Climate finance to top agenda at UN talks in Brazil amid growing needs of developing nations

By Nuran Erkul

LONDON (AA) - Climate finance is set to dominate next week’s UN climate talks in Brazil, where governments will seek concrete pledges to mobilize the trillions of dollars needed to meet global climate goals and help vulnerable nations adapt to worsening impacts.

The 30th Conference of the Parties (COP30) will convene Nov. 10-21 in Belem, the capital of Brazil’s Amazon state of Para.

The talks will test whether governments can translate momentum from past meetings into concrete financing for vulnerable countries facing mounting adaptation costs.

Developing and least-developed nations face rapidly rising adaptation costs but have limited access to public funds to help them build projects that address the destructive impacts of climate change.

Last year's COP29 in Azerbaijan produced the "Baku-to-Belem Roadmap," a plan to mobilize $1.3 trillion per year by 2035 in public and private climate finance.

The roadmap emphasizes the need for more grants and concessional capital, measures to expand fiscal space and ensure debt sustainability, affordable private finance, stronger coordination, and systemic reforms to direct investments toward climate goals.

Despite progress, experts warn that current funding remains far short of what is needed.

Gianpiero Nacci, managing director for climate strategy and delivery at the European Bank for Reconstruction and Development (EBRD), told Anadolu that current financial flows are insufficient globally.

"There is some progress in the last few years, but certainly what the world is able to deliver through the multilateral channels, the public channels, or the private channels, is insufficient to support the objective of the Paris Agreement," Nacci added.

- Climate risk should be central to fiscal policy

Nacci said that multilateral development banks remain the biggest source of climate funding, channeling around $26 billion to low-income and middle-income countries last year, roughly in line with the Glasgow pledge to double adaptation finance by 2025.

He warned that adaptation finance remains one of the hardest nuts to crack. "Lack of information, plans and economic feasibility analysis. So, it is not easy to translate into actionable and investable projects. This is a big gap that governments need to address."

"The issue of climate risk should be more and more central to the way fiscal policy is designed," he added.

Describing this year's climate talks as an "implementation COP," Nacci highlighted the importance of messages delivered at Belem. "No major decisions are necessarily expected, but if the signal remains consistent, it will have a lot of effect," he said.

"I believe the best that COP30 can deliver is a clear signal of direction of travel," he said.

"We have a lot of expectation on this Baku to Belem Roadmap because hopefully we will give a clear indication about how the climate finance architecture may look like."

"We believe that green transition is irreversible because it is about economics," he said.

"Renewable energy is the cheapest source of electricity everywhere in the world."

"The signals are also important to avoid distractions and detours. Signaling remains super important, setting the direction of travel," he added.

- 'Priority now is not only more money, but better money'

Rob Moore, associate director for public banks and development at think tank E3G, told Anadolu that finance is "a hot topic at every COP," partly because global climate finance needs are enormous.

An estimated $7 trillion to $8.1 trillion a year will be required worldwide by 2035, according to the High-Level Expert Group.

"There has been progress. Global climate finance hit a record $1.9 trillion in 2023, and if current growth continues, we could see around $6 trillion per year by 2028,” he added.

Still, Moore warned that most funds do not reach developing countries and that too little comes as grants or concessional loans.

"While the overall pot is growing, the quality and distribution of finance still lag behind what's needed," he added. "The priority now is not only more money, but better money, public finance that is accessible, predictable, and responsive to the needs of the most vulnerable."

Moore said that on the public finance side, a lack of political will remains a major challenge to mobilizing climate funds, while on the private side, meeting the $1.3 trillion investment target will require easing fiscal constraints and advancing regulatory reforms to better attract private capital in developing countries.

"Success at COP30 means a credible Baku to Belem Roadmap is presented and endorsed by countries as a pathway to channeling $1.3 trillion in climate finance into developing countries per year by 2035," he said.

"Wealthy countries must provide reassurance that public finance will continue to flow and scale, particularly for adaptation finance, and governments must find a way of navigating a path forward that responds to a more complicated political outlook," he explained.

* Handan Kazanci in Istanbul contributed to this story.