Developing countries in limbo as rich nations delay new climate finance plans

Many governments are yet to set targets, leaving recipient countries struggling to plan and attract private investment

Developing countries have been left in limbo by the failure of some of the world’s biggest economies to flesh out their plans for new climate finance.

Poor countries are supposed to receive $300bn a year from the governments of industrialised nations by 2035, along with about $1tn from other sources, to help them cope with the effects of extreme weather and shift to a low-carbon future.

But many rich governments have not yet set out their targets and plans for providing climate finance beyond the end of this year or next. This gap is damaging because it means recipient countries cannot plan and makes it harder for them to attract private sector investment to supplement the public sector money.

Analysis by the NRDC and E3G thinktanks seen by the Guardian shows that the developed world is broadly on track to meet the $300bn a year goal – known as the NCQG, or national collective quantitative goal – set at the Cop29 conference two years ago. By 2030 they should be providing about $229bn a year. The multilateral development banks should provide about $185bn of that.

Joe Thwaites, international climate finance director at the National Resources Defence Council, co-wrote the original analysis along with the E3G thinktank and told the Guardian that unless development banks and national governments made sharp cuts in the next round of financing, which is unlikely, the target would be almost met.

“Most countries look in quite good shape on climate finance,” he said. “The problem is that they’re not being very public about it.”

If the EU continues its current provision of about $36bn a year (which is likely) then – taking into account the pledges already made by the UK, Canada and some other smaller countries – there would remain a gap of about $7bn to fill.

If a different president is in the White House, the US could make up some of the shortfall, along with Japan and Australia, which have yet to set out climate finance goals, according to Thwaites.

Further analysis by Carbon Brief suggested that if countries failed to implement any new climate finance after their current targets expire, the developing world would face cuts of 70% in bilateral finance (which excludes the development banks) from the rich world. But Thwaites said this was highly unlikely as most countries would come forward with new commitments soon.

“It’s unfortunate that they have been quite silent on this, however. If they would talk about it more, it would reassure the G77 [group of developing countries],” he said.

Climate finance is a vexed topic at the Cop31 talks, which began on Monday in Antalya, Turkey, but are being presided over by Australia in a compromise deal struck after the two countries vied for the presidency. Some developing countries wanted to reopen previous resolutions on climate finance, as they were concerned that there could be cuts to provision.

The World Bank retired its official climate finance target this summer, under pressure from Donald Trump’s White House, but will still provide tens of billions a year in finance towards climate-related projects. Other development banks are likely to continue with their climate finance plans, according to Thwaites.

France, Germany and Australia are among the major countries yet to publicly state their new climate finance goals. It is highly unusual for a developed Cop host country such as Australia to fail to set out new plans on climate finance ahead of its hosting.

The UK cut its climate finance earlier this year. Australia was contacted for comment, as was Germany.

A spokesperson for France’s AFD aid agency said: “Our Climate and Biodiversity Strategy maintains AFD’s level of ambition and sets out the following targets for the 2025–2027 period: €6 billion in climate finance per year and €800 million per year for biodiversity.”

A spokesperson for Japan said the country was “fully committed to fulfil the obligation under the Paris Agreement, actively providing support to developing countries in climate action. This support is channelled through the Japan International Cooperation Agency, international organisations and climate funds including the Green Climate Fund (GCF) and the Fund for Responding to Loss and Damage. While Japan does not plan to announce any new financial pledges at present, this does not indicate any shift in our policy explained above. For example, Japan has committed up to 165 billion yen to the GCF’s second replenishment for the 2024–2027 period (GCF-2) and is steadily implementing this commitment.”