In 2009, wealthy nations pledged to mobilize $100 billion annually by 2020 to help developing countries mitigate and adapt to climate change. It was a landmark promise—one that symbolized global solidarity and responsibility. But more than a decade later, that promise remains underfunded, delayed, and structurally flawed.

Even when the $100 billion target was reportedly met in 2022, the number masked deeper issues: overstated contributions, loan-heavy financing, and a mismatch between what’s needed and what’s delivered. The truth is, climate finance isn’t just insufficient in quantity—it’s broken in design.

COP29: A New Target, Familiar Frustrations

At COP29 in Baku, negotiators agreed to a new global climate finance goal of $300 billion annually by 2035—triple the original pledge. While this was hailed as a breakthrough by some, many developing nations called it a “paltry sum” given the scale of the crisis.

The deal includes a mix of grants and loans, but lacks clarity on how much will be truly concessional. The Least Developed Countries Group expressed deep frustration, stating:

“We leave Baku without an ambitious climate finance goal… and without the comprehensive support desperately needed for adaptation and loss and damage”.

5 Reasons Climate Finance Still Falls Short

1. The Scale of the Crisis Has Outgrown the Pledge
   The new $300 billion goal is a step forward—but still far below the $2.4 trillion annually that developing countries need by 2030 to meet their climate and development goals. In 2023 alone, climate-related disasters caused $380 billion in damages globally.
2. Loans, Not Grants: A Debt Trap in Disguise
   Over 70% of reported climate finance is delivered as loans, many at market rates. France, Japan, and Spain are among the countries with the highest loan-based contributions. This model burdens already-indebted nations with more debt to survive a crisis they didn’t cause.
3. Adaptation Gets the Short End of the Stick
   Despite growing climate impacts, adaptation finance remains under 25% of total flows. At COP29, no binding commitments were made to correct this imbalance, even though adaptation is a lifeline for vulnerable communities.
4. Flawed Accounting and Lack of Transparency
   Many donor countries inflate contributions by counting the full value of loans or including projects with marginal climate benefits. There’s still no universal definition of what qualifies as “climate finance,” making accountability elusive.
5. Climate Finance Is Not Charity—It’s Justice
   The richest 1% emit more than twice as much carbon as the poorest 50% combined. Yet it’s the latter who face the brunt of rising seas, failed harvests, and deadly heatwaves. As Ani Dasgupta of WRI said:

“Climate finance is not charity. It is needed for the world to be in a better place.”

What Needs to Change

• Scale up ambition: Move beyond symbolic targets—align finance with actual needs.
• Shift from loans to grants: Especially for adaptation and loss and damage.
• Fix the rules: Standardize definitions, improve transparency, and ensure finance is new and additional.
• Center justice: Prioritize frontline communities, Indigenous peoples, and gender equity.
• Unlock private and innovative finance: But not as a substitute for public commitments.

References

• World Resources Institute – COP29 Outcomes
• Action Sustainability – COP29 Key Headlines
• BBC News – COP29 Takeaways