Explainer: This Diwali, let’s learn a bit about climate finance

As Diwali lights up India on November 8, leaders from around the world will gather in Antalya, Türkiye, the next day for COP31. At stake is the elusive promise of climate finance that could help protect more than a billion lives and livelihoods.

Developed countries have pledged to provide finance to help developing countries tackle climate change, reflecting their historical responsibility for the emissions that have driven global warming. This money is critical both to cutting emissions and helping vulnerable communities adapt to worsening climate impacts.

From the $100 billion pledge to the latest commitments, the debate has long centred on who pays, how much, and whether the money reaches those who need it. Ahead of COP31, the European Union’s climate chief, Wopke Hoekstra, said talks on fresh climate finance commitments were “dead in the water” after two years of stalled progress on cutting global emissions. The EU, which said it provided €33 billion in climate finance in 2025, argued that other countries needed to match financial support with more ambitious emissions-cutting efforts. Hoekstra called for a more fundamental shift, rather than “endless new rounds” of financing discussions.

Meena Raman of the Third World Network challenged that position, saying the EU’s rejection of fresh finance sent a deeply concerning signal to developing countries. She told CarbonCopy that developed countries must honour their climate finance obligations, and that their “climate debt” did not disappear because they wanted to stop discussing finance. For Raman, the central issue was not whether to keep negotiating new commitments, but whether developed countries would provide additional, predictable and debt-free public finance, rather than force developing countries to borrow to address a crisis they did not cause.

Now, fragmented geopolitics, wars and governments diverting budgets towards energy security, cyber security and military spending threaten to push climate finance further down the priority list, just as climate impacts worsen.

Will COP31 turn existing commitments into finance for the countries that need it most? Here’s a quick recap of what previous COPs have achieved on climate finance, and where the battle lines lie this year.

The timeline: From the $100 billion at COP15 to COP31

2009–2025: The $100 billion pledge

At COP15 in Copenhagen in 2009, developed countries pledged to mobilise $100 billion a year in climate finance for developing countries by 2020. The deadline was later extended to 2025.

The pledge is a recurring source of tension. Developing countries questioned both the amount and the quality of the finance, including how much was provided as grants rather than loans, and how much actually reached countries that needed it most.

2015: The Paris Agreement establishes finance obligations

Article 9 of the Paris Agreement sets out the responsibilities of countries on climate finance.

Article 9.1: Developed countries shall provide financial resources to assist developing countries with mitigation and adaptation. Developing countries argue that this is a binding obligation grounded in historical responsibility, not voluntary aid.
Article 9.2: Other countries may provide support voluntarily.
Article 9.3: Developed countries should take the lead in mobilising climate finance from a variety of sources.

The distinction between providing and mobilising finance remains central to the negotiations. Developing countries argue that attracting private investment or encouraging other countries to contribute cannot replace developed countries’ obligation to provide fiscal support in the form of public climate finance.

Also Read: Are rich nations using Article 2.1(C) to undermine equity?

Caption: Climate finance and the obligation to provide it. (Visuals: Arkatapa Basu)

2024: COP29 agrees a new climate finance goal

Many developing countries argued that the $100 billion target was an insufficient, arbitrary figure, not based on an assessment of their actual climate finance needs. In 2015, countries agreed to set a new goal that would take developing countries’ needs and priorities into account.

Also Read: Discussion on new climate finance goal begins at COP26, rich nations take aim

At COP29 in Baku in 2024, they finally agreed on a New Collective Quantified Goal (NCQG), calling on developed countries to take the lead in mobilising at least $300 billion a year by 2035. The decision also called on all actors to work towards scaling up finance from all sources to at least $1.3 trillion a year by 2035.

Developing countries argued that the $300 billion goal fell far short of their needs. The actual cost for implementing their climate plans is closer to $5.1-$6.8 trillion annually up to 2030, according to estimates cited in the negotiations.

Also Read: Developing countries need nearly $6 trillion by 2030 just to cover 40% of their NDCs: UN report

The central disagreement was not only about the quantum of finance, but also about where the money would come from, how much would be public finance, and whether the new target reflected developed countries’ obligations under Article 9.

