{"id":114,"date":"2026-02-27T16:15:11","date_gmt":"2026-02-27T16:15:11","guid":{"rendered":"https:\/\/menastability.org\/?p=114"},"modified":"2026-03-06T16:19:06","modified_gmt":"2026-03-06T16:19:06","slug":"wrong-finance-in-a-broken-multilateral-system-red-flags-from-cop30-belem","status":"publish","type":"post","link":"https:\/\/menastability.org\/en\/institute-for-mena-stability\/wrong-finance-in-a-broken-multilateral-system-red-flags-from-cop30-belem\/","title":{"rendered":"Wrong finance in a broken multilateral system: red flags from COP30-Bel\u00e9m"},"content":{"rendered":"\n

With the latest global summit on climate action recently wrapped up, ambitious COP pledges and initiatives continue to miss delivery due to inadequate commitments, weak operationalisation and unclear reporting systems. As this column reports, flows of climate finance remain skewed: loans over grants; climate mitigation more than climate adaptation; and weak accountability across mechanisms. Without grant-based finance, debt relief, climate-adjusted lending and predictable multilateral flows, implementation of promises will fail.<\/p>\n\n\n\n

With negotiators on global climate action gathered in Bel\u00e9m in the heart of the Brazilian Amazon this past month, COP30 was branded the \u2018COP of implementation\u2019, with a special focus on adaptation, forest protection, and loss and damage. Yet with the summit now over, the gap between ambition and delivery remains stark, with finance talks failing to translate the new collective quantified goal (NCQG) and the fund for responding to loss and damage (FRLD) into predictable, grant-based support.<\/p>\n\n\n\n

The \u2018Baku to Bel\u00e9m\u2019 finance story<\/p>\n\n\n\n

At COP29 in Baku in 2024, countries pledged to triple climate finance to $300 billion annually by 2035 and outlined a broader $1.3 trillion \u2018Baku finance goal\u2019, which is now linked to a Baku-to-Bel\u00e9m roadmap. Yet scepticism persists because the structural inequalities in global finance that block real access and fairness remain unchanged.<\/p>\n\n\n\n

Inequality is baked into the climate finance system through wrong<\/em> finance<\/p>\n\n\n\n

Climate finance has gone wrong in three dimensions: size, type and allocation.<\/p>\n\n\n\n

Wrong size<\/p>\n\n\n\n

According to the OECD, climate finance provided and mobilised by developed countries reached $89.6 billion in 2021, falling short of the annual goal of $100 billion (OECD, 2023<\/a>). In 2022, developed countries provided $32.4 billion in adaptation finance, representing only 28% of total climate finance; mitigation continued to receive 60% of funds (OECD, 2024<\/a>).<\/p>\n\n\n\n

Wrong type<\/p>\n\n\n\n

In a developing world already squeezed by a public debt crisis, climate finance is too often making matters worse, because most of it comes as loans rather than grants. Flows of foreign direct investment into developing economies dropped to just $841 billion in 2023, a 9% fall (United Nations Trade and Development, UNCTAD, 2024<\/a>).<\/p>\n\n\n\n

Meanwhile, developing countries paid $921 billion in interest on public debt in 2024 (a 10% increase over 2023) and 3.4 billion people live in countries that spend more on debt interest than on either health or education (UNCTAD, 2025<\/a>). At the same time, in low-income countries, domestic public debt servicing costs have surged: the median domestic debt service as a percentage of government revenues rose from 3% in 2014 to about 19% in 2024 (International Monetary Fund, IMF, 2025<\/a>).<\/p>\n\n\n\n

Amid all this, over 70% of what has been provided as climate finance comes as loans rather than grants (United Nations Development Programme, UNDP, 2021<\/a>; OECD, 2021<\/a>). The result is that climate-vulnerable economies are forced to choose between servicing debt or investing in adaptation and mitigation, a dilemma that no country should have to face.<\/p>\n\n\n\n

