With UN climate negotiations underway at COP28 in Dubai, United Arab Emirates (UAE), climate finance has once again been one of the key issues countries have been clashing over.
The recently concluded process to design the new “loss-and-damage fund” highlighted known rifts between developed and developing country parties on finance provision.
One such rift is the lingering question of who should provide climate finance to help developing countries decarbonise their economies and protect themselves from climate hazards.
Traditionally, only a small set of high-income nations have been obliged to provide this finance under the UN system.
Some parties, including the US and the EU, have argued that this list should expand to include relatively wealthy emerging economies, such as China and the Gulf states.
As our analysis demonstrates, many of these nations already provide substantial sums of money that could potentially be described as “climate finance”.
In fact, large nations, such as India, Brazil and Saudi Arabia contribute to more climate-related finance via multilateral development banks (MDBs) than many countries in the global north.
Meanwhile, China could rival the largest developed-country donors even on direct climate funding for developing countries.
Different responsibilities
Current responsibility for climate finance under the UN climate regime lies with Annex II countries – meaning the high-income nations that were members of the Organisation for Economic Co-operation and Development (OECD) when the UN Framework Convention on Climate Change (UNFCCC) was signed in 1992.
These nations – including western Europe, the EU, US, Canada, Australia, New Zealand and Japan – bear the obligation to provide a minimum of $100bn in climate finance annually to developing countries by 2020 – and up to 2025. (Developed countries failed to reach the 2020 target.)
Developing countries do not have such a responsibility, but they are “encouraged” to contribute voluntary climate finance under the Paris Agreement. This voluntary contribution aims to reflect the collective global effort required to combat climate change.
Yet, the heart of the ongoing political disputes lies in the nebulous categorisation of “developed” and “developing” introduced in the Paris Agreement in 2015.
This arrangement was viewed as a necessary compromise to replace the rigid and outdated lists agreed in 1992, which entrusted such financially divergent nations as Qatar and Malawi with the same climate responsibilities.
In theory, it opened the door for countries to self-differentiate their responsibilities and capabilities to reflect their evolving economic weight and influence in the world. To date, no developing country has made use of this possibility and formally pledged to provide climate finance.
As countries negotiate a new climate finance target for 2025 onwards to succeed the £100bn goal, developed countries would like to see the list of contributor countries formally expanded. There has been a similar effort to make countries such as China and Saudi Arabia contribute to the new loss-and-damage fund.
Top donors
Ongoing disputes about expanding the “donor base” for climate finance within the UNFCCC have overlooked the voluntary finance support that developing countries are already providing to other developing countries, in the spirit of solidarity.
Analyses from ODI and E3G have shed light on the magnitude of these contributions.
ODI’s research reveals that virtually all developing country parties are already providing “climate finance” through their contributions to multilateral institutions.
Large, middle-income countries, which are often called upon to assume climate-finance obligations, are already contributing “climate finance” for other developing countries through multilateral development banks (MDBs), such as the World Bank, and climate funds, such as the Green Climate Fund.
Accounting for these financial flows would place BRICS heavyweights – China, India, Brazil and Russia – among the top 20 providers globally.
Saudi Arabia, which alongside other relatively wealthy emerging economies has resisted efforts to broaden the climate finance donor pool, would also make the top 20. This can be seen in the chart below.
The bulk of these contributions are via MDBs. Countries pay into these banks for a range of reasons and their primary intention may not always be to provide climate finance to other developing countries.
However, they are still relevant, especially given that developed countries such as the US rely heavily on such MDB contributions when reporting their own climate finance.
Additionally, Brazil, China, India, Indonesia, Mexico and South Korea have also made specific contributions to multilateral climate funds, which are clearly intended to be used for climate action by developing countries.
Bilateral flows
Crucially, these multilateral figures are likely to be a significant underestimate of the total climate-related finance provided by developing countries.
This is because they do not account for bilateral – or country-to-country – finance flows to other developing countries, such as those distributed via China’s South-South Cooperation Assistance Fund or the Belt and Road Initiative.
There is a lack of official data on these flows, but our analysis shows that they can be significant.
For example, E3G analysis of Chinese bilateral finance data compiled by research institute AidData shows that China has invested, on average, $1.46bn per year worth of climate-related projects between 2012 and 2017. (Data could not be assembled for the years after 2017.)
This includes both public and private bilateral investments, as well as aid in the energy, transport, water and disaster risk reduction sectors that could be described as either reducing emissions or improving climate resilience.
If the public portions of these bilateral financial flows are combined with multilateral flows, China would rank as the seventh largest provider of international climate finance to developing countries in 2017.
The nation’s $2.1bn of contributions place it roughly on a par with Italy and ahead of many developed countries including Canada and Norway in that year.
Reporting challenges
Despite these substantial contributions, the financial support provided by China and other large, middle-income nations to their fellow developing countries are going largely unrecognised by the international system.
One key reason is that developing countries are not obliged to report such contributions.
