Five Things to Watch on Climate Finance at COP31

In recent years, wealthy countries have made significant cuts to development aid, leading developing countries to voice understandable concerns about how climate finance goals will be met. Developing countries called for a dedicated space in the CMA to discuss developed countries’ obligation under the Paris Agreement to provide climate finance, and at COP30 last year, governments agreed to create a two-year Climate Finance Work Programme. 

There has been intense wrangling about the timing, status, and content of this Work Programme. COP negotiations have limited sway on national legislatures and finance ministries, where decisions about allocating public climate finance are made, but the underlying question—How much international public climate finance will there be?—does deserve greater clarity. 

Recent reporting from the European Union and its 27 member states, the largest block of climate finance contributors, has shown that their public climate finance continued to grow to a record €32.3 billion in 2025. And the multilateral development banks (MDBs), the largest channel for climate finance, reached a record $103 billion in climate finance for emerging markets and developing economies in 2025. NRDC has also been keeping track of how MDBs’ clean electricity finance is growing. These figures provide some reassurance, though questions remain about whether this trend will continue.  

In prior years, developed countries would announce multiyear climate finance pledges to build confidence that their climate finance commitments would be met. In 2015, when the Paris Agreement was being negotiated, most developed countries announced pledges leading up to 2020, and in 2021, most again announced pledges up to 2024 or 2025. But only a handful of wealthy countries have announced new multiyear climate finance pledges for the post-2025 period. Among the G7, who have historically contributed around 80 percent of climate finance coming from developed countries, only Canada and the United Kingdom (U.K.) have made new multiyear pledges. Even Australia, the COP31 co-presidency, has yet to announce a new multiyear climate finance pledge.ge. 

This is shortsighted. Developed countries cannot be expected to fully fund the rest of the world’s transition to clean energy and resilient economies, but they would be wise to show how they are continuing to lead on climate finance. Firstly, this is not charity but rather a strategic investment in a safer and more prosperous world. It delivers economic and security benefits to both contributors and recipients. This is something a growing number of nontraditional contributor countries clearly recognize, as they have begun to step up their international climate funding. Secondly, by making clear how they will continue to be leading contributors, developed countries can enhance the power of their example to spur other wealthy and high-emitting countries to contribute their fair share. At present, these other countries can deflect criticism by pointing to developed countries’ lack of clarity on future contributions. 

As debates around the Climate Finance Work Programme continue, the CMA could call on developed countries and other contributors who have yet to do so to announce multiyear climate finance pledges. These could be included in countries’ fourth Article 9.5 Biennial Communications, which are due by the end of 2026. While they may not be as sizable as those announced in 2015 and 2021, they can still provide reassurance that public climate finance will continue to flow and correct some of the more catastrophic aspersions about climate finance that have been made in the absence of many clear announcements. NRDC and E3G are tracking new multiyear pledges and comparing them to countries’ previous commitments in our Climate Finance Commitments Tracker. 

Public climate finance from wealthy countries plays an important role, but it is part of a broader financial system that will need to be mobilized to ensure the larger climate finance target of $1.3 trillion by 2035 is met.  

Last year, the COP29 and COP30 presidencies produced the Baku to Belém Roadmap to $1.3T which set out actions that could be taken to help achieve the goal. CMA.7 took note of the road map, and this year, the presidencies are expected to publish an update on progress as well as a compass for tracking how different investments are being scaled up toward the goal. the goal. 

The Paris Agreement’s long-term goal on climate finance,  “Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development” (Article 2.1c), also requires shifting finance flows away from fossil fuels and other polluting activities and toward clean and resilient investments. Throughout 2026, the Brazilian COP30 presidency has been convening the Veredas Dialogue and Xingu Finance Talks to allow governments to discuss concrete steps to implement this goal, and there will be further discussions at COP31. The Brazilian efforts to broaden this conversation beyond UNFCCC negotiators—to include the wider range of actors that influence finance flows, including finance ministries, central banks, investors, and credit ratings agencies—are commendable. The COP31 and future COP presidencies should continue this approach. 

COP can send important signals to the wider financial system about the role it must play. At COP27 and COP28, governments called on MDBs and other financial institutions to further scale up their climate investments. In 2024, the MDBs jointly announced that they expected to provide $120 billion in climate finance for emerging markets and developing economies by 2030, and that they’re aiming to mobilize a further $65 billion in private investment. The MDBs’ announcement was key to clinching the new international climate finance goals agreed to in 2024. But in 2026, some MDBs are facing U.S. pressure to renege on their climate commitments. In its cover decision, COP31 could call on MDBs to reaffirm their 2030 climate finance commitments. With a call coming from virtually every other government in the world, it would help empower MDB leadership to stand up to U.S. pressure. 

