From Pledges to Progress: Climate Finance a Decade After Paris

Nearly a decade has passed since the Paris Agreement elevated finance to the heart of the climate agenda, embedding in Article 2.1(c) the ambitious goal of aligning global financial flows with low-emission, climate-resilient development. But for all the talk of “shifting the trillions,” we remain far from course. 

Despite efforts from governments, public development banks and the financial sector, the alignment of finance with climate objectives remains weak. If there was a widespread belief 10 years ago that there is enough capital globally to close the global investment gap, the past decade has shown that it is not so easy to redirect capital towards climate-friendly activities. The global climate finance gap is vast – $1.9 trillion was mobilised in 2023, yet at least $6.5 trillion annually will be needed by 2030. Emerging and developing economies, other than China, have been particularly shortchanged, receiving less than 15% of clean energy investments over the past decade.

The time has come to shift our perspective. COP30 in Belém must mark a turning point – not for new targets or political declarations, but for implementation and action. In a recent working paper, we define three priorities that can guide the way forward: national financing plans, domestic reform, and international system overhaul.

1. Transition Financing Plans: Countries Need a Blueprint, Not a Wish List

Many countries now know what investments are needed to achieve their climate goals. But few have articulated how they will finance them. The gap between ambition and execution hampers progress. The starting point is a national transition financing plan. These should clearly map out the climate investment needs linked to countries’ NDCs and long-term strategies; sectoral policy mixes to trigger those investments; options to bridge public financing gaps as well as the macroeconomic implications of the transition

Such plans require close coordination between finance and environment ministries, technical support from institutions like the World Bank or the NDC Partnership, and engagement with private and development finance actors from the outset.

A good financing plan also matches needs to the right types of capital. Projects with commercial returns may attract private investment. But adaptation, resilience, and nature-based solutions in vulnerable communities will require grants and concessional finance. Countries need help building those differentiated investment cases.

2. Unblock Private Capital and Use Public Resources Wisely

Even with a financing plan, many countries struggle to attract affordable capital. That’s where domestic reform becomes essential.

First, governments should reorient existing spending. This includes eliminating fossil fuel subsidies, improving the targeting of public support, and channeling resources toward climate-positive sectors.

Second, regulatory and financial market policies must be modernised to unlock private capital. Central banks and financial regulators can steer capital flows through prudential requirements that reward climate-aligned investment; climate-related disclosure mandates or investment taxonomies and green financial instruments

Done right, these tools will deepen local green finance markets and help mitigate financial risks from delayed climate action.

Domestic resource mobilisation, though politically difficult, must also be on the table. Carbon pricing, green taxes, and improved revenue collection systems are essential to increase public finance without overburdening debt levels.

3. Deliver on Promises, Rethink the System

Despite commitments, developed countries only met their $100 billion annual climate finance target in 2022 – two years late and far below what’s now required. The new collective quantified goal (NCQG) of $300 billion per year by 2035 is a step forward, and delivering on this promise is essential to restore trust and unlock further private capital.

In parallel, deep reforms of the international financial architecture are overdue. Multilateral development banks (MDBs) still provide the bulk of their finance as loans (67% to LMICs in 2019–2023), while grants make up less than 7%. They must evolve from conservative lenders into catalytic partners that provide greater volumes of concessional finance and non-debt instruments; tools for debt relief and restructuring as well as risk-sharing instruments to de-risk private investment in high-risk geographies.

Innovative financial instruments – like debt-for-climate swaps, solidarity levies, and ecosystem service payments – offer promising avenues for new resource flows. These must now be piloted and scaled.

What Can COP30 Do?

COP30, hosted by Brazil, arrives at a unique moment. With the NCQG set, the global stocktake behind us, and multiple country platforms (JETPs, CCDRs) launched, the time for new pledges is over. The ambition of the Brazilian Presidency for a “COP of Implementation” is much needed.

Here’s where progress can be made:

• Track implementation, not just commitments: Build accountability by monitoring delivery on transition plans and country platforms.
• Champion country examples: Highlight nations making real progress—regardless of size or income level—and support them in overcoming final barriers.
• Foster South-South cooperation: Countries can learn from each other’s financing strategies and pool resources to reduce cost and risk.

Climate finance cannot remain an abstract global goal; it must become a concrete national and local reality. To do that, countries must know their financing needs, match them to the right sources, reform their financial systems, and have access to support where needed. The tools are in place. Political momentum must now follow.