Invest Now or Pay More Later: Waiting for El Niño Damage Could Double Protection Costs

UNDP estimates that a five per cent rise in food prices across developing economies could push 37 million people below the upper-middle-income poverty line in 2026 without policy intervention and action.

A potentially record-breaking El Niño in 2026/2027 could put food supplies, water access and household incomes under pressure across developing countries, making the timing of government support critical. A new United Nations Development Programme (UNDP) report estimates that protecting vulnerable households before the damage occurs could cost up to US$36 billion, compared with up to US$73 billion for a response after losses have occurred. Those estimates suggest early action could roughly halve the bill for protection and help families cope before their circumstances become harder to recover from.

The report, The Cost of Waiting in a Warmer World: Why Climate Investment Cannot Wait for the Next Disaster, connects the immediate El Niño threat with the wider consequences of delaying climate investment. Droughts, floods and extreme heat could disrupt food production, raise prices and damage the livelihoods that households depend on to cover their daily needs. UNDP estimates that a five per cent rise in food prices across developing economies could push 37 million people below the upper-middle-income poverty line in 2026 without policy intervention and action.

For families facing these pressures, access to support before a shock hits could make a substantial difference to their ability to afford essentials and protect their livelihoods. UNDP Administrator Alexander De Croo said warnings already provide an opportunity to protect millions of people and save billions of dollars through timely action. His message places food, clean water and secure livelihoods at the centre of a financing decision that governments and development partners face today.

Funding protection before households suffer losses

Making money available before droughts, floods or extreme heat cause widespread damage is central to the response described in the report. Early financing can help countries support vulnerable households and invest in the resilience needed to withstand future pressures, connecting immediate protection with longer-term development needs. UNDP presents the response to El Niño as a test of whether the international community can turn warnings into practical action before the human and economic costs grow.

Climate delays carry costs beyond El Niño

Modelling by UNDP and the Organisation for Economic Co-operation and Development puts the potential cost of climate inaction at as much as US$6 trillion in lost economic opportunities and climate-related damages. The report also finds that more ambitious national climate policies, combined with complementary development measures, could lift an additional 175 million people out of extreme poverty by 2050. Its findings make the case for investment across different timescales, from immediate measures that cushion households against shocks to longer-term efforts that strengthen resilience and expand economic opportunities.

Countries need financing to put climate plans into practice

With world leaders gathering this week in Antalya, Türkiye, UNDP is calling on governments, development banks, climate funds and businesses to accelerate investment in developing countries' climate and adaptation plans. The UN initiative Climate Promise: Forward, coordinated by UNDP with 30 UN entities, supports countries in delivering those plans and provides a basis for connecting national priorities with financing and implementation support. De Croo warned that climate change can deepen food and water insecurity, increase displacement, intensify competition over resources and compound existing fragility, making investment in resilience a decision with consequences for both household security and future development.