A fundamental reason for this is that these countries fear potential misinterpretation. Reporting such support voluntarily might lead to geopolitical expectations and pressure to assume “developed country” responsibilities, including taking more drastic actions to reduce emissions, our research suggests.
A change in status in the climate regime could also result in pressure on similar changes in other international regimes such as development finance or trade.
The under-delivery of the $100bn climate finance goal by developed countries also dissuades interested and capable developing countries from enhancing their voluntary support.
Although the $100bn goal is likely to have been met in 2023, it is hard for developing countries to rally the political support to send taxpayers’ money abroad, when rich countries are seen as not paying their “fair share”.
In addition, developing countries often lack the institutional and technical capacity to fully disclose their voluntary financial contributions.
The lack of transparency also extends to underreported commitments by other non-state actors, including corporations and financial institutions. These issues could be addressed collectively in ongoing discussions in the UNFCCC secretariat-led accountability framework for non-state actors.
New goal
Delegates at UN climate negotiations are set to agree on a new international climate finance goal, succeeding the $100bn, by COP29 in 2024. This target will include details on the sources of finance and likely reshape the climate finance landscape for the next decade.
COP28 could build the groundwork for a consensus on the so-called “new collective quantified goal” (NCQG), including an acknowledgement of existing contributions from developing countries.
The NCQG could do this while providing reassurance that the obligations of developed countries in leading the global climate-finance effort will continue, emphasising that voluntary contributions by developing countries will not be conflated with the politics of country categorisation.
It could even enhance voluntary contributions from non-developed country parties by considering the creation of some kind of “sub-goal” for them, while making it clear this would be on the basis of solidarity and not an obligation.
Such language could serve as a political reset, helping to rebuild trust in the international climate finance system.
The post Guest post: Why some ‘developing’ countries are already among largest climate-finance contributors appeared first on Carbon Brief.
Guest post: Why some ‘developing’ countries are already among largest climate-finance contributors
Al-Karim Govindji is the global head of public affairs for energy systems at DNV, an independent assurance and risk management provider, operating in more than 100 countries.
Optimism that this year may be less eventful than those that have preceded it have already been dealt a big blow – and we’re just weeks into 2026. Events in Venezuela, protests in Iran and a potential diplomatic crisis over Greenland all spell a continuation of the unpredictability that has now become the norm.
As is so often the case, it is impossible to separate energy and the industry that provides it from the geopolitical incidents shaping the future. Increasingly we hear the phrase ‘the past is a foreign country’, but for those working in oil and gas, offshore wind, and everything in between, this sentiment rings truer every day. More than 10 years on from the signing of the Paris Agreement, the sector and the world around it is unrecognisable.
The decade has, to date, been defined by a gritty reality – geopolitical friction, trade barriers and shifting domestic priorities – and amidst policy reversals in major economies, it is tempting to conclude that the transition is stalling.
Truth, however, is so often found in the numbers – and DNV’s Energy Transition Outlook 2025 should act as a tonic for those feeling downhearted about the state of play.
While the transition is becoming more fragmented and slower than required, it is being propelled by a new, powerful logic found at the intersection between national energy security and unbeatable renewable economics.
A diverging global trajectory
The transition is no longer a single, uniform movement; rather, we are seeing a widening “execution gap” between mature technologies and those still finding their feet. Driven by China’s massive industrial scaling, solar PV, onshore wind and battery storage have reached a price point where they are virtually unstoppable.
These variable renewables are projected to account for 32% of global power by 2030, surging to over half of the world’s electricity by 2040. This shift signals the end of coal and gas dominance, with the fossil fuel share of the power sector expected to collapse from 59% today to just 4% by 2060.
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Conversely, technologies that require heavy subsidies or consistent long-term policy, the likes of hydrogen derivatives (ammonia and methanol), floating wind and carbon capture, are struggling to gain traction.
Our forecast for hydrogen’s share in the 2050 energy mix has been downgraded from 4.8% to 3.5% over the last three years, as large-scale commercialisation for these “hard-to-abate” solutions is pushed back into the 2040s.
Regional friction and the security paradigm
Policy volatility remains a significant risk to transition timelines across the globe, most notably in North America. Recently we have seen the US pivot its policy to favour fossil fuel promotion, something that is only likely to increase under the current administration.
Invariably this creates measurable drag, with our research suggesting the region will emit 500-1,000 Mt more CO₂ annually through 2050 than previously projected.
China, conversely, continues to shatter energy transition records, installing over half of the world’s solar and 60% of its wind capacity.
In Europe and Asia, energy policy is increasingly viewed through the lens of sovereignty; renewables are no longer just ‘green’, they are ‘domestic’, ‘indigenous’, ‘homegrown’. They offer a way to reduce reliance on volatile international fuel markets and protect industrial competitiveness.
Grids and the AI variable
As we move toward a future where electricity’s share of energy demand doubles to 43% by 2060, we are hitting a physical wall, namely the power grid.
