International Climate Finance Goals: Where Are We, Where Do We Need to Be, and How Do We Get There?

What is the target? 

All actors in the global community will work to scale up climate finance to developing countries from public and private sources to at least $1.3 trillion per year by 2035. This aligns with expert assessments, such as those by the Independent High-Level Expert Group on Climate Finance (IHLEG), of the amount of international public and private finance that developing countries would need by 2035 toward their overall climate investment needs of $3.1 to $3.5 trillion annually. 

Where are we now? 

An entire cottage industry has developed to track climate finance flows mobilized by developed countries to meet the $100 billion goal. The $1.3 trillion goal has a far broader scope, and as a result, there is not yet specialized tracking of these flows.  

The best available data come from Climate Policy Initiative’s (CPI) Global Landscape of Climate Finance, which covers public, private, domestic, and international climate finance. It is possible to filter just international flows and exclude flows into advanced economies to give an estimate of international flows to developing countries, approximating the scope for the $1.3 trillion goal.  

The classification of “advanced economies” is broader than the U.N. Framework Convention on Climate Change (UNFCCC) definition of developed countries, so all data will be an underestimate of actual flows to developing countries.  

Data from CPI’s reports are available up to 2023, which saw a 37 percent increase in international climate finance to developing countries, reaching $196 billion (see figure 2). The compound annual growth rate between 2017 (the earliest available year of breakdowns of flows by source) and 2023 was 16 percent. While CPI provides the most comprehensive overview of global climate finance flows, there remain gaps in data availability, especially for private finance and adaptation; an additional reason why these figures are likely an underestimate of actual flows. 

Where do we need to be, and how do we get there? 

A straight-line trajectory from 2023 levels to $1.3 trillion by 2035 would require international climate finance rising to $840 billion in 2030 (see figure 2). Plotting a straight line from 2017 to 2023 and continuing this forward would result in just $427 billion in 2035, less than one-third of the goal. But if the 2017–2023 compound annual growth rate of 16 percent continues, climate finance would reach $1.17 trillion in 2035, still below the goal but much closer. A 17 percent average annual growth would be needed to hit $1.3 trillion. 

Whether such growth rates can be maintained as the overall scale of climate finance grows is a key question. After three years of double-digit growth in global climate finance, CPI’s preliminary estimate is that growth slowed to 6.5 percent in 2024 due to a mix of factors, including high interest rates, lower GDP growth, and falling fossil gas prices. However, much of the slowdown appears to be in developed countries, with the fastest rates of growth in developing countries such as Brazil, Indonesia, and Vietnam, which is encouraging for the $1.3 trillion goal. 

There are other potential positive signs. Recent research from the Net Zero Industrial Policy Lab at Johns Hopkins University found that Chinese overseas investment in green manufacturing has surged to at least $227 billion since 2022, with more than three-quarters going to developing countries. Most of this investment was not captured in CPI’s tracking, which only has $7 billion in Chinese international climate finance flows in 2023, so it represents a significant boost to climate finance that could count toward the $1.3 trillion. 

This highlights the need for better data collection. CPI data are likely to remain the best starting point, but it could be useful to develop systematic tracking for the $1.3 trillion goal. 

Beyond the headline numbers, it is important to pay attention to the composition of the finance, especially in supporting different types of climate action. The majority of tracked climate finance is for mitigation; international public and private adaptation finance to developing countries was $36 billion in 2023, just 18 percent of the total. Compare this to the IHLEG finding that developing countries need to invest $300 to $400 billion annually by 2035; even if domestic funding can meet some of this, current international adaptation finance is far below what is needed. 

The NCQG decision mandated the presidencies of COP29 and COP30, Azerbaijan and Brazil, to produce a “Baku to Belém Roadmap to $1.3T” to look at how to scale up climate finance to developing countries. This report will be released shortly before COP30 and can help identify actions to reach the goal by governments, international institutions, private sector actors, local communities, and civil society. At this year’s conference, governments will need to consider how best to ensure the report recommendations are put into action.  

What is the target? 

Developed countries agreed to take the lead in mobilizing at least $300 billion per year by 2035. This goal has a similar scope to the $100 billion–per–year goal: public funds; private finance mobilized by the public sector; and alternative sources. But the new goal also allows developing countries to voluntarily count finance they provide toward the goal, and there was a voluntary agreement that all multilateral development bank (MDB) climate finance to developing countries can count, rather than just the share attributable to developed countries under the $100 billion goal. 

Where are we now? 

Data on the $300 billion goal are a lot more well developed, since they are similar in scope to the $100 billion goal for 2020–2025. The Organisation for Economic Co-operation and Development (OECD) has done regular tracking on progress towards the $100 billion goal, compiling reporting from various sources, including its own development cooperation database that its member countries report to and reporting from multilateral financial institutions, then conducts verification and adjustments to avoid double counting. Comprehensive data are only available from the OECD up to 2022: public climate finance provided by developed countries and private finance mobilized by these public interventions reached $115.9 billion (see figure 3). 

