Beyond Baku & Belem
THE UN climate conference (COP29) in Baku last year was credited with several achievements. It resolved the lingering issue of voluntary carbon credit trading systems between countries for reaching their emission reduction targets as set out in Article 6 of the Paris Agreement. It operationalised the Loss and Damage Fund. Importantly, it agreed on a new financial goal for assisting developing countries.
In the two-layered arrangement of the ‘new collective quantified goal’, developed countries pledged to mobilise at least $300 billion annually by 2035. Recognising that the need for climate finance in developing countries far exceeds this amount, the second layer of the goal aims to raise $1.3 trillion by 2035 from all other sources. To chalk out a strategy and develop a step-by-step approach to realise the finance goals, COP29 also agreed on the Baku-to-Belem roadmap.
Mobilising such huge amounts was never going to be easy at a time when climate change continues to outpace climate action by leaps and bounds. In the months since Baku, environmental disasters have grown in ferocity and frequency, impeding long-term economic growth and exacerbating poverty and inequality. Each flood, heatwave, wildfire or drought brings disaster, reverses developmental gains and raises relief and reconstruction costs.
The challenge is compounded by geopolitical problems and conflicts. When countries augment their defence budgets, it often translates into slashing development funds. Climate and environmental agenda get relegated down the priority list. Last month, the UN reported that global military spending reached a record $2.7tr in 2024, the highest annual rise since the Cold War. Going by this trend, spending could climb as high as $6.6tr by 2035.
There are both challenges and opportunities.
Meanwhile, climate finance has struggled to keep pace with the impact of global warming, notwithstanding the pledges at Baku. With the next climate conference, COP30 in Brazil just weeks away, a quick check is in order to see if the world is living by its promises made in Baku.
To their credit, some major multilateral climate financing mechanisms have performed better than in previous years, raising and disbursing substantial amounts. The Green Climate Fund leads with a total portfolio of $66bn including co-financing. It has committed $18bn to projects mostly in the least developing countries of Asia and Africa.
The Adaptation Fund’s $2.01bn and the Global Environment Facility’s $24.33bn are part of the pool. The Loss and Damage Fund, still in its infancy, has received pledges amounting to $0.79bn. To complement, the World Bank raised its contribution to $31bn last year for financing that had climate co-benefits, up from $29.4bn for the previous financial year.
Regional development banks also chipped in with impressive shares. ADB committed $12.3bn in climate finance in 2024. Sixty per cent, or $7.4bn, was earmarked for climate change mitigation and the remaining $4.9bn for adaptation. In Africa, the continent with the lowest emissions of GHG, the African Development Bank seeks to mobilise $4bn this year for projects under its Climate Action Window. The second Africa Climate Summit in Addis Ababa last month, agreed to set up the Africa Climate Innovation Compact and the African Climate Facility to mobilise $50bn annually in climate finance.
However, the amounts mobilised or committed thus far are no way near the assessed needs for climate finance. UNEP’s Adaptation Gap Report 2024 puts the annual funding gap for adaptation between $187bn and $359bn.
Governments and multilateral development banks will need the private sector to fill this gap and put in place a strong financial scaffolding for climate change. The banking sector, a key player in this field, faced a setback this month when the Net-Zero Ban-king Alliance paused operations, though banks will still be able to use its resources to set decarbonisation targets. The private sector’s full potential can only be catalysed by creating an enabling environment that fosters green investments, reduces risks and promotes accountability.
To navigate such difficult financial straits, the onus will be on governments to implement their new Nationally Determined Contributions or NDCs 3.0 in a manner that frontload investments into climate change and find innovative ways of financing from other sources. Optimising nature-based solutions is a way to do more with less.
The journey from Baku to Belem and beyond is strewn with challenges but there are also opportunities, which must not be missed because climate action cannot be paused. Re-energising regional initiatives for climate and environment will surely help in making this journey less arduous.
The writer is director of intergovernmental affairs, United Nations Environment Programme.
Published in Dawn, October 20th, 2025