Developing countries in limbo as rich nations delay new climate finance plans

Developing countries have been left in limbo by the failure of some of the world's biggest economies to flesh out their plans for new climate finance. Poor countries are supposed to receive $300bn a year from industrialized nations by 2035, along with about $1tn from other sources, to help them cope with extreme weather effects and transition to low-carbon futures.

This gap is damaging because it prevents recipient countries from planning and makes it harder for them to attract private sector investment to supplement public funds.

Analysis shows progress

Analysis by the NRDC and E3G thinktanks shows developed nations are broadly on track to meet the $300bn annual goal – known as the NCQG – set at Cop29 two years ago. By 2030, they should be providing about $229bn annually, with multilateral development banks contributing about $185bn of that.

Funding gap concerns

If the EU continues its current provision of about $36bn annually, and considering pledges from the UK, Canada and other smaller countries, there would remain a gap of about $7bn to fill. The US could potentially make up some of this shortfall under a different administration, along with Japan and Australia, which have yet to set climate finance goals.

Further analysis by Carbon Brief suggested that if countries failed to implement new climate finance after current targets expire, developing nations would face 70% cuts in bilateral finance from rich nations. Thwaites called this scenario highly unlikely, as most countries would likely announce new commitments soon.

Political implications

Climate finance is a contentious topic at the Cop31 talks in Antalya, Turkey, which are being presided over by Australia. Some developing countries wanted to reopen previous resolutions on climate finance, concerned about potential cuts. The World Bank retired its official climate finance target this summer under pressure from Trump's White House but will still provide tens of billions annually for climate projects.

France, Germany and Australia are among major countries yet to publicly state new climate finance goals. The UK cut its climate finance earlier this year. France's AFD aid agency maintained its ambition with targets of €6bn in climate finance annually for 2025-2027, while Japan stated it is 'fully committed' to fulfilling Paris Agreement obligations without announcing new pledges at present.

Thwaites emphasized that greater transparency would reassure the G77 group of developing countries: 'It's unfortunate that they have been quite silent on this. If they would talk about it more, it would reassure the G77.'