The global commitment to climate finance has taken a significant leap forward with the USD 300 billion annual target set at COP29. This marks an essential step towards addressing the substantial gap in climate funding. As nations prepare for the next round of Nationally Determined Contributions (NDCs) in 2025, there is a crucial opportunity to enhance collaboration and scale up financing from both public and private sectors.
Achieving this ambitious goal necessitates a comprehensive improvement in the quality, transparency, and scope of country-level climate targets. Currently, while climate finance has surged to USD 1.46 trillion in 2022, it remains far below the estimated annual requirement of USD 7.4 trillion needed globally through 2030. Emerging markets and developing economies (EMDEs), which are particularly vulnerable to climate impacts despite their minimal contribution to global emissions, require substantial international support. For instance, Africa, one of the most climate-vulnerable regions, faces annual losses of 10-15% of its GDP due to climate change, yet only receives 23% of the funds needed to implement its NDCs.
The New Collective Quantified Goal on Climate Finance (NCQG) established at COP29 sets a new milestone for developed countries to mobilize USD 300 billion annually by 2035 for climate action in developing nations. This represents a threefold increase from the previous target set at COP15 in 2009. However, achieving this will require unlocking additional capital pools and enhancing international cooperation. The upcoming updates to NDCs in 2025 provide a pivotal moment for countries to raise their ambitions and signal the necessary investment levels to meet national climate goals.
To strengthen country-level climate finance targets, several recommendations have been proposed. Firstly, improving alignment across NDCs by developing standardized methodologies can ensure transparent and Paris-aligned climate targets. Encouraging public-private collaboration in the design and revision of NDCs can also foster collective climate action and build investor confidence. Moreover, increasing international capacity-building support for EMDEs can help them make accurate projections and improve their ability to address climate challenges. Lastly, establishing robust accountability frameworks will track progress and promote greater transparency in achieving climate targets.
Moving forward, closing the climate finance gap will require concerted efforts from all sources—domestic and international, public and private. The focus must now shift to delivering meaningful actions that drive global climate resilience. By working together, we can create a sustainable future where every nation contributes to mitigating climate change and building a resilient world for future generations.