The first thing that struck me was the numbers. They were enormous. COP29 saw developed countries collectively commit 300 billion dollars under Article 9 [5]. In 2024 alone, 2 trillion dollars were invested in clean energy — 800 billion dollars more than in fossil fuels. Yet Jim Skea, Chair of the IPCC, reminded us that global mitigation flows still fall short by a factor of three to six, comparing what has been estimated to be needed and the actual fund pool. Adaptation needs are rising even faster: developing countries are estimated to require 310 billion dollars per year by 2025. At the same time, only around 2% of tracked private finance currently supports adaptation. The scale of action is growing, but so is the gap.
The gap doesn’t exist solely in the money; it also lies in the system behind it. We still do not have an agreed-upon definition of climate finance, and this lack of clarity filters through the entire landscape. Methodologies for evaluation differ, and reporting varies widely across countries. Multilateral Development Banks have unlocked greater lending headroom through capital adequacy reforms, yet, as Avinash Persaud, special adviser on climate change to the president of the Inter-American Development Bank, noted, “money is being left on the table.” Long approval timelines, mismatched priorities, and geographic imbalances slow down delivery at precisely the moment when speed matters most in the battle with climate change.
At the same time, private flows are largely opaque. Evidence shows that private investors are not ignoring climate risk, but with the current level of fragmentation and limited transparency, they do not interpret it consistently either. For example, in equity markets, ESG labels often fail to translate into real capital reallocation: funds marketed as “sustainable” can hold firms with strong disclosure practices but weak emissions performance simply because ratings diverge so widely [2]. Concerns about greenwashing, that is, firms overstating or exaggerating their environmental performance to appear more climate-aligned than they are, make this even harder for investors to distinguish genuine progress from marketing. Other innovative instruments, such as sovereign green bonds and catastrophe bonds, have seen increasing issuance. However, their effectiveness remains unclear: transparency is limited, payouts have been rare, and high transaction costs and opaque modelling still discourage broader use. [4] This lack of clarity also risks leaving emerging markets and developing countries unable to leverage these financial innovations for resilience and adaptation. [1]
The real challenge lies less in ambition and more in the underlying system. Climate finance continues to struggle to allocate funds efficiently where they are most needed. Public finance must set the direction; when the framework is transparent and consistent for all, private capital will follow at scale.
My main takeaway from COP30 is that progress depends on building a financial architecture that provides a predictable path for governments, investors, and communities. The next step is to create clear signals and well-aligned incentives so capital shifts effectively, before crises occur, not after. Once the structure improves, all other efforts—cultural, educational, and justice-focused— will also thrive together. After all, investing in climate resilience is not an act of charity; it is an investment in global prosperity, stability, social justice, human rights, and future economic development.
References:
[1] Ando, S., Fu, C., Roch, F. and Wiriadinata, U. (2022). Sovereign Climate Debt Instruments: An Overview of the Green and Catastrophe Bond Markets. IMF Staff Climate Note No. 2022/004. Washington, DC: International Monetary Fund. Available at: https://www.imf.org/en/-/media/files/publications/staff-climate-notes/2022/english/CLNEA2022004.pdf
[2] Berg, F., Kölbel, J.F. and Rigobon, R. (2022). Aggregate Confusion: The Divergence of ESG Rating. Review of Finance, 26(6), pp.1315–1344. doi:https://doi.org/10.1093/rof/rfac033.
[3] GCF Communication (2025). Fourteen new Country Platforms announced in collaboration with GCF to drive country-led climate solutions. [online] Green Climate Fund. Available at: https://www.greenclimate.fund/news/fourteen-new-country-platforms-announced-collaboration-gcf-drive-country-led-climate-solutions [Accessed 19 Nov. 2025].
[4] Reitmeier, L., Dookie, D. S. and Rözer, V. (2025). Financing the Unpredictable: What Role Could Sovereign Catastrophe Bonds Play in Disaster Risk Management? London: Centre for Economic Transition Expertise (CETEx), London School of Economics and Political Science. Available at: https://cetex.org/wp-content/uploads/2025/02/Financing-the-unpredicatable_sovereign-catastrophe-bonds_disaster-risk-management.pdf
[5] UNFCCC (2024). COP29 UN Climate Conference Agrees to Triple Finance to Developing Countries, Protecting Lives and Livelihoods. [online] Unfccc.int. Available at: https://unfccc.int/news/cop29-un-climate-conference-agrees-to-triple-finance-to-developing-countries-protecting-lives-and?utm_source=chatgpt.com.