Developing countries are receiving just a fraction of the international finance they need to prepare citizens and adapt infrastructure for escalating climate impacts.
That is according to the latest adaptation gap report from the UN Environment Programme (UNEP), which calculates that developing nations will need more than $310bn annually between now and 2035 to prepare for the impacts of climate change.
And yet, in 2023, developed nations provided just $26bn in international adaptation finance to developing nations, according to the report.
UNEP warns that, under current trends, developed nations are on track to miss their goal – agreed at the COP26 climate summit in Glasgow – of doubling 2019 international adaptation finance by 2025.
It cautions that countries’ more recent climate-finance pledge for 2035 – the new collective quantified goal (NCGQ) – will be “insufficient” to meet adaptation finance needs.
The UN report – entitled, “Running on empty: The world is gearing up for climate resilience without the money to get there” – also explores how countries are integrating adaptation priorities into national climate plans, policies and practices.
It finds that 87% of countries have at least one national adaptation plan or strategy in place, but warns that gaps remain in the implementation of measures.
Inger Andersen, the executive director of UNEP, says: “Even amid tight budgets and competing priorities, the reality is simple: if we do not invest in adaptation now, we will face escalating costs every year.”
Below, Carbon Brief summarises some of the key takeaways from the report.
- Developed countries are on track to miss their 2025 adaptation finance goal
- Developing nations’ adaptation finance needs are 12 times greater than current flows
- A majority of countries have a national adaptation plan or strategy in place
- Implementation of adaptation measures is progressing – but gaps remain
- The NCQG is insufficient on its own to meet adaptation finance needs
Developed countries are on track to miss their 2025 adaptation finance goal
Climate change adaptation refers to a range of measures that reduce society’s and infrastructure’s vulnerability to climate change, from planting crop varieties that can withstand greater heat through to building stronger defences against floods.
Spending from the public funds of developed nations is a key source of finance for these actions in developing nations, especially for low-income countries that are vulnerable to climate impacts.
Under Article 9 of the Paris Agreement, developed countries agreed to achieve a “balance” in the amount of climate finance raised for emissions reduction and adaptation. However, more money has been raised for cutting emissions than preparing for climate impacts.
UNEP’s adaptation gap report notes that, in 2023, the amount of public money channelled to developing countries from richer nations for adaptation measures fell.
In total, developed countries raised $25.9bn in international adaptation finance – marking a decline on the $27.9bn recorded in 2022.
The report authors attribute the fall to a decline in funding from multilateral development banks, such as the World Bank, which provided more than half – 57% – of international adaptation finance.
The table below shows how adaptation finance provided by developed countries for developing countries (orange) dipped in 2023 – despite an uptick in climate finance as a whole.
The UN warns that, if current trends continue, developed nations are set to miss their goal of doubling 2019 adaptation finance flows by 2025.
This goal – set out in the Glasgow Climate Pact agreed at the COP26 climate summit in 2021 – commits developed nations to providing $40bn in adaptation funding for developing nations by 2025.
Official climate-finance figures from the Organisation for Economic Co-operation and Development (OECD) for 2025 will not be available for several years. However, the report notes that, over 2019-23, international adaptation finance grew at a compound rate of 7% – falling short of the 12% rate required to meet the Glasgow Climate Pact goal.
Cuts to international aid budgets since 2023 are also threatening the Glasgow Climate Pact goal, according to the report authors. They note that, globally, foreign aid fell by 9% in 2024 and predict that reductions announced in 2025 are “likely” to lead to a further 9-17% decline.
Meanwhile, countries’ more recent pledge to help raise $300bn a year by 2035 for both tackling and adapting to climate change – set out in the new collective quantified goal for climate finance (NCQG), agreed last year at COP29 in Baku – is also under threat, according to the report.
In the introduction of the report, UNEP’s Anderson writes:
“While the numbers for 2024 and 2025 are not yet available, one thing is clear: unless trends in adaptation financing do not turn around, which currently seems unlikely, the Glasgow Climate Pact goal will not be achieved, the NCQG will not be achieved and many more people will suffer needlessly.”
‘Adaptation investment trap’
The report also breaks down international adaptation finance in 2023 by funding type. It finds that that 70% was either grants, which allow countries to address climate impacts without exacerbating debt, or “concessional” loans, which are provided at below market rate.
