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This paper explores the concept of ‘adaptation finance’ in national budgetary systems and proposes pragmatic ways forward in strengthening the policy debate.

Adaptation finance is a key ingredient of international efforts to support vulnerable countries in responding to climate change. Building a comprehensive picture of the scale and scope of such investments is needed in understanding where financial flows are being targeted. Doing so requires robust systems for monitoring the flow of adaptation finance across scales – from international and national levels to project and household contexts.

Despite this need, existing methodologies for coding and tracking adaptation finance are, by and large, inadequate. They are seen to promote the conceptual separation of adaptation and development, and often fail to capture the wide range of activities that promote adaptation on the ground.

Recognising that processes of coding and tracking of adaptation are executed for a number of different purposes (depending on the users and their respective needs) this paper argues for more innovative systems to be trialled and implemented at all levels. It calls for the diversification of categories used to track adaptation activities, to include factors such as sectoral distribution, geographic location, and type of adaptation. The paper proposes that efforts to track and code adaptation spending, and efforts to monitor effectiveness of adaptation activities, should be more closely aligned and integrated.