By Andressa Lima (Federal University of Pará)
The Climate Finance Center for the Global South (CFC-GS) is dedicated to research and analysis on global climate finance, monitoring whether countries are fulfilling the commitments made at the Conferences of the Parties (COPs) of the United Nations Framework Convention on Climate Change (UNFCCC). Established in 1992 during the Earth Summit in Rio de Janeiro, the UNFCCC is the main international treaty addressing global climate change, setting guidelines for the reduction of greenhouse gas emissions and the financing of climate action, especially in developing countries.
To fulfill its mission, CFC-GS collects, systematizes, and analyzes data from sources such as the UNFCCC, the Organization for Economic Cooperation and Development (OECD), and other international organizations, evaluating financial flows, financing mechanisms, and the implementation of climate policies. Additionally, the center seeks to monitor how these resources are being distributed between developed and developing countries, analyzing gaps in climate finance and the effectiveness of strategies used to mobilize capital for adaptation and mitigation efforts.
The OECD1 report on climate finance from 2013 to 2022 highlights significant progress but also persistent challenges in the mobilization and distribution of resources. In 2022, developed countries finally met the USD 100 billion annual goal, mobilizing a total of USD 115.9 billion for climate action in developing countries. This milestone was achieved two years after the originally set deadline of 2020 and ahead of previous OECD projections, which estimated that the target would only be met by 2025. Despite progress in mobilizing resources, the report highlights ongoing challenges, such as a lack of transparency in fund allocation and inequality in distribution, which disproportionately disadvantage the most vulnerable countries, even though they are the most affected by climate change.
The report indicates that most of the public climate finance provided by developed countries was in the form of loans (69%), while grants accounted for only 28% of the total. Although Low-Income Countries (LICs) received a higher proportion of grants compared to middle-income countries, the total volume of financing allocated to them remains relatively low, accounting for only 10% of the total mobilized in 2022. Moreover, global climate finance continues to be dominated by loans, which can limit investment capacity in developing countries, particularly those already burdened by debt, making access to non-repayable resources even more critical for ensuring a sustainable transition. Despite this, resources allocated for climate adaptation have grown substantially, rising from USD 10.1 billion in 2016 to USD 32.4 billion in 2022. However, these figures remain below what is needed to meet the target set at COP26 in Glasgow (2021) to double adaptation finance by 2025, using 2019 as a baseline.
Beyond public climate finance growth, the report also highlights an increase in private sector financing, which rose by 52% between 2021 and 2022, reaching USD 21.9 billion. Most of this private capital was directed towards the energy sector, while Small Island Developing States (SIDS) and Low-Income Countries (LICs) faced greater challenges in attracting private investments due to structural barriers and financial risks. The report also underscores the key role of Multilateral Development Banks (MDBs), which have become the main providers of climate finance, significantly increasing their contributions over the past decade and helping diversify international financial flows. According to the report, multilateral finance attributed to developed countries grew from USD 15.7 billion in 2016 to USD 46.9 billion in 2022, a substantial increase primarily driven by MDB operations. This growth reflects the expansion of these institutions’ activities, solidifying their role as essential players in mobilizing resources for climate mitigation and adaptation.
Given this scenario, it is essential to ensure that developing countries have access to climate finance in a fair and stable manner. This requires increasing non-repayable funding for the most vulnerable countries, diversifying financing sources, and enhancing transparency in tracking multilateral financial flows. These measures are fundamental to ensuring that the commitments made under the UNFCCC are fulfilled and to strengthening global climate resilience.
In the future, CFC-GS plans to develop its own tools and methodologies, including climate finance trackers, which will enable monitoring of commitments made and their practical implementation, comparing mobilized resources to expected impacts. With this, the center aims not only to analyze funding flow patterns and challenges in resource allocation, but also to map opportunities and obstacles faced by Global South countries. In doing so, it will be able to provide strategic insights and evidence-based recommendations for governments, institutions, and civil society, helping to improve funding strategies and ensuring greater transparency and effectiveness in financial flows allocated to climate action.
- ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (OECD). Climate finance provided and mobilised by developed countries in 2013-2022. OECD Publishing, 2024. Available at: https://doi.org/10.1787/19150727-en. Accessed on: Feb. 25, 2024. ↩︎