However, it notes that “non-consessional” finance – which is provided at, or near, market rates – is on the rise, growing at an annual compound rate of 7% over 2019-23. In 2023, non-concessional loans exceeded concessional ones for the first time, the report notes.
The “increasing proportion” of non-concessional finance raises “long-term affordability and equity” concerns, the authors warn. They also point to the risk of an “adaptation investment trap” – whereby rising climate disasters increase developing countries’ “indebtedness”, which subsequently makes it harder for them to invest in adaptation.
The report also finds that loans and other forms of “debt instruments” comprised “58% on average” of international adaptation finance in 2022-23.
The NCQG text highlights the need for “concessional” and “non-debt creating” finance.
(This came after strong calls from many developing countries to exclude “non-concessional” loans – which result in wealth flowing back to the donor countries as loan repayments and interest – as a form of climate finance. Analysis has shown that many developing countries are spending more on servicing debts than they receive in climate finance.)
Elsewhere, the authors also find that funding for new adaptation projects through UN Framework Convention on Climate Change (UNFCCC) funds (the adaptation fund, green climate fund (GCF) and the least developed countries fund (LDCF) and special climate change fund (SCCF) managed by the Global Environment Facility) saw a “large spike” in 2024, with grants reaching around $920m.
However, they note that the recent increase “may not be a trend, with financial constraints likely to rise beyond 2025”.
Developing nations’ adaptation finance needs are 12 times greater than current flows
While previous UN adaptation gap reports have investigated adaptation finance shortfalls through to 2030, this latest analysis extends its estimates through to 2035.
This is in light of the NCQG, which states that developed countries should “take the lead” in raising “at least $300bn” a year for climate action in developing countries by 2035.
The report calculates that the costs of adaptation by 2035 for developing countries sit in a “plausible central range” of $310-365bn annually. It explains that it has arrived at this range based on “two lines of evidence”:
- A modelled estimate of the additional costs of adaptation, calculated using “global sectoral models with national-level resolution”. This exercise pins the cost of adaptation for developing countries at $310bn a year by 2035 under an intermediate emissions scenario.
- An analysis of the climate finance needs set out by developing countries in 97 national adaptation plans and nationally determined contributions (NDCs) submitted to the UNFCCC – with “extrapolation” of this data to all 155 developing countries. This results in the upper figure of $365bn per year up to 2035.
The chart below shows the disparity between existing finance flows (dark blue bar) and adaptation finance needs and modelled costs (red bars).
With current levels of international adaptation finance estimated at $26bn a year, the report calculates that developing countries are facing an “adaptation finance gap” in the range of $284-339bn per year by 2035.
As such, it calculates that the adaptation finance needs of developing countries by 2035 are “12-14 times” as much as current finance flows.
Of the public adaptation finance that has been issued, a higher proportion currently goes to the countries most exposed to climate hazards, according to the report. It notes that, in 2022-23, $10.4bn and $1.2bn was allocated to least-developed countries (LDCs), including Afghanistan and Rwanda, and small island developing states (SIDS), such as Tuvalua and the Marshall Islands, respectively.
Nevertheless, finance provided to these climate-vulnerable nations is still “modest relative to needs”, the report warns. It estimates that the adaptation finance needs of LDCs and SIDS are $50bn a year.
It also finds that per-capita adaptation finance to both country groups was lower in 2022-23 than previous years, at $9 for LDCs and $20 in SIDs.
A majority of countries have a national adaptation plan or strategy in place
Under the framework for the global goal on adaptation agreed at COP28, countries said they would put in place “national adaptation plans, policy instruments and planning processes and/or strategies” by 2030.
To assess the “global status” of national adaptation planning, the authors of the report tracked the publication of national plans, strategies and policies for adaptation in each country.
According to the report, the first national adaptation policy was published in 2002. It finds that there was a “notable acceleration” in countries developing national adaptation planning instruments over 2011-21, but says that, since then, progress has “slowed significantly”.
According to the report, 87% of countries had at least one national adaptation policy, strategy or plan in place as of 31 August 2025. However, 36 of these 172 countries’ plans are “expired” or “outdated”.
