The conundrum of climate financing

This paper proposes some foundations for just climate financing, and asks why funds are still insufficient for climate adaption to tackle climate change.

Author

Overview

While the prevailing narrative on climate finance has long been one of insufficient resources, recent developments reveal there is money, yet it remains largely uncommitted to climate action. The world is struggling to raise adequate funds to integrate climate adaptation into development activities and mitigate emissions in hard-to-abate sectors.

This raises critical questions: why do nations readily mobilise vast sums of money for defence and military aid, witness substantial investments in the expansion of the global space economy, and how did they manage to respond to the Covid-19 pandemic with such speed and volume, yet falter in their efforts to raise sufficient resources to combat climate change?

This discussion paper intends to start a conversation by proposing some foundations for just climate financing. It asks what needs to change to help actors navigate the climate finance gridlock and presents some suggestions for ways we might move forward.

These issues are relevant for discussions in Addis Ababa and online at the fifth Africa Climate Talk, at the Global Solutions Summit in May, the Bonn Climate Change Conference, and then at COP 29 in Azerbaijan. Development Initiatives is working to improve the definitions and tracking of climate finance, but we know the scope of these issues is much wider, involving global financial architecture reform experts, researchers, climate negotiators and civil society organisations working on climate justice and global financial architecture reform.