COP30: Climate finance outcome a mixed bag at best

Hours before the end of the conference, there was still talk of a possible failure of COP30 due to irreconcilable differences on the question of the next steps toward a global phase-out of fossil fuels. © UN Climate Change | Kiara Worth

No one can be satisfied with the outcome of COP30. The world will have to wait for an globally equitable phase-out of fossil fuels, global warming will not be limited to 1.5°C for the time being, and the results on climate finance are anything but ambitious.

Also after COP30, the world remains on track for up to 2.8°C of catastrophic warming. Weak climate targets contained in countries’ Natiopnally Determined Contributions (NDCs) under the Paris Agreemenbt will not be revised, and no mandate was adopted for a global roadmap for phasing out fossil fuels under the Paris Agreement, even though the Brazilian COP30 presidency will now take the initiative and continue working on this issue with interested countries. On climate finance, decisions were taken and a new target was set – but on substance, also the outcome on climate finance are a mixed bag at best.

Tripling adaptation finance

A prominent outcome of COP30 is the agreed target to triple annual support for climate change adaptation in low-income countries by 2035. This target builds on the previous target (agreed at COP26 in Glasgow) of doubling financial assistance from around US$20 billion (2019) to around US$40 billion by 2025. However, no reference year was agreed against which the tripling will happen. Low-income countries had called for 2025 to be used as the base year, but developed countries opposed this, arguing that no figures were yet available for 2025. This means that it remains unclear fpr now, what the tripling will result in. In addition, the tripling is not to take place until 2035; low-income countries had called for this to happen as early as 2030. In any case, available funds will remain well below the needs of low-income countries: the United Nations Environment Programme estimates the cost of adaptation in the Global South at USD 310-365 billion per year.

Note that the new target does not involve new money. Last year, COP29 had already adopted the new, overarching global climate finance target (New Collective Quantified Goal, NCQG), according to which total annual climate finance is to grow to at least US$300 billion by 2035. This also represents a nominal tripling of the previous target of $100 billion for the years 2020-2025. The outcome of Belém therefore merely ensures that the share of adaptation fiannce (2022: 28%) in overall climate finance will not deteriorate over the next decade. Developed countries therefore seem to remain unwilling to ensure the balance between adaptation finance and mitigation finance that was already agreed in the Paris Agreement.

The agreement to triple adaptation finance was also explicitly placed in the context of the NCQG. This signals that developed countries plan to achieve the tripling largely through private investment – which tends concentrate in profitable markets. This means that people living in poverty in particularly vulnerable and low-income countries will largely be left out, especially in critical sectors such as food security and protection against severe weather events. Furthermore, unlike with the Glasgow doubling target, developed countries no longer see themselves as solely responsible for the tripling, but merely want to take the lead – as they enshrined it in last years’s NCQG decision on overall cliamtre finance.

Article 9.1: Developed countries’ financial obligation

With the rather disappointing outcome for developing countries on the new global goal for climate finance at COP29, calls had popped up early in 2025 to negotiate separately on the implementation of the financial obligation of developed countries contained in Article 9.1 of the Paris Agreement – much to these countries’ annoyance. There is plenty of reason to discuss this issue, because on the one hand, the Paris Agreement only formulates a principled obligation without further details and with a lot of room for interpretation. Developed countries know how to take advantage of this, for example when they report loans that are profitable for themselves as financial support. On the other hand, the International Court of Justice recently expressed (in an advisory opinion) it’s view that the provision of climate finance is not only binding in principle, but must also be appropriate in nature and scope to enable the implementation of the Paris Agreement – and it is well known that the support provided to date falls far short of the needs of low-income countries.

There was already no movement on this issue at the interim conference in Bonn that prepared COP30. The COP30 outcome now provides for a two-year work program on climate finance in general, with an explicit reference to Article 9.1, but only in connection with Article 9 as a whole. It is uncertain whether this work program will achieve much beyond a detailed report; Belém may have simply postponed the issue for two years full of debate, putting the issue back on the agenda at COP32 (in Ethiopia).

Uncertain times for multilateral climate funds

For the various multilateral climate funds, the COP30 outcome is rather disappointing. Very few pledges have been made to these funds. Not a single pledge was made for the Least Developed Countries Fund (LDCF), which supports the poorest countries in adapting to climate change. This creates considerable problems, as the fund’s resources are largely exhausted – without new money, the fund will not be able to continue its work. As for Germany, the government has earmarked 10 million euros in the 2025 budget of the Ministry of Development, but this will not allow for much, and there will be no more money from Germany in 2026.

A combined total of around US$40 million in new pledges was raised for the Fund for Responding to Loss and Damage (FRLD). This means that the relatively new fund now has around US$820 million at its disposal (including US$100 million from Germany) to support low-income countries in coping with unavoidable damage and losses. At COP30, the fund symbolically launched its first call for project proposals—an important first step, but the total amounts managed by this fund are orders of magnitude smaller than the annual costs of losses and damages resulting from climate change in developing countries.