Meanwhile, 25 countries had no national adaptation plan at all, according to the report. It explains that these are “predominantly developing countries, suggesting that financial, technical and human resource constraints inhibit national adaptation planning”.
Of these countries without plans, 21 have “initiated a process to develop” a national adaptation plan, according to the report. However, it notes that many of these countries have “been in this process for a long time”.
The chart below shows the percentage of countries from different “country classifications” that have no national adaptation planning instrument in place (red), an expired adaptation planning instrument in place (yellow) and a valid instrument in place (green).
The report also discusses different types of adaptation “mainstreaming”. This is defined by the report authors as the “integration of adaptation objectives and climate risk considerations into the established functions, policy and practice of government institutions to build climate resilience”.
The authors list six different mainstreaming strategies. For example, “directed” mainstreaming means “dedicating funding, staff capacity-building and resources specifically to adaptation, including through financial frameworks and fiscal processes such as budget planning”.
Another example is “regulatory mainstreaming”, which means “modifying the formal or informal policy instruments such as legislation, frameworks, strategies and plans by integrating adaptation”.
According to the report, only regulatory mainstreaming is captured by the framework for the global goal on adaptation’s target related to planning.
The report also outlines the different “levels” of mainstreaming. These range from “prioritisation”, which it describes as a strong level of mainstreaming in which adaptation takes precedence over existing policy goals, to “coordination”, in which adaptation “is recognised as a policy goal, but is secondary to existing priorities”.
However, the report says there is “presently no agreement on how to measure and assess the outcomes of mainstreaming”.
Implementation of adaptation measures is progressing – but gaps remain
Under the UN “enhanced transparency framework”, countries are required to submit information about their climate progress in biennial transparency reports (BTR). The first report was due at the end of 2024.
The adaptation gap report calls BTRs the “most comprehensive national source of information on adaptation implementation worldwide available”.
The report says that 105 countries had submitted BRTs as of 31 August 2025, of which 94 include details about adaptation
The authors find that 75 of these BTRs mention gender in relation to adaptation. However, only 4% of the results reported through BTRs are directly related to “gender and social inclusion”.
The report also highlights the “uneven coverage” of BTRs globally. According to the report, 88% of developed countries have submitted a BTR, compared to only 37% of developing countries.
It adds that there are further inequalities within the bracket of “developing countries”. Only 21% of SIDS and 14% of LDCs have submitted BTRs with “detailed information on climate impacts and adaptation”, according to the report.
This could “indicate that preparing national reports such as BTRs is most burdensome for the countries with the least capacity”, the report authors suggest.
The map below shows the countries that have submitted a BTR including “detailed information on climate impacts and adaptation” (blue) and those that have not (grey). For the former category, darker blue indicates that the country’s BTR includes more segments of text (data points) about climate impacts and adaptation.
The report finds that countries are “disproportionately reporting on climate hazards, systems at risk, climate change impacts and adaptation priorities” in BTRs. Meanwhile, only 15% and 7% of the data points in the map above discuss adaptation “actions” and “results” respectively.
In total, the report identifies 1,640 “adaptation actions” across 68 BTRs. It says that 23% of these are related to “biodiversity and ecosystems”, 18% to “infrastructure and human settlements”, 16% to “water and sanitation” and 14% to “food and agriculture”.
However, it finds that actions targeting health and poverty alleviation or livelihoods are each accounting for only 5%, while those addressing cultural heritage are “nearly absent” and account for less than 1% of all reported actions.
In a separate analysis, the report explores documents submitted by developing countries to the UNFCCC to understand how adaptation needs break down by sector. It finds that the 55 plans submitted by developing countries which include “detailed sectoral information” reveal that the agriculture and food sector and water supply are “common priorities across all regions, though they vary in terms of their relative importance”.
The NCQG is insufficient on its own to meet adaptation finance needs
At COP29 last year, developed nations pledged to raise at least $300bn per year under the NCQG for both mitigation and adaptation.
The report says that, although the target “appears significantly higher than the previous goal for developed countries to mobilise $100bn by 2020 for developing countries”, it is still “clearly insufficient” to meet adaptation finance needs in 2035.
The report sets out two reasons for this.
