In a significant move ahead of the upcoming COP30 climate summit in Belém, Brazil, a coalition of finance ministers from 35 countries, with India among them, has put forward a comprehensive five-point strategy. This initiative aims to mobilize an impressive $1.3 trillion annually for climate finance, a critical step towards bridging the widening gap in funding climate action, particularly for developing nations.
The detailed recommendations, unveiled in Washington on October 15, focus on several key areas. These include increasing concessional finance, implementing reforms within multilateral development banks (MDBs), strengthening national capacities, attracting private sector investment, and enhancing regulatory frameworks specifically for climate finance.
These proposals emerge at a time when the financial needs for climate action are stark. Reports from the Independent High-Level Expert Group on Climate Finance highlight that developing countries will require an estimated $2.4 trillion per year by 2030 and $3.3 trillion by 2035 to achieve their climate goals. This represents a four to six-fold increase compared to current funding levels, with a substantial $1.3 trillion needing to come from external sources by 2035.
The adaptation financing gap is particularly concerning. Developing nations are projected to need between $215 billion and $387 billion annually for adaptation by 2030, yet current spending hovers around a mere $68 billion to $80 billion. National climate action plans (NDCs) from these countries estimate their total requirements through 2030 to be between $5.1 trillion and $6.8 trillion, or approximately $455 billion to $584 billion per year.
The report, aptly titled “Report of the COP30 Circle of Finance Ministers on the Baku to Belém Roadmap for 1.3T,” has garnered support from a wide array of finance ministers. Notably, this includes representatives from countries such as Azerbaijan, Barbados, Brazil, Canada, Chile, China, Colombia, Denmark, Egypt, Ethiopia, Fiji, France, Germany, Ghana, India, Indonesia, Italy, Kenya, Mexico, Morocco, the Netherlands, the Philippines, the Republic of Korea, the Republic of the Marshall Islands, Rwanda, Saudi Arabia, South Africa, Spain, Tanzania, Türkiye, the United Arab Emirates, Uganda, and the United Kingdom. However, it’s important to note that the European Union and Australia have not yet formally endorsed this ministerial statement.
The document itself acknowledges that its content is non-negotiated and may reflect diverse viewpoints, with not every participating country fully backing each specific recommendation. This initiative builds directly upon the outcomes of COP29 in Baku, where a target of mobilizing at least $300 billion annually by 2035 for developing countries was agreed upon, with developed nations expected to lead the effort. However, this target was met with criticism from developing nations, who deemed it insufficient and untimely.
Current global climate finance flows remain significantly misaligned with the actual needs. In 2023, only 43% of concessional climate finance was directed towards mitigation efforts, 34% supported adaptation, and 23% covered both. This leaves adaptation and resilience-building severely underfunded, despite their increasing urgency.
Multilateral Development Banks (MDBs) pledged $75 billion to developing countries in 2023, with expectations of reaching $120 billion post-COP29. They also aim to attract an additional $65 billion annually from the private sector by 2030. Nevertheless, the report strongly emphasizes that achieving global climate objectives necessitates a much greater level of ambition and the full implementation of the G20 Roadmap.
The participating ministers underscored the critical need to bolster domestic climate frameworks through country-led initiatives, such as voluntary country platforms. Enhancing the availability of climate data and refining risk assessment methodologies are also highlighted as crucial steps to effectively support the implementation of national adaptation plans.
These recommendations are poised to serve as a foundational document for the crucial finance negotiations scheduled to take place at COP30, which will be held in Belém, Brazil, from November 10th to 21st.
Key Resources for Climate Finance Discussions:
- Learn more about the Baku to Belém Roadmap for Climate Finance.
- Explore MDB commitments and reforms for climate action.
- Understand the adaptation financing gap and its implications.