The Adaptation Fund has managed to raise US$133 million (including €60 million from Germany) – but, as was the case last year, this fell short of the target of at least US$300 million in new pledges as rich countries are holding back on their pledges. Like the LDCF, the Adaptation Fund is threatened with drying up. In addition, COP30 failed to make the necessary arrangements to institutionally anchor the fund under the Paris Agreement. This step would be necessary for the fund to benefit from planned levies on emission allowances under Article 6 of the Paris Agreement as an additional source of income.

In contrast, around US$6.3 billion were pledged for the new Tropical Forests Forever Facility (TFFF). Public capital and private funds are to be pooled in the facility and invested primarily in the bond markets of emerging economies. The returns generated will be distributed first to private and then to public investors, with the remaining surplus being paid out to low-income countries for forest conservation. Anders als (zumeist) bei den klassischen Fonds sind die gemachten Zusagen an die TFFF keine Zuschüsse, sondern kommen in Form von Krediten oder Eigenkapital daher – so auch die Milliarde aus Deutschland, die noch rechtzeitig vor Ende der COP30 kam, nachdem der Bundeskanzler Friedrich Merz sich in seiner Rede auf dem Gipfel in Belém noch vor einem konkreten Betrag herumgedrückt hatte. Ob die TFFF zu einer Erfolgsstory wird, muss sich noch herausstellen – Kritik gibt es genug, sowohl was die Wirtschaftlichkeit des Konzeptes angeht als auch die Nachhaltigkeit. Außerdem: Den Waldschutz finanzieren letztlich die Entwicklungsländer selbst, über die Zinsen, die sie auf ihre Anleihen zahlen müssen.

Unlike many traditional funds, pledges made to the TFFF are not public grants, but will come in the form of loans or equity capital – including one billion euros from Germany, which were pledged just in time before the end of COP30 (after Chancellor Friedrich Merz had initially avoided committing to a specific amount in his speech at the summit in Belém. Whether the TFFF will be a success story remains to be seen – there is plenty of criticism, both in terms of the economic viability of the concept and its sustainability. Also, activities in countries will ultimately be paid for by developing countries, through the interest they have to pay on their bonds, rather than by countries investing in the TFFF htrough their pledges.

The Baku to Belém Roadmap to 1.3T: Run into a dead end? 

The CO29 decision adopting the new global climate finance goal (New Collective Quantified Goal, NCQG) also tasked the Brazilian and the Azerbaijani presidencies with developing a roadmap for increasing total mobilised finance to developing countries to US$1.3 trillion per year by 2035. This Baku to Belém Roadmap to 1.3T was intended to build confidence in the (rather weak) outcome achieved at COP29. The roadmap was presented in Belém, with COP30 ultimately only taking note of it, without any further substantive engagement. The hope that the roadmap could lead to a process to advance the implementation of the NCQG has not been fulfilled. The implementation of the NCQG is now merely to be considered at the ministerial level in a one-off event that does not even have a date yet and without any details on the mandate, goal, or hoped-for outcome.

Outlook for 2026: Will developed countries announce climate finance plans for the period up to 2030?

At COp30, developed countries successfully sidestepped an important issue – that of their planned levels of climate finance for the period beyond 2025. Most developed countries have made at least vague commitments on how they will contribute to the current $100 billion target during 2020-2025 – including Germany’s (unlikely-to-be-kept) promise to increase budget resources for climate finance to six billion Euros per year by 2025. The timeframe for most of these commitments by develoepd countries ends in 2025, which raises the question of how they intend to shape their respective contributions to the NCQG. This would require new commitments for the period after 2025, perhaps with a time horizon until 2030.

Auf der COP30 blieb diese Frage noch einigermaßen unter dem Radar. Bis zur COP31 im türkischen Antalya dürfte sie aber neuen Schwung bekommen und könnte über Erfolg oder Fehlschlag der Konferenz im nächsten Jahr mitentscheiden. Der politische Wille, mit neuen Zusagen auch eine Steigerung der Mittel im Sinne des NCQGs (und seines $300-Milliarden-Ziels) zu ermöglichen, ist in den meisten Ländern, inklusive Deutschland, derzeit allerdings nicht zu erkennen. Am fehlenden Geld liegt es nur vordergründig, denn Deutschland beispielsweise ist weiterhin ein im globalen Maßstab sensationell reiches Land – der Reichtum ist nur extrem ungleich verteilt. Mit geeigneten Vermögenssteuern etwa ließen sich die Reichen und Superreichen stärker in die Verantwortung nehmen, um angemessen finanziell zum Gemeinwohl beizutragen, einschließlich über die Klimafinanzierung als öffentliche Investition in globale Stabilität.

This issue remained somewhat under the radar at COP30. However, it is likely to gain momentum in the run-up to COP31 in Antalya, Turkey, and could be a deciding factor in the success or failure of next year’s conference. However, there is currently visible political will in most countries, including Germany, to make new commitments that would lead to an increase in funding in line with the NCQG and its $300 billion target. Scarcity in the budget is usually merely a pretext. Germany, for example, is a sensationally rich country if compared on a global scale, but the existing wealth remains extremely unevenly distributed. With appropriate wealth taxes, for example, the rich and super-rich could be made to take greater responsibility for contributing financially to the common good, including through climate finance as a public investment in global stability.

Jan Kowalzig, Oxfam