First, the authors explain that the $300bn target is not adjusted for inflation. It says that adaptation costs for developing countries are currently estimated at $310-365bn annually until 2035, based on costs in 2023. However, when adjusting for an inflation rate of 3% per year for the next decade, this number rises to US$440–520bn by 2035.
(In an analysis published last year, Carbon Brief noted that the $300bn target does not account for inflation.)
The plot below shows the effect of inflation on adaptation finance needs (dark blue) and modelled costs (light blue). It also shows the NCQG goal, accounting for inflation, based on 2023 costs (red) and without inflation based on 2035 costs (pink). It also shows the NCQG goal of $300bn by 2035 (yellow).
Second, it notes that the NCQG covers both mitigation – namely, efforts to cut emissions – and adaptation. So far, it warns that no “subgoal” has been agreed to determine how much money goes to each.
The report authors have also developed two scenarios exploring how much the NCQG would bridge the adaptation finance gap, if the $300bn target is met, both of which account for inflation. These are:
- A “minimum adaptation scenario”. The authors assume that 26% of the NCQG money will be used for adaptation finance as this is the percentage of all international climate finance that was spent on adaptation over 2011-20. Based on historical proportioning of finance, $3bn of the resulting $78bn this would go to SIDS and the rest to $25bn to LDCs.
- A “maximum adaptation scenario”. Under this scenario, the Glasgow Pact and Baku to Belém Roadmap are achieved, meaning that adaptation funding reaches $40bn annually by 2025 and $120bn annually by 2030. They also assume that adaptation finance grows by 7% per year, reaching $166bn by 2035 – more than half of the NCGQ finance goal of $300bn. Under this scenario, SIDS would receive $6bn in adaptation funding by 2035 and LDCs would receive $55bn.
The report concludes that, even if the NCQG is achieved, a “significant adaptation finance gap” is likely to remain in 2035 “regardless of the share of international public climate finance that will flow towards adaptation”.
Meanwhile, the report notes that private-sector finance can help “fill the adaptation finance gap” – but cautions that its overall contribution is likely to be “modest”.
The “realistic” potential for private-sector investment, according to the report, is $50bn per year by 2035 – a figure it estimates would cover 15-20% of overall estimated needs.
Reaching this level of private-sector finance will require “targeted policy action” given that current private-sector flows to “publicly identified” adaptation priorities in 2023 are estimated at $5bn, it notes.
Furthermore, UNEP warns that many proposed approaches for raising private-sector funds for adaptation measures pass “most of the costs of adaptation back to developing countries or households”.
The post UN report: Five charts which explain the ‘gap’ in finance for climate adaptation appeared first on Carbon Brief.
UN report: Five charts which explain the ‘gap’ in finance for climate adaptation
Greenhouse Gases
DeBriefed 12 December: EU under ‘pressure’; ‘Unusual warmth’ explained; Rise of climate boardgames
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
EU sets 2040 goal
CUT CRUNCHED: The EU agreed on a legally binding target to reduce greenhouse gas emissions by 90% from 1990 levels by 2040, reported the EU Observer. The publication said that this agreement is “weaker” than the European Commission’s original proposal as it allows for up to five percentage points of a country’s cuts to be achieved by the use of foreign carbon credits. Even in its weakened form, the goal is “more ambitious than most other major economies’ pledges”, according to Reuters.
PETROL CAR U-TURN: Commission president Ursula von der Leyen has agreed to “roll back an imminent ban on the sale of new internal combustion-engined cars and vans after late-night negotiations with the leader of the conservative European People’s Party,” reported Euractiv. Car makers will be able to continue selling models with internal combustion engines as long as they reduce emissions on average by 90% by 2035, down from a previously mandated 100% cut. Bloomberg reported that the EU is “weighing a five-year reprieve” to “allow an extension of the use of the combustion engine until 2040 in plug-in hybrids and electric vehicles that include a fuel-powered range extender”.
CORPORATE PRESSURE: Reuters reported that EU countries and the European parliament struck a deal to “cut corporate sustainability laws, after months of pressure from companies and governments”. It noted that the changes exempt businesses with fewer than 1,000 employees from reporting their environmental and social impact under the corporate sustainability reporting directive. The Guardian wrote that the commission is also considering a rollback of environment rules that could see datacentres, artificial intelligence (AI) gigafactories and affordable housing become exempt from mandatory environmental impact assessments.