There is not yet full reporting for 2023 and 2024. Raw OECD data suggest that climate finance continued to grow in 2023. Official development assistance (ODA) fell 7.1 percent in 2024, and this led some analysts to speculate that these aid cuts will translate into drops in climate finance in 2024. However, this is unlikely for two key reasons.  

First, many developed countries have committed to protecting climate finance spending within their remaining ODA budgets. Indeed, figures from the European Union show that the collective climate finance contribution of its member states was €31.7 billion ($36.7 billion) in 2024, a €3.2 billion ($3.7 billion) increase from 2022 levels. Meanwhile, the United States reported that it delivered on its $11 billion climate finance goal in fiscal year (FY) 2024, up from $5.8 billion in FY22. 

Second, MDBs have continued to make significant increases in their climate finance after undertaking a wide-ranging set of reforms to raise new resources and use their existing capital more effectively; they reported that their total climate finance to developing countries rose from $66.1 billion in 2022 to $88.3 billion in 2023. Summary data show that MDBs continued to increase their climate finance in 2024, as the benefits of their reform processes continue to play out. 

This means that even if some countries did scale back their bilateral climate finance, growth from elsewhere in the system was likely to more than offset this, ensuring that climate finance continued to exceed $100 billion in 2023 and 2024. 

Where do we need to be, and how do we get there? 

To reach $300 billion in 2035 on a straight-line trajectory from the $115.9 billion in 2022 would require climate finance to be $229 billion in 2030 (see figure 3). Plotting a straight line from 2016 to 2022 and continuing this forward would result in $240 billion in 2035. If the average annual growth of 12 percent between 2016 and 2022 continues, climate finance would reach $288 billion in 2030 and $510 billion in 2035. By comparison, to reach $300 billion by 2035 requires an average of 8 percent annual growth. 

A target of $500 billion is broadly in line with some of the scenarios that NRDC, ODI Global, ECCO, and Germanwatch published last year ahead of the NCQG negotiations. Ultimately, governments agreed to a lower goal of $300 billion per year, and in the current political environment, continuing to grow international public climate finance at 8 percent—let alone 12 percent per year—seems challenging. 

The Trump administration has sought to cancel and rescind all U.S. international climate finance, representing a loss of around $11 billion per year in climate finance compared to 2024 levels. Broader cuts to U.S. ODA are projected to be $23.4 billion in 2025. Other developed countries are also cutting their ODA, with the next 16 largest donors projected to cut ODA by $7.7 billion this year. Combined, ODA cuts in 2025 are projected to be 17 percent from 2024 levels. A key question will be how many countries ring-fence climate finance budgets, despite broader aid cuts. 

With bilateral funding in turmoil, MDBs have the potential to be a pillar of stability and growth. At COP29 in 2024, MDBs announced that they expect their collective public climate finance to rise to $120 billion in 2030, and that they aim to mobilize a further $65 billion in private finance with this. If they keep to this commitment, MDBs will be delivering $185 billion in 2030, as shown in figure 3. 

This leaves a gap of $44 billion to the $229 billion required in 2030 to be on the straight-line trajectory to $300 billion in 2035. In 2022, non-MDB climate finance (bilaterals, multilateral climate funds, and private finance mobilized by bilaterals) from developed countries was $56.3 billion. The upshot of this is that if MDBs stick to their projections and bilateral climate finance cuts do not exceed $12 billion from 2022 levels, we will still be on track. 

Beyond 2030, things are highly uncertain. To provide reassurance, developed countries should announce new multi-annual climate finance goals; prospective new contributor countries that are encouraged to step up by the NCQG decision could provide information on their intentions and begin using the Paris Agreement transparency framework to report on their efforts; and MDBs should provide regular updates on their progress to their 2030 projections. 

As with the $1.3 trillion goal, the composition of the $300 billion goal is also important. Under the $100 billion goal, 65 percent of finance has gone to mitigation, leaving adaptation underfunded. This is why a new adaptation finance goal, to replace the current doubling goal that expires in 2025, is important to bring better balance. Ensuring that the financial instruments and their level of concessionality match the needs of projects and communities is also vital for effective climate finance. A particular issue with the likely future—where MDB finance continues to grow while bilateral finance stagnates—is that bilaterals have historically provided a higher share of grant finance than MDBs, so the overall share of grant-based finance would fall. This is why it is so important for rich countries to step up with new concessional finance commitments.  

What is the target? 

Governments agreed to pursue efforts to at least triple the annual outflows from UNFCCC climate funds from 2022 levels, by 2030. There are six UNFCCC climate funds: the Global Environment Facility (GEF), the Green Climate Fund (GCF), the Fund for Responding to Loss and Damage (FRLD), the Adaptation Fund (AF), the Least Developed Countries Fund (LDCF), and the Special Climate Change Fund (SCCF). According to the UNFCCC’s reporting, outflows from these funds amounted to $1.74 billion in 2022, meaning the goal is at least $5.2 billion per year by 2030.  

Where are we now? 

For the purposes of tracking this goal, as with other analyses, we use the amount of finance approved each year by U.N. climate fund boards as the metric. The goal could also be measured as disbursements to project implementers, but the data for this are less widely and consistently available. 

