainable Development Goals (SDGs).

UNDP is providing technical support to Institutionalize Structures and Capacity Development Mechanisms for Climate Science, Modeling, Adaptation Planning, and Financing at NITI Aayog. As part of these efforts, a Climate Change Adaptation Modelling Team is being established at NITI Ayog to provide data-driven, evidence-based insights for decision-making.

Scope of Work:

Context of the Work/Service

To conduct an Adaptation Finance Assessment in three Indian states (West Bengal, Himachal Pradesh, Maharashtra) and support capacity building efforts by

• Estimating the Economic Impact of Climate Change (EICC) through sectoral damage functions.
• Mapping and analyzing existing adaptation expenditures.
• Estimating the adaptation finance gap (in % of GSDP and INR).
• Recommending financing pathways to close the adaptation gap using public, private, and international sources.

Expected Tasks and Deliverables:

• Development framework and methodology for analysing adaptation financing gaps.

• Conduct a desk-based review of existing global and national approaches and methods for Estimating the adaptation gap
• Prepare an inception report outlining methodology for conducting the assessment at sub-national level in India

• Estimating Economic Impact of Climate Change (EICC)

• Develop and apply national and regional exposure indices to quantify climate risk across sectors.
• Use climate models to identify region- and sector-specific exposure to risks such as sea level rise, temperature and rainfall variability, and extreme weather events.
• Quantify sectoral and aggregate economic impacts using damage functions that link climate hazards to productivity losses, asset damage, and economic disruption.
• Map vulnerable populations and asset hotspots across India’s diverse physiographic zones. o Analyse economic pathways through which climate risks affect regional economies and estimate potential economic losses.
• Conduct state-level assessments of economic vulnerability and resilience, evaluating adaptive capacity across sectors and regions.
• Quantify productivity losses—both natural and labor—resulting from extreme events and climate variability.
• Develop specific damage functions for each identified impact pathway.
• Conduct sensitivity analysis to determine aggregate economic impacts by analyzing variables such as exposure, asset damage, and GDP loss.
• Model macroeconomic trajectories and GDP growth implications under different climate risk scenarios.
• Identify regions and sectors facing the highest economic risk and estimate avoided losses through targeted adaptation interventions.

• Estimation of Adaptation Expenditure

• Review and apply existing classification frameworks (e.g., SAPFIN, CPEIR) to categorize adaptation-related public spending.
• Analyze central and selected state budgets/expenditure data to estimate adaptation expenditure.
• Develop a framework suited for adaptation finance tracking at national and state levels.

• Assessing Effectiveness of Adaptation Spending

• Identify and analyze case studies where adaptation interventions have led to measurable reduction in EICC.
• Use Benefit-Cost Ratio (BCR) analysis to assess adaptation and associated development benefits.
• Compile evidence on effectiveness of adaptation spending from Indian states and international benchmarks.

• Estimating the Adaptation Gap

• Estimate the adaptation resource availability gap of select Indian states and at National level, expressed as a percentage of GDP and in Indian rupees.
• Present short-, medium-, and long-term financing needs.

• Financing Strategy

• Map and suggest avenues (sources of finance) for closing the adaptation gap in the short, mid and long term through public/private funds and from international funds.
• Provide tailored recommendations for closing the adaptation gap.

• Conduct Training Needs Assessment and identify gaps in technical understanding of adaptation modelling tools, data interpretation, finance tracking, and climate budgeting

• Development specialized capacity-building modules based on training needs assessment, including:
• Conducting adaptation modelling and scenario analysis.
• Conducting adaptation financing and budget tagging.
• Inclusion of presentations, exercises, data toolkits, and facilitator guides.
• Organize training workshops and knowledge exchange programs, including at least 3 training workshops for state departments.
• Use interactive formats such as case studies, simulations, and policy labs.
• Provide officials with technical tools and resources.
• Conduct hands-on training on tool usage in collaboration with the NITI Knowledge Unit.

Deliverables/ Outputs:

• Inception Report – Methodology for sub-national adaptation financing gap assessment. Within 2 months.
• Adaptation Gap Framework – Global review + tailored approach for India.
• Economic Impact Assessment – Climate risk indices, damage functions, and sectoral loss estimates. Within 4 months.
• Adaptation Expenditure Analysis – Budget tagging and finance tracking framework. Within 6 months.
• Effectiveness Assessment – Case studies and BCR analysis of adaptation interventions.
• Capacity Building Toolkit – Training needs assessment, modules, toolkits, and 3 workshops. Within 8 months.
• Financing Strategy – Recommendations to close the gap via public/private/international finance. Within 10 months.
• Adaptation Gap Estimation – Financing gap (₹ and %GDP), short- to long-term needs. Within 12 months.

Key Outputs:

• Strengthen the Climate Change Knowledge Unit at NITI Aayog, through capacity building modules on climate finance, climate adaptation modelling, and climate budget tagging
• Develop guidance and build capacities for climate adaptation modelling, budget/expenditure tagging for climate actions at sub-national levels
• Assessment Report on adaptation expenditure, its effectiveness and requirement of adaptation financing at National level and state level (upto 3 states)

Duration of the Assignment: 1 year

Institutional Arrangement: Head, Action for Climate and Environment Unit Programme Director NITI Aayog

Eligibility

The selected firm must demonstrate strong expertise and institutional experience in the field of climate change adaptation, economic modeling, and climate finance. The following qualifications are essential:

• Minimum 5 years of experience in climate change adaptation, climate finance, and/or economic impact modeling.
• Proven experience in adaptation finance assessments and public finance analysis including budget tagging and classification frameworks (e.g., SAPFIN, CPEIR).
• Demonstrated ability to work with national and sub-national governments in India, multilateral development agencies and bilateral cooperation agencies.
• Experience in conducting vulnerability assessments, climate risk modeling, and economic scenario analysis using climate models and economic tools.
• Strong understanding of Indian climate policy frameworks including SAPCCs, NAPCC, and India’s National Adaptation Plan under development.
• Ability to conduct multi-stakeholder consultations and design capacity-building programs tailored to public sector institutions.
• Robust internal project management systems and mechanisms for quality assurance, backstopping, and peer review.

How to Apply

Deadline on: 30-May-2025 08:00 (GMT -4.00)

For more information please check the Link

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Tags Disaster Response and Relief (DRR) Environment and Sustainability Others