Wrong allocation<\/p>\n\n\n\n

The divide reflects how the climate finance agenda is prioritised: leveraging their technological advantage and legacy as top emitters, developed countries tend to emphasise mitigation efforts aiming to reduce global emissions of greenhouse gases (Centeno, 2025<\/a>). The largest chunk of the already insufficient finance has gone to mitigation projects rather than adaptation, sidelining the urgent priorities of countries facing rising seas and falling rains (Tollefson, 2021<\/a>; Bhandary, 2022<\/a>).<\/p>\n\n\n\n

The global system is rigged, with poor countries expected to borrow to fund climate action, even as the emissions from which they suffer are generated elsewhere.<\/p>\n\n\n\n

The multilateral breakdown: from threat to reality<\/p>\n\n\n\n

The multilateral system underpinning climate cooperation is fracturing. Geopolitical tensions \u2013 from wars in the Middle East and Ukraine, to debt crises in Ghana and Sri Lanka \u2013 are diverting resources and weakening green investment readiness, while US-China decoupling further erodes cooperation (IMF, 2025<\/a>). The United States, under President Trump, has formally withdrawn from the Paris Agreement and stepped back from global mechanisms like the FRLD.<\/p>\n\n\n\n

In Bel\u00e9m, negotiations on climate finance reporting reveal deep mistrust as wealthy countries increasingly bypass multilateral channels, accelerating the \u2018bilateralisation\u2019 of climate finance (OECD, 2023<\/a>; Transparency International, 2023)<\/a>. This weakens the Paris Agreement financial tracking mechanisms and fund predictability.<\/p>\n\n\n\n

The first global stock-take exposed severe misalignment with 1.5\u00b0C and failures in finance delivery (United Nations Framework Convention on Climate Change, UNFCCC, 2023<\/a>), risking a process that merely documents inequality (Mbeva and Pauw, 2022)<\/a>.<\/p>\n\n\n\n

Another dimension in the failure among multilaterals is that integrating climate considerations into global debt frameworks remains far below expectations. Recent initiatives \u2013 including the UN Expert Group 11 Measures on Debt<\/a> and the Jubilee Commission Blueprint<\/a> \u2013 emphasise that IMF-World Bank assessments and the G20 Common Framework still fall short of acknowledging climate vulnerability and disaster shocks.<\/p>\n\n\n\n

Without climate-aligned debt relief, countries face impossible choices between repayment and resilience. Zambia\u2019s prolonged restructuring illustrates how current systems trap climate-exposed nations.<\/p>\n\n\n\n

The tropical forests finance framework: ambitious but in need of systemic rebalancing<\/p>\n\n\n\n

COP30 should be congratulated on having launched the tropical forests finance framework (TFFF), a needed recognition of the Amazon\u2019s global significance. The launch declaration has already been endorsed by 53 countries<\/a>.<\/p>\n\n\n\n

But the success of the TFFF will depend entirely on whether it is paired with deeper transformations in the global financial system. Over the medium term, the TFFF aims to build a $125 billion facility<\/a> \u2013 combining $25 billion of sovereign capital with $100 billion of investor debt, a 1:4 public-to-private ratio that reinforces how heavily the architecture leans on private capital.<\/p>\n\n\n\n

Article 9.1 is unequivocal: provide or mobilise?<\/p>\n\n\n\n

Article 9.1 of the Paris Agreement<\/a> imposes a clear legal duty on developed countries to provide predictable public concessional finance for mitigation and adaptation. Yet practice has shifted towards Article 9.3, which urges countries to mobilise finance, widely interpreted as leveraging private capital.<\/p>\n\n\n\n

This shift allows governments to claim credit for catalysing private flows while reducing direct public contributions, weakening the support that vulnerable countries need for adaptation and resilience. The trend is deepening as new mechanisms, including the TFFF, emphasise private investment while leaving their public finance pillars unclear.<\/p>\n\n\n\n

Fixing the architecture: not just more money but systemic reform<\/p>\n\n\n\n

What\u2019s needed now is not just a new pledge or a new initiative, but a paradigm shift in the delivery of COP outcomes. Key actions should include:<\/p>\n\n\n\n