NRDC uses data from Climate Funds Update (CFU). Run by Heinrich Böll Foundation and ODI, CFU is the main source of multilateral climate fund data used by the UNFCCC’s Biennial Assessment and Overview of Climate Finance Flows (BA) report series. There are minor discrepancies between CFU and BA figures, but CFU is the more complete dataset, with full data on fund approvals through to 2024 (see figure 4). 

Even the quickest glance at the data shows that 2022 was the least ambitious recent baseline year to choose, with CFU data putting fund approvals at just $1.88 billion—which is slightly higher than the BA data for 2022 of $1.74 billion—for a tripling target of $5.6 billion. Negotiators probably picked it because 2022 was the latest year for which data were available at the time, but using 2021 would have meant the goal was more than $10 billion per year, nearly double the actual target. Details matter!

Where do we need to be, and how do we get there? 

Figure 4 shows the straight-line trajectory from the $1.9 billion in 2022 to reach $5.6 billion in 2030. Plotting a straight line from 2016 to 2024 and continuing this forward would result in just $3.8 billion in 2030. If the average annual growth of 8.6 percent seen between 2016 and 2024 continues, U.N. climate fund approvals would reach $4.6 billion in 2030, still below the goal. 

Since 2022, there has been good growth, with fund approvals rising to $2.8 billion in 2024, on track with a straight-line trajectory to $5.6 billion in 2030. However, most of the growth has come from the GCF, and the other funds have all seen approvals decline since 2022. This raises the question of whether the tripling goal is individual for each fund or collective. Individual tripling would help ensure that each fund grows proportionately. Collective tripling is arguably easier but does not guarantee that all funds will increase outflows. The consensus appears to be that it should be a collective tripling if only for one key reason: The sixth and newest U.N. climate fund, the FRLD, was only created in 2023, so it had no outflows in 2022 to triple. If the tripling goal is for individual funds, the FRLD’s goal would be $0. Even if it is a collective goal, it will be important to ensure that all funds benefit from the political impetus to scale up outflows. 

There is no comprehensive data for 2025, since most funds have a further board meeting this year where more projects will likely be approved. The GCF has already approved $1.93 billion for projects in 2025 and has a further $1.39 billion in projects that are up for consideration at its late October board meeting. This would mean that GCF likely approvals of $3.3 billion in 2025 will exceed 2024 outflows from all U.N. climate funds by half a billion dollars. When taking account of other fund approvals, 2025 will probably break the record for U.N. climate fund outflows. 

This is surprisingly positive news at a time when other flows of international public finance are under increasing strain. But in addition to the fact that most growth is occurring in one fund, a further word of caution is needed. As figure 4 clearly shows, climate fund outflows have pronounced peaks and troughs. This is due in large part to the four-year replenishment cycles of the biggest funds, the GEF and GCF. In the years following a replenishment (2018 and 2022 for the GEF; 2019 and 2023 for the GCF), outflows are large but then shrink as funds run low on resources ahead of their next replenishment. It would not be a major surprise if we see drops in funding approvals as we approach future replenishments of the GEF (2026, 2030) and the GCF (2027). The GCF’s replenishment, as the largest of the U.N. climate funds, is well timed to give outflows a big boost in time for the 2030 goal deadline; that is, if donors are generous in their replenishment. And as we have seen with recent aid cuts, that is a big if. Some new pledges to these funds are expected at COP30, and NRDC has a Climate Funds Pledge Tracker that is updated on a rolling basis. 

One way of increasing outflows without donor inflows growing in lockstep would be to increase the use of guarantees, since a fund can extend guarantees without needing to keep the full value in reserve capital, and it does not have to pay out unless the project fails. Some funds are also exploring issuing bonds to raise capital, much like MDBs do. At a time of constrained public budgets, these ideas are worth exploring. However, the boards of the funds must be vigilant that these approaches do not cause the institutions to become more risk averse and lose focus on their original mandates: to use their primarily grant-based capital to support the innovative projects and vulnerable communities that other financial entities were not willing or able to do. Therefore, the need for grant inflows to these funds will remain. This does not only need to come from traditional budgetary sources; some funds can accept private donations, and some are exploring channeling the proceeds from solidarity levies. 

When negotiators finalized the NCQG in November 2024, it was unlikely that any of them realized quite how severe the geopolitical headwinds to climate cooperation would become in 2025. Yet, looking at the available data and current trends, all three of the NCQG’s quantified goals remain achievable with commitment and cooperation from governments, international institutions, and the private sector to scale up finance and reform systems to make climate finance more effective. We also need better and more frequent data tracking to be able to assess progress and, if necessary, make adjustments to keep things on track. 

It might be tempting for leaders to put climate finance on the back burner for other, seemingly more pressing issues. But this funding is a strategic investment to better manage the impacts of a warming world, which is already exacerbating many of the issues that are front of mind for today’s leaders: cost of living, supply chain disruptions, extreme weather disasters, forced migration, and conflict. Climate investment is at the core of building a more stable and prosperous world.