Last year, governments agreed to a new goal of tripling adaptation finance by 2035. But the decision did not set a clear baseline for this goal. Some developing countries have called for this baseline to be clarified at COP31, and the African Group of Negotiators has requested a new agenda item to give a dedicated space to discuss this goal. 

Improving shared understanding of the baseline for the goal will be important for both contributors and recipients. Since the previous adaptation finance goal was to double 2019 levels by 2025, and the decision to triple was taken in 2025, the most logical reading is that it is from 2025 levels. If the previous goal of doubling adaptation finance from 2019 levels by 2025 is met, it will mean the new goal is at least $120 billion per year by 2035. A decision by the CMA clarifying the baseline year would be welcome but may be politically contentious. The CMA could also call for contributors to make adaptation finance pledges (alongside their overarching climate finance pledges, as discussed above), as well as call for a collective delivery plan by contributors. 

One of the areas where the COP has direct influence on climate finance flows is through the multilateral funds it has helped establish. When the climate convention was adopted in 1992, the Global Environment Facility (GEF) was tasked with providing climate funding to support developing countries in undertaking climate action. A common response to growing climate finance needs has been for the COP to create climate funds. Over the following 30 years, the COP has created five additional climate funds to support developing countries: the Least Developed Countries Fund (LDCF), the Special Climate Change Fund (SCCF), the Adaptation Fund (all three established in 2001); the Green Climate Fund (GCF, 2010); and the Fund for Responding to Loss and Damage (2022). 

Once created, these funds often develop well-intended yet sprawling bureaucratic requirements that hamper their ability to deliver for the communities they are supposed to serve. Rather than doing the painstaking and often boring work to fix these problems, the temptation is to create a new fund in the hope that it’ll avoid the pitfalls of previous efforts. But having more wallets doesn’t make you richer. Almost inevitably, the new fund follows the same trajectory, and the fundamental constraint of inadequate resources to go around isn’t fixed. Money is just spread more thinly. 

COP31 can take some tangible steps to help break this cycle: 

COP is also the place where governments often make pledges to climate funds, especially to the Adaptation Fund, LDCF, and SCCF, and NRDC will be tracking these in our Climate Funds Pledge Tracker. 

The previous four areas all relate to formal COP and CMA decisions. But as the governments shift from negotiating agreements, goals, and tracking systems to implementing these commitments, the non-negotiated or “outside” initiatives are taking on a greater role at COP. 

As co-president of COP31, Australia has been working on the Access to Climate Finance for Small Island Developing States (SIDS) and Least Developed Countries (LDCs) Statement and Action Plan. The climate finance architecture is complex and difficult to navigate, and this has been a particular challenge for capacity-constrained vulnerable countries like SIDS and LDCs. There is broad agreement that access to climate finance needs to be significantly improved. To move the needle, the Statement and Action Plan must build on previous pledges and initiatives, such as the Taskforce on Access to Climate Finance, and include new measurable commitments, such as increasing the share of climate finance flowing through direct access modalities; and it must develop common metrics for measuring access, like the time between proposal submission, approvals, and disbursements, along with clear and consistent reporting on these metrics by climate finance institutions. Some international climate finance institutions have been resistant to implementing access reforms, and they cannot be allowed to limit commitments to the lowest common denominator. Instead, ambitious governments, climate finance institutions, the private sector, and civil society organizations can work to craft strong and effective commitments on access, then advocate to ensure the laggards catch up. 

In another approach to addressing access challenges, Pacific Islands Forum leaders have created their own climate finance institution, the Pacific Resilience Facility (PRF), owned and operated by Pacific governments, which will provide grant funding to community resilience projects. The PRF aims to raise $500 million in initial capitalization by COP31. Funds will be invested internationally and regionally, with the aim of generating sustainable annual returns to finance projects. So far, the PIF has received $180 million in pledges. 

COP31 will also see the Turkish co-presidency launch its Climate Implementation Bridge initiative, which aims to strengthen the connection between national climate priorities, investment opportunities, and financing partners. This should build on country platforms and initiatives like the NAP Implementation Alliance and the Fostering Investable National Implementation for adaptation and resilience (FINI). Launched at COP30 and co-led by NRDC and the Atlantic Council’s Climate Resilience Center, FINI connects businesses, insurers, banks, government officials, philanthropies, and civil society leaders to test solutions that translate national adaptation priorities into clearer investment opportunities with credible financing pathways. 

At the past two COPs, governments agreed to major new goals on climate finance for developing countries. Now, the focus must turn to how to deliver them. This requires a different role for COP31: one focused on sending the right signals to the global financial system, on improving transparency of commitments, on reforming the climate funds the COP has created to make them more effective, and on building an ecosystem of outside initiatives to support climate finance delivery.