Climate finance roadmap: Achieving $1.3 trillion for vulnerable nations

The world has all the tools in hand to provide $1.3 trillion in climate finance to vulnerable nations, from debt relief to taxes and better coordination, according to a ‘The Baku to Belem — Roadmap to 1.3T’ released ahead of the COP30 summit in Brazil.

The 81-page report was released by the heads of last year’s COP29 conference in Azerbaijan and the upcoming COP30 gathering in Belem, Brazil, as global leaders prepare to meet in the Amazonian city this week.

Recommended For You

Dubai Police warn of accident on Emirates Road; traffic delays expected

UAE: Delayed learning, poor communication; signs your child may have vision impairment

ILT20: Desert Vipers overcome Abu Dhabi Knight Riders in thriller

UAE schools warn long winter break could lead to ‘learning regression’

India: Tourists among at least 25 killed in Goa nightclub fire

 

“This roadmap aims to contribute as catalyst and foundation for the next phase of climate action. It reminds us that the resources exist, the tools are ready, and the time is now,” COP29 President Mukhtar Babayev and COP30 Head Andre Correa do Lago said in the paper’s foreword.

COP29 in Baku set a bold goal for climate finance. The aim is to boost funding for developing countries to at least $1.3 trillion annually by 2035. The roadmap was not intended to be a formal agreement under the UN climate negotiations. Instead, the two COP presidencies took the initiative to design a plan for expanding climate finance.

The Belém summit will see if political will, financial reform, and private capital can work together to meet this challenge. To achieve $1.3 trillion climate finance target, global leaders will have to work together to change how global finance addresses climate priorities. And it will only be possible through public funding and private innovation.

“Scaling up climate finance has become a matter of necessity, not merely an enabler of ambition, as responding to climate change demands urgency, not incrementalism. The Roadmap is designed to serve as a basis and a force to accelerate implementation, transforming climate finance into a decisive instrument for securing a livable and just future,” as stated in the roadmap.

The landmark agreements reached at COP29 in Baku have generated important momentum in the global fight against climate change. The adoption of the “Baku Finance Goal”, aiming at turning billions into trillions, set the beginning of a new era of climate finance.

“By 2035 — the timeline of the Baku to Belém Roadmap to 1.3T — the global population may have reached 9 billion people. Cities will play an increasingly central role in human life, and technological transformations — including advances in artificial intelligence, quantum computing, and space technologies — are expected to shape how societies function and interact. At the same time, improvements in healthcare and food systems will enable longer and healthier lives. In this evolving context, mobilising $1.3 trillion annually to support climate action in developing countries is both essential and complex,” according to the roadmap.

Bridging climate finance gap

Industry specialists, experts and environmentalists opine that global leaders should unite to save the climate through serious policy actions and chalk out the plans to bridge the huge climate finance gap close to $ 1 trillion in next 10 years. 

In 2024, global losses from climate-related disasters reached $ 320 billion. At the same time, many vulnerable nations face rising debt and interest payments, limiting their fiscal space. The math is clear: without big changes to the financial system and better teamwork, climate finance will stay far behind climate risk.

At present, the gap between what’s available and what’s needed remains vast. In 2023, international climate finance for developing economies reached about $196 billion, based on Climate Policy Initiative data. This amount is less than one-sixth of what is needed by 2035 for global climate finance. OECD data shows that developed countries gave $115.9 billion in 2022. This met the old $100 billion target, but it highlights how much bigger the new goal is.

The limited data on existing flows further reveal potential imbalances across category distributions:

78 per cent of external climate finance is derived from public sources, mostly multilateral development banks and development finance institutions, while 22 per cent is derived from private sources, in particular commercial banks and corporations.

64 per cent is dedicated to mitigation, with 19 per cent to adaptation and 17 per cent to both mitigation and adaptation. The power sector attracted the most financing (27 per cent) for mitigation.

Regionally, over half of the flows were directed to developing countries in Latin America and the Caribbean (21 per cent), Sub-Saharan Africa (18 per cent) and Central Asia and Eastern Europe (17 per cent), with East Asia and the Pacific accounting for 13 per cent and Middle East and North Africa for 9 per cent. Least Developed Countries received 21 per cent of external flows and Small Island Developing States 5 per cent.

Since CMA 6, further trends have worsened the outlook. The OECD projects a 9 to 17 per cent drop in official development assistance (ODA) in 2025. This comes on top of a 9 per cent drop in 2024. The outlook beyond 2025 remains highly uncertain. This projected decline is driven by announced cuts by four major providers of ODA, with ODA projected to fall back to 2020 levels in 2027.

Notwithstanding these trends, needs continue to grow with projected ODA cuts impacting the poorest countries and vital services hardest.29 Volatile trade distortions also disrupt global supply chains and sustainable development opportunities for developing countries.

“We acknowledge that expectations regarding the Baku to Belém Roadmap to 1.3T are high. Across submissions, consultations, and exchanges, parties and stakeholders have consistently called for a solutions-oriented roadmap, opportunities for broad participation, and a strong sense of country ownership. We are honoured by the trust placed in us and sincerely hope the Roadmap meets those expectations — or at least provides steps toward clear and structured pathways to achieve the goal. We are grateful for the open communication, constructive dialogue, and willingness to engage,” Mukhtar Babayev and Andre Correa do Lago said in the paper’s foreword.

Turning climate finance into climate action

The Baku to Belém Roadmap, though not binding, is a technical manual for turning pledges into measurable flows. The report recognises that climate action needs more than just public funds or donations and the global leaders will have to invite private sector for real change through their valuable investment, encouraging carbon markets, and introducing multilateral reforms.

For carbon credit developers, investors, and policymakers, the coming year offers a pivotal moment. The 12-day COP30 summit can connect policy goals with financial action. It can reshape how global capital helps us reach a net-zero, climate-resilient future.

“Finally, we are aware that this journey begins in turbulent times, with scarce financial resources and difficult budgetary trade-offs. But technological and financial solutions exist. Communities and cities are acting. Families and workers are ready to roll up their sleeves and deliver more action. If resources are strategically redirected and deployed effectively — and if the international financial architecture is reset to fulfill its original purpose of ensuring decent prospects for life — the 1.3T goal will be an achievable global investment in our present and our future. We are optimistic,” Mukhtar Babayev and Andre Correa do Lago said.

The roadmap organises actions into five ‘Rs’:

• Replenishing: Grants and concessional finance

• Rebalancing: Debt and fiscal space

• Rechanneling: Mobilising private capital and lowering capital costs

• Revamping: Capacity and coordination

• Reshaping: Systems and structures for fair flows

“Communities and cities are acting. Families and workers are ready to roll up their sleeves and deliver more action. If resources are strategically redirected and deployed effectively — and if the international financial architecture is reset to fulfill its original purpose of ensuring decent prospects for life — the 1.3T goal will be an achievable global investment in our present and our future. We are optimistic.” said COP29 President Mukhtar Babayev and COP30 Head Andre Correa do Lago.

Muzaffar Rizvi

muzaffarrizvi@khaleejtimes.com

Muzaffar Rizvi is an accomplished financial journalist with more than 25 years of experience in the UAE and Pakistan. He has good writing skills, strong grip on production and an excellent news sense.