In Europe, this ‘gridlock’ is already a much-discussed issue and without faster infrastructure expansion, wind and solar deployment will be constrained by 8% and 16% respectively by 2035.
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This pressure is compounded by the rise of Artificial Intelligence (AI). While AI will represent only 3% of global electricity use by 2040, its concentration in North American data centres means it will consume a staggering 12% of the region’s power demand.
This localized hunger for power threatens to slow the retirement of fossil fuel plants as utilities struggle to meet surging base-load requirements.
The offshore resurgence
Despite recent headlines regarding supply chain inflation and project cancellations, the long-term outlook for offshore energy remains robust.
We anticipate a strong resurgence post-2030 as costs stabilise and supply chains mature, positioning offshore wind as a central pillar of energy-secure systems.
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A new trend is also emerging in behind-the-meter offshore power, where hybrid floating platforms that combine wind and solar will power subsea operations and maritime hubs, effectively bypassing grid bottlenecks while decarbonising oil and gas infrastructure.
2.2C – a reality check
Global CO₂ emissions are finally expected to have peaked in 2025, but the descent will be gradual.
On our current path, the 1.5C carbon budget will be exhausted by 2029, leading the world toward 2.2C of warming by the end of the century.
Still, the transition is not failing – but it is changing shape, moving away from a policy-led “green dream” toward a market-led “industrial reality”.
For the ocean and energy sectors, the strategy for the next decade is clear. Scale the technologies that are winning today, aggressively unblock the infrastructure bottlenecks of tomorrow, and plan for a future that will, once again, look wholly different.
The post For proof of the energy transition’s resilience, look at what it’s up against appeared first on Climate Home News.
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A new MIT Global Change Outlook finds current climate policies and economic indicators put the world on track for dangerous warming.
After yet another international climate summit ended last fall without binding commitments to phase out fossil fuels, a leading global climate model is offering a stark forecast for the decades ahead.
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The head of the United Nations body governing the global shipping industry has said that greenhouse gases from the global shipping industry will fall, whether or not the sector’s “Net Zero Framework” to cut emissions is adopted in October.
Arsenio Dominguez, secretary-general of the International Maritime Organization, told a new year’s press conference in London on Friday that, even if governments don’t sign up to the framework later this year as planned, the clean-up of the industry responsible for 3% of global emissions will continue.
“I reiterate my call to industry that the decarbonisation has started. There’s lots of research and development that is ongoing. There’s new plans on alternative fuels like methanol and ammonia that continue to evolve,” he told journalists.
He said he has not heard any government dispute a set of decarbonisation goals agreed in 2023. These include targets to reduce emissions 20-30% on 2008 levels by 2030 and then to reach net zero emissions “by or around, i.e. close to 2050”.
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Dominguez said the 2030 emissions reduction target could be reached, although a goal for shipping to use at least 5% clean fuels by 2030 would be difficult to meet because their cost will remain high until at least the 2030s. The goals agreed in 2023 also included cutting emissions by 70-80% by 2040.
In October 2025, a decision on a proposed framework of practical measures to achieve the goals, which aims to incentivise shipowners to go green by taxing polluting ships and subsidising cleaner ones, was postponed by a year after a narrow vote by governments.
Ahead of that vote, the US threatened governments and their officials with sanctions, tariffs and visa restrictions – and President Donald Trump called the framework a “Green New Scam Tax on Shipping”.
Dominguez said at Friday’s press conference that he had not received any official complaints about the US’s behaviour at last October’s meeting but – without naming names – he called on nations to be “more respectful” at the IMO. He added that he did not think the US would leave the IMO, saying Washington had engaged constructively on the organisation’s budget and plans.
EU urged to clarify ETS position
The European Union – along with Brazil and Pacific island nations – pushed hard for the framework to be adopted in October. Some developing countries were concerned that the EU would retain its charges for polluting ships under its emissions trading scheme (ETS), even if the Net Zero Framework was passed, leading to ships travelling to and from the EU being charged twice.
This was an uncertainty that the US and Saudi Arabia exploited at the meeting to try and win over wavering developing countries. Most African, Asian and Caribbean nations voted for a delay.
On Friday, Dominguez called on the EU “to clarify their position on the review of the ETS, in order that as we move forward, we actually don’t have two systems that are going to be basically looking for the same the same goal, the same objective.”
He said he would continue to speak to EU member states, “to maintain the conversations in here, rather than move forward into fragmentation, because that will have a very detrimental effect in shipping”. “That would really create difficulties for operators, that would increase the cost, and everybody’s going to suffer from it,” he added.
The IMO’s marine environment protection committee, in which governments discuss climate strategy, will meet in April although the Net Zero Framework is not scheduled to be officially discussed until October.
The post IMO head: Shipping decarbonisation “has started” despite green deal delay appeared first on Climate Home News.
IMO head: Shipping decarbonisation “has started” despite green deal delay
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