Reflections from London Climate Action Week 2026
The London Climate Action Week (LCAW) has become a fairly reliable read on where climate conversation is heading. This year the conversation felt more joined up than usual. Carbon markets, adaptation finance, nature-based solutions and engineered removals used to run on separate tracks. They are starting to converge.
One question kept coming back: can carbon markets and other results based financing mechanisms grow to fund adaptation at scale for the people most exposed to climate risk? And what would have to be true for that to work?
A second thread ran alongside it. Getting there means loosening some rigid artificial categories: mitigation versus adaptation, nature versus technology, and how benefit-share actually reaches people on the ground.
Following is a consolidated set of insights from the Mati Carbon team that spoke at or attended various LCAW sessions and private roundtables:
The adaptation finance gap is structural
The gap is not just large, it is growing. UNEP's 2025 Adaptation Gap Report puts developing-country needs at $310-365 billion a year by 2035. Actual flows sit around $26 billion, down from $28 billion the previous year. That is a shortfall of 12 to 14 times.
And it lands hardest on the people least responsible for emissions. Smallholder farmers grow about a third of the world's food and are among the most exposed to climate shocks, yet they see only a sliver of global climate finance, mostly slow, piecemeal grant money capped by public budgets.
This is where market-linked finance, done credibly, can help.
Financing adaptation requires multiple, complementary models
No single mechanism closes the gap. What is emerging is a layered structure:
- Results-based finance. Carbon markets and Payments for Ecosystem Services (PES) pay for verified outcomes. PES already moves around $36-42 billion a year (Forest Trends), though little of it reaches smallholders.
- Blended and catalytic capital. First-loss and concessional money pulls private investment into adaptation funds. Blended vehicles have mobilised over $180 billion across sectors, but adaptation is still under-served.
- Project and asset-level finance. Debt, equity and structured instruments built for resilient agriculture and land use.
So adaptation finance is not one market. It is a set of capital stacks that lock together.
Carbon markets as a bridge – From catalytic capital to scaled finance
When a mitigation activity also delivers adaptation benefits, carbon markets offer a way to scale past grants. Even with recent scrutiny, voluntary carbon markets still moved $3 billion between 2022 and 2024, and forward demand for high-quality removals could reach tens of millions of tonnes by 2030.
The sequence of capital is fairly clear:
a) Grants build early evidence and take the first risk;
b) Carbon revenue brings performance-linked cash flow; and
c) Private capital follows once measurement and verification hold up.
Unlocking this capital requires credible, investable evidence.
Why enhanced rock weathering sits on this fault line
Enhanced rock weathering (ERW) sits in an unusual spot here. Spread crushed silicate rock on farmland and you speed up a natural reaction that pulls CO₂ from the air and locks it into stable bicarbonates.
Current estimates put its technical potential at 2-4 GtCO₂ a year by 2050, which makes it one of the more scalable removal options.
But removal is only half the story. In the right settings, ERW can also:
a) Improve soil pH and nutrient availability;
b) Lift crop yields (early trials suggest 5-20% in some regions);
c) Boost farmer income and resilience, and
d) Reduce chemical pesticide and other farm input dependence.
That double function, removal plus resilience, is exactly what puts ERW at the centre of the adaptation-finance question.
ERW is not purely 'engineered' removal – it bridges nature and technology-based removals
ERW often gets filed under ‘engineered’ or 'tech-based' removal. That is not quite right.
Weathering is a natural process that has regulated Earth's carbon balance for millions of years. What we engineer is the speed – not the chemistry. And because it plays out across farmland, soils and local ecology, it is also firmly a nature-based approach.
That hybrid character matters, because the 'nature-based versus engineered' split still shapes funding pools, standards and policy. In practice the most scalable solutions, ERW included, will straddle that line.
Benefit sharing: standardise the principles, not the mechanism
Benefit sharing comes up constantly now, as scrutiny around equity grows. The key point: you cannot standardise the mechanism across methodologies.
ERW, agroforestry and mangrove restoration differ in their cost structures, in-kind benefits, value chain depth, risk profiles, and the time horizons over which benefits show up. ERW incentives may need to cover upfront labour and logistics; forestry ones may hinge on long-term stewardship. A single template across all of them fits none well.
What you can standardise are the principles: transparency, additionality of income, fair distribution of value and alignment with local institutions. The mechanisms themselves have to stay local and be designed with the communities involved.
Capital will not flow at scale to a model that cannot show value reaching the ground, so credible benefit sharing is itself part of the investable evidence the rest of the piece depends on.
Building the evidence base: from hypothesis to market-grade asset
There is no robust, standardised route for channelling carbon finance into adaptation yet. It needs evidence that holds up on two fronts: carbon removal integrity that is durable, measurable and verifiable, and adaptation outcomes that are demonstrated rather than assumed.
MRV costs for new removal pathways still run $5-30 a tonne, and bringing that down is critical. The adaptation benefits, steadier yields, smoother income and better soil health, need long-run, local data.
This is the work that turns a good story into a credible asset class.
Where do we go from here
We left LCAW 2026 more convinced of one thing: climate finance will be shaped less by any single instrument than by how well we connect them.
ERW is central to that, not only as a removal pathway but as a test of whether climate markets can deliver real economic resilience to the people most exposed to climate change.
That is why Mati is putting serious effort into the evidence base, working with leading research institutions. The next phase of climate finance will not be won on narrative. It will be won on proof.
If you work on adaptation finance, market design, MRV, or the policy that decides whether capital reaches farmers, we would love to talk.