Around the world
- EXXON BACKPEDALS: The Financial Times reported on ExxonMobil’s plans to “slash low-carbon spending by a third”, amounting to a reduction of $10bn over the next 5 years.
- VERY HOT: 2025 is “virtually certain” to be the second or third-hottest year on record, according to data from the EU’s Copernicus Climate Change Service, covered by the Guardian. It reported that global temperatures from January-November were, on average, 1.48C hotter than preindustrial levels.
- WEBSITE WIPE: Grist reported that the US Environmental Protection Agency has erased references to the human causes of climate change from its website, focusing instead on “natural processes”, such as variations in the Earth’s orbit. On BlueSky, Carbon Brief contributing editor Dr Zack Labe described the removal as “absolutely awful”.
- UN REPORT: The latest global environment outlook, a largest-of-its-kind UN environment report, “calls for a new approach to jointly tackle the most pressing environmental issues including climate change and biodiversity loss”, according to the Associated Press. However, report co-chair Sir Robert Watson told BBC News that a “small number of countries…hijacked the process”, diluting its potential impact.
$80bn
The amount that Chinese firms have committed to clean technology investments overseas in the past year, according to Reuters.
Latest climate research
- Increases in heavy rainfall and flooding driven by fossil-fuelled climate change worsened recent floods in Asia | World Weather Attribution
- Human-caused climate change played a “substantial role” in driving wildfires and subsequent smoke concentrations in the western US between 1992-2020 | Proceedings of the National Academy of Sciences
- Thousands of land vertebrate species over the coming decades will face extreme heat and “unsuitable habitats” throughout “most, or even all” of their current ranges | Global Change Biology
(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Monday, Tuesday, Wednesday, Thursday and Friday.)
Captured
The years 2023 and 2024 were the warmest on record – and 2025 looks set to join them in the top three. The causes of this apparent acceleration in global warming have been subject to a lot of attention in both the media and the scientific community. The charts above, drawn from a new Carbon Brief analysis, show how the natural weather phenomenon El Niño, sulphur dioxide (SO2) emissions from shipping, Chinese SO2, an eruption from the Hunga Tonga-Hunga Ha’apai volcano and solar cycle changes account for most of the “unusual warmth” of recent years. Dark blue bars represent the contribution of individual factors and their uncertainties (hatched areas), the light blue bar shows the combined effects and combination of uncertainties and the red bar shows the actual warming, compared with expectations.
Spotlight
Climate change boardgames
This week, Carbon Brief reports on the rise of climate boardgames.
Boardgames have always made political arguments. Perhaps the most notorious example is the Landlord’s Game published by US game designer and writer Lizzie Magie in 1906, which was designed to persuade people of the need for a land tax.
This game was later “adapted” by US salesman Charles Darrow into the game Monopoly, which articulates a very different set of values.
In this century, game designers have turned to the challenge of climate change.
Best-selling boardgame franchise Catan has spawned a New Energies edition, where players may choose to “invest in clean energy resources or opt for cheaper fossil fuels, potentially causing disastrous effects for the island”.
But perhaps the most notable recent release is 2024’s Daybreak, which won the prestigious Kennerspiel des Jahre award (the boardgaming world’s equivalent of the Oscars).
Rolling the dice
Designed by gamemakers Matteo Menapace and Matt Leacock, Daybreak sees four players take on the role of global powers: China, the US, Europe and “the majority world”, each with their own strengths and weaknesses.
Through playing cards representing policy decisions and technologies, players attempt to reach “drawdown”, a state where they are collectively producing less CO2 than they are removing from the atmosphere.
“Games are good at modelling systems and the climate crisis is a systemic crisis,” Daybreak co-designer Menapace told Carbon Brief.
In his view, boardgames can be a powerful tool for getting people to think about climate change. He said:
“In a video game, the rules are often hidden or opaque and strictly enforced by the machine’s code. In contrast, a boardgame requires players to collectively learn, understand and constantly negotiate the rules. The players are the ‘game engine’. While videogames tend to operate on a subconscious level through immersion, boardgames maintain a conscious distance between players and the material objects they manipulate.
