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Climate Finance: A Polarizing Issue at all COPs

  • Writer: Armelle Le Comte
    Armelle Le Comte
  • Sep 12
  • 3 min read
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For the past three decades, climate finance has been the defining fault line of the UN climate talks. The dispute is deceptively simple: poorer countries insist that the wealthy nations most responsible for historic emissions must pay to help them adapt and decarbonize, while richer states balk at open-ended financial commitments and want to broaden the number of donors (such as oil-rich countries).


The result has been a cycle of unmet promises, turning climate finance into both a test of trust and the main obstacle to genuine progress in global climate diplomacy.


In the meantime, global investments in renewable energy have increased massively, surpassing fossil fuel investment in many regions. In Southeast Asia for instance, clean energy now accounts for almost half of energy investment.


While adaptation has gained momentum in the past few years, due to the increasing number of extreme weather events, funding for adaptation needs remains hugely inadequate and relies almost entirely on public money. Private finance only represents about 10% of total adaptation finance. 


In 2024, the “Finance COP” delivered little


At COP29 in Azerbaijan, after heated debates, countries finally managed to agree on a new climate finance goal of US$300bn a year by 2035 to developing countries for climate action - with developed countries “taking the lead” and developing countries making contributions “on a voluntary basis”. This was not the case before when only rich countries were required to do so, which sparked criticism. Several countries also deemed the amount inadequate in light of the growing impacts of climate change in developing countries. 


At COP29, a larger target of $1.3 trillion a year by 2035 was also set up - known as the Baku to Belém roadmap - to scale up all sources of spending to combat climate change, including private investments. But many questions have been left unanswered about how this will be reached and calculated (grants, loans, bilateral, multilateral funds, private funds). 


At COP30, financial issues will remain front and centre


Among many other topics, climate finance will remain a major issue at COP30. 


First, there will be discussions on how developed countries will deliver on their US$300bn a year promise by 2035. 

  • Will they provide intermediate targets? 

  • Make the distinction between adaptation and mitigation, between grants and loans? 


The main topic will be the negotiations of the Baku to Belém Roadmap - a report detailing how to scale up climate finance and mobilise US$1.3 trillion a year from all sources (in addition to the agreed $300 billion of public finance annually by 2035). All countries have been invited this year to share their views on the roadmap. The draft Roadmap will be published on 27 October and launched at a high-level event during COP30. Negotiations are likely to be tense in Brazil. 


In its response, Singapore calls for concrete solutions to barriers faced by developing nations, including small islands, such as high capital costs and restrictive financing conditions. To achieve this scale, Singapore advocates for innovative financing tools - such as blended finance, transition credits, and carbon markets - while highlighting its own initiatives like the Singapore-Asia Taxonomy for Sustainable Finance, which sets clear criteria for green and transition activities.


The New York Climate Week which will take place from 21-28 September will present an opportunity for countries, civil society organisations, and the private sector to engage on this crucial issue.


Sources: 

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