Climate Finance in Latin America
By Douglas Alencar (UFPA/CFC-GS) and Andressa Lima (UFPA/CFC-GS) In recent decades, climate finance has become a key element in addressing climate change, especially in the context of growing climate inequalities between countries in the Global North and South. For Latin America—a region highly vulnerable to the effects of climate change but with uneven response capacity—understanding how international climate resources have been distributed and applied is essential to assess the effectiveness of ecological transition policies. In this context, this article analyzes the cumulative volume of climate finance allocated to Latin American countries between 2016 and 2023, as well as its composition by type of intervention—adaptation, mitigation, or a combination of both. Source: Author’s elaboration based on OECD CRS – Climate-related Development Finance data. The chart above presents the total amount of climate finance received by Latin American countries between 2016 and 2023, measured in billions of U.S. dollars (USD). The visualization highlights the inequality in the distribution of these resources across the region. Brazil leads by a wide margin, having received approximately USD 18.78 billion during this period. It is followed by Colombia, with USD 14.23 billion, and Argentina, with USD 11.87 billion. In addition to these three countries, Mexico (USD 10.8 billion), Peru (USD 8.66 billion), and Ecuador (USD 7.27 billion) also rank among the main recipients. Other Latin American countries, such as Bolivia, Panama, Paraguay, and Honduras, received more modest amounts, ranging between USD 2 billion and USD 5 billion. At the lower end of the scale, countries like Nicaragua (USD 1.38 billion), El Salvador (USD 1.96 billion), Uruguay (USD 0.08 billion), and Venezuela (USD 0.05 billion) registered the smallest volumes of climate finance received during the period. Source: Author’s elaboration based on OECD CRS – Climate-related Development Finance data. The second chart presents the composition of climate finance received by Latin American countries between 2016 and 2023, disaggregated by type of intervention: adaptation, mitigation, and overlap (projects that simultaneously address both mitigation and adaptation). This distinction is important for understanding the priorities of national climate strategies in the region, as well as the allocation patterns of international funders. The general trend reveals that mitigation—focused on reducing greenhouse gas emissions—is the primary objective of climate finance. Brazil exemplifies this pattern, with USD 15.8 billion allocated exclusively to mitigation, the highest amount among all countries analyzed. Other countries that also received substantial amounts for mitigation include Mexico (USD 8.75 billion), Colombia (USD 11.79 billion), and Argentina (USD 8.11 billion). In contrast, the amounts allocated to adaptation—which seeks to strengthen the resilience of human and ecological systems to the impacts of climate change—are significantly lower in most countries. Colombia and Peru stand out for receiving more balanced amounts between adaptation and mitigation, indicating a more integrated approach. On the other hand, countries such as Brazil, Chile, and Mexico are heavily focused on mitigation, with adaptation receiving only a small fraction of the resources. The overlap category, although present, represents a less significant share of total resources in almost all countries. This suggests a still limited implementation of projects that integrate both mitigation and adaptation strategies, which may reflect both technical constraints and the way international climate finance mechanisms are designed. Given this scenario, it is clear that most climate finance directed to Latin America prioritizes mitigation efforts over adaptation strategies. While reducing greenhouse gas emissions remains a crucial goal to contain global warming, many scientists and environmentalists have warned that we may have already passed critical tipping points—the so-called “points of no return”—where the impacts of climate change become irreversible in some parts of the planet. In this context, limiting the damage already underway and protecting the most vulnerable populations becomes an equally urgent priority. An excessive focus on mitigation, without a balanced investment in robust adaptation measures, may deepen existing inequalities and leave Latin American countries and communities even more exposed to extreme weather events, biodiversity loss, food insecurity, and forced displacement. For this reason, it is essential to reassess the criteria guiding the allocation of international climate finance, increasingly prioritizing policies, projects, and infrastructure aimed at adaptation—especially in countries facing the greatest risks and with the least response capacity.