“Whereas videogames often involve atomised or heavily mediated social interactions, boardgames are inherently social experiences. This suggests that playing boardgames may be more conducive to the exploration of conscious, collective, systemic action in response to the climate crisis.”
Daybreak to Dawn
Menapace added that he is currently developing “Dawn”, a successor to Daybreak, building on lessons he learned from developing the first game, telling Carbon Brief:
“I want the next game to be more accessible, especially for schools. We learned that there’s a lot of interest in using Daybreak in an educational context, but it’s often difficult to bring it to a classroom because it takes quite some time to set up and to learn and to play.
“Something that can be set up quickly and that can be played in half the time, 30 to 45 minutes rather than an hour [to] an hour and a half, is what I’m currently aiming for.”
Dawn might also introduce a new twist that explores whether countries are truly willing to cooperate on solving climate change – and whether “rogue” actors are capable of derailing progress, he continued:
“Daybreak makes this big assumption that the world powers are cooperating, or at least they’re not competing, when it comes to climate action. [And] that there are no other forces that get in the way. So, with Dawn, I’m trying to explore that a bit more.
“Once the core game is working, I’d like to build on top of that some tensions, maybe not perfect cooperation, [with] some rogue players.”
Watch, read, listen
WELL WATCHERS: Mother Jones reported on TikTok creators helping to hold oil companies to account for cleaning up abandoned oil wells in Texas.
RUNNING SHORT: Wired chronicled the failure of carbon removal startup Running Tide, which was backed by Microsoft and other tech giants.
PARIS IS 10: To mark the 10th anniversary of the Paris Agreement, climate scientist Prof Piers Forster explained in Climate Home News “why it worked” and “what it needs to do to survive”.
Coming up
- 15-19 December: American Geophysical Union (AGU) annual meeting, New Orleans
- 15-19 December: 70th Meeting of the Global Environment Facility (Gef) Council, online
- 16 December: International Energy Agency: Future of electricity in the Middle East and North Africa webinar, online
Pick of the jobs
- Natural Resources Wales, senior strategic environmental policy specialist | Salary: Unknown. Location: Wales (hybrid)
- The Nature Conservancy, director of conservation – Mata Atlântica | Salary: Unknown. Location: São Paulo, Belo Horizonte, Rio de Janeiro and nearby cities, Brazil
- Barcelona Supercomputing Centre, postdoctoral researcher – downscaling for climate services | Salary: Unknown. Location: Barcelona, Spain
DeBriefed is edited by Daisy Dunne. Please send any tips or feedback to debriefed@carbonbrief.org.
This is an online version of Carbon Brief’s weekly DeBriefed email newsletter. Subscribe for free here.
The post DeBriefed 12 December: EU under ‘pressure’; ‘Unusual warmth’ explained; Rise of climate boardgames appeared first on Carbon Brief.
DeBriefed 12 December: EU under ‘pressure’; ‘Unusual warmth’ explained; Rise of climate boardgames
Greenhouse Gases
‘Cali Fund’ aiming to raise billions for nature receives first donation – of just $1,000
A major biodiversity fund – which could, in theory, generate billions of dollars annually for conservation – received its first donation of just $1,000 in November.
The Cali Fund was created under the UN Convention on Biological Diversity (CBD) at the COP16 nature negotiations in Cali, Colombia, last year.
On 19 November, nine months after the fund officially launched, UK start-up TierraViva AI put forward the first contribution.
The $1,000 payment is an “ice-breaker”, the company’s chief executive tells Carbon Brief, aimed at encouraging others “who may be hesitating” to pay in.
The fund is designed to be a way for companies that rely on nature’s genetic resources to share some of their earnings with the developing, biodiverse countries where many of the original resources are found.
Companies use genetic data from these materials to develop products, such as vaccines and skin cream.
One expert describes the $1,000 as a good “first step”, but says it is “time for larger actors to step forward”. Another says it “squarely points the finger to the profit-making enterprises that are not contributing”.
The CBD is “pleased” about the first payment, a spokesperson tells Carbon Brief, adding that “many discussions” are ongoing about future donations.
Funding biodiversity action
Companies all around the world use genetic materials from plants, animals, bacteria and fungi often found in biodiversity-rich, global south countries to develop their products.
There are existing rules in place to secure consent and ensure compensation if companies or researchers travel to a country to physically gather these materials.
Today, however, much of this information is available in online databases – with few rules in place around access. This genetic data is known as digital sequence information (DSI).
The Cali Fund is part of an effort to close this loophole.
The COP16 agreement on the creation of the fund outlined that large companies in several sectors, including pharmaceutical, cosmetic, biotechnology, agribusiness and technology, “should” contribute a cut of the money they earn from the use of these materials. (See: Carbon Brief’s infographic on DSI.)
The money is intended to fund biodiversity action, with 50% of resources going to Indigenous peoples and local communities who protect vast swathes of the world’s nature and biodiversity.
These contributions, however, are voluntary.
The fund officially launched at the resumed COP16 negotiations in Rome in February 2025, where a spokesperson for the CBD said that first contributions could be announced in spring.
However, Carbon Brief reported in August that the fund was still empty.
On 19 November, the first contribution was announced during the COP30 UN climate summit. At $1,000, the amount was significantly lower than the potential millions that larger companies could pay in.
A UK government press release described it as a “major milestone” that will “pav[e] the way for others to do the same and mobilise private sector finance for nature at scale”.
The payment was an “expression of our commitment to the objectives of the Cali Fund”, TierraViva AI chief executive Dr Paul Oldham wrote in a letter to the executive secretary of the CBD, Astrid Schomaker.
The $1,000 is an “initial contribution”, Oldham said, and the company plans to give more “as our business grows”. Based in the UK with a team of programmers in Nairobi, TierraViva AI was set up in 2023 and uses AI to support conservation.
An anthropologist who worked on Indigenous peoples’ rights in the Amazon, Oldham’s research helped inform the list of sectors most likely to “directly or indirectly benefit from the use of DSI”, including “generative biology” and AI companies.
Oldham noted in a speech at the sidelines of COP30 that although the company’s earnings are not large enough to meet the contribution thresholds set out in the Cali Fund agreement, its contribution showed that companies “of any size” can pay in.
He tells Carbon Brief that while “some” companies “are not serious about contributing and are seeking to delay” paying into the fund, others have different concerns, including the “need for a level playing field” and positive incentives to contribute:
“This will be hard-earned company money, so it’s reasonable enough to imagine that one of the first questions companies will want an answer to is: ‘well, what is this actually going to be spent on?’ And: ‘what is the benefit of this to us’, which is likely to vary by sector.
“In my view, the best way forward would be for companies that can to make contributions. That would give everybody, including governments, confidence that there might be constructive ways to address difficult topics.”
Future contributions
A spokesperson for the CBD tells Carbon Brief:
“We are pleased that the Cali Fund is not only ‘open for business’, but that this first contribution also demonstrates it is fully operational. We thank and congratulate TierraViva AI for being the first company to step up.”
“Many discussions” are ongoing around future donations to the fund, the spokesperson says, and the CBD is “hopeful that further announcements can be made soon”, ahead of the next UN biodiversity summit, COP17, in October 2026.
Asked whether the CBD was expecting more contributions at this stage, the spokesperson says the fund was set up in “very short order” and that the first payment shows that companies are “able to contribute”.
US biotechnology company Ginkgo Bioworks was the first to pledge to contribute to the fund earlier this year, but has so far not put forward any money. The company did not respond to Carbon Brief’s request for comment.
Carbon Brief reported earlier this year that at least two companies were contacted by a UK department with opportunities to be involved in the Cali Fund before its launch in February, but no company took up on the offer.
The first contribution coming from a “startup that has just begun operations squarely points the finger to the profit-making enterprises that are not contributing”, Dr Siva Thambisetty, associate professor of law at the London School of Economics, tells Carbon Brief. Thambisetty adds:
“Strident cries of lack of legal certainty, unfairness or stacking obligations [combining responsibilities from different agreements and laws] would be more credible if industry organisations encouraged large firms that use DSI to begin contributing, instead of denying the last 20 years of multilateral [negotiations] that have led to this point.”
Dr June Rubis – Indigenous peoples