More on this below, but first, let’s take a quick detour to look at the key developments in adaptation finance.

2025: COP30 and the adaptation finance gap

Adaptation finance remained a major fault line at COP30 in Belém. Developing countries pushed for a rapid increase in funding to help them prepare for and respond to climate impacts.

The final outcome called for adaptation finance to triple by 2035, but did not establish the clear baseline and near-term timetable that developing countries had sought.

The gap between adaptation needs and available funding remains huge:

$310-$365 billion a year: What developing countries could need for climate adaptation by 2035.
$26 billion: International public finance provided for adaptation in developing countries in 2023.
12 -14 times: How much greater annual adaptation needs are than current international public funding.
$135 million: New pledges announced for the Adaptation Fund at COP30.
$1.6 billion: Total funding the Adaptation Fund has committed to 226 projects as of October 2026.

The Adaptation Fund is a dedicated grant-making fund, not the entirety of global adaptation finance. Before COP30, it had set a fundraising target of at least $300 million for 2025, to help it expand support and work towards tripling its outflows by 2030. The $135 million pledged at COP30 was well short of that target.

The broader tripling commitment agreed at COP30 is for 2035. It should not be confused with the Adaptation Fund’s separate target to expand its own outflows by 2030.

The debate did not end in Belém. At the June 2026 intersessional meetings, developing countries again raised concerns about resistance to reaffirming the adaptation finance commitment.

For COP31, the question is whether the tripling pledge will be backed by a clear pathway, adequate public funding and easier access for vulnerable countries.

2025–2026: A fight over whether finance obligations can be discussed at COP31

After COP29, developing countries pushed for a dedicated process to discuss climate finance under Article 9.1 of the Paris Agreement.

At COP30, parties agreed to a two-year Climate Finance Work Programme. Developing countries later argued that a workshop held during the June 2026 intersessional meetings at Bonn did not provide enough space to address their concerns.

Then, the Brazilian COP30 presidency worked with the UNFCCC secretariat to include a new item on COP31’s provisional agenda: a discussion of developed countries’ obligation to provide climate finance under Article 9.1.

The agenda itself is now a political test. On November 9, the coastal city of Antalya becomes the theatre for this contest.

Developing countries want a space to discuss whether developed countries are meeting their existing obligations or moving away from them. But developed countries are not keen to see the item included in COP31’s final agenda, arguing that the NCQG agreement leaves no need for further discussion, a COP observer told CarbonCopy.

The NCQG’s $300 billion annual goal is a headline figure, but the composition and accessibility of the finance matter just as much, the observer said.

Developing countries have repeatedly argued that private capital mobilisation cannot substitute for public finance provided under Article 9.1. Private investment may be difficult to attract for adaptation projects that do not generate predictable commercial returns. Loans can also deepen debt pressures in countries already facing high borrowing costs and climate-related losses.

COP31’s outcome will determine whether developed countries uphold their obligation to provide climate finance, or try to shift responsibility towards mobilising money from a wider range of sources.

The bottom line

But remember, climate finance negotiations at COP31 are taking place amid wars, rising military spending, energy insecurity, a super El Niño and pressure on public budgets. Developed countries are directing resources towards rearmament and other domestic priorities, while cutting overseas development assistance and reducing some climate finance contributions.

“The political will to provide developing countries with the finance they need is lacking,” the observer said, warning that climate finance could lose out to competing priorities.

Climate finance has long been a test of trust in the UN climate process. Developing countries are grappling with the same wars, energy shocks and supply chain disruptions as the rest of the world, but often have fewer resources to absorb their costs. On top of these overlapping crises, they face worsening climate impacts and mounting losses and damage, while struggling to finance their own energy transitions.

Also read: Is climate finance the antidote to the trust deficit looming over COP 26?

The question for Antalya is whether countries can turn existing commitments into meaningful delivery, or whether finance will once again be the gap between what the world agrees to do and what developing countries can afford to implement.

CarbonCopy will follow the climate finance negotiations on the ground at COP31 and report back on what unfolds.

Carbon Copy Website Graphics (2)
Caption: What to watch out for at COP31. (Visuals: Arkatapa Basu)