Climate activists gathered at the Cop30 summit are intensifying their calls for substantial increases in climate finance, echoing a long-standing demand for wealthier nations to support vulnerable countries facing the climate crisis.
The $100bn Promise and the New $300bn Target
Sixteen years after the landmark Copenhagen climate summit, where developed nations pledged $100 billion annually by 2020 to help poorer countries reduce emissions and adapt to climate impacts, the goalposts have shifted significantly. Last year, countries established a new target of $300 billion per year by 2035.
According to analysis from the Organisation for Economic Co-operation and Development (OECD), rich nations eventually met the original $100bn threshold in 2022, committing $116 billion. However, charity Oxfam presents a more critical assessment, estimating the actual figure at just $95.3 billion that year, with the grant-equivalent value falling below $35 billion.
Where Does the Money Go and Who Receives It?
Tracking what genuinely qualifies as climate finance has become notoriously difficult, with some experts describing the system as a "wild west" of vague definitions and questionable accounting practices.
Public money constitutes more than three-quarters of the funding reaching developing nations for climate projects. This funding flows through both direct bilateral agreements and multilateral institutions like the World Bank.
An analysis by the Guardian and Carbon Brief reveals concerning distribution patterns. Approximately one-fifth of public funding in 2022 reached the world's 44 poorest nations, including climate-vulnerable countries like Tuvalu, Chad, and South Sudan. Meanwhile, a significantly larger portion went to broader developing nations, including middle-income countries such as India and China, and even petrostates like Saudi Arabia and the UAE.
The Loan Dilemma and Future Challenges
The structure of climate finance presents another major concern. Two-thirds of climate finance to developing countries comes as loans rather than grants, potentially exacerbating debt burdens in vulnerable economies.
While some loans are offered on concessional terms with favourable conditions, the majority provided in 2022 were non-concessional, carrying standard interest rates that can strain national budgets.
The new $300bn annual target forms part of a broader ambition to mobilise $1.3 trillion each year by 2035, with the bulk expected to come from private sector investment rather than public funds. This shift raises further transparency concerns, as private financing is typically less accountable than public money.
With climate finance remaining a contentious issue at UN climate negotiations, the Cop presidencies of Azerbaijan and Brazil have proposed innovative solutions in their Baku to Belém Roadmap. These include new taxes on the super-rich and fossil fuels, alongside debt-for-climate-action swaps to provide relief to cash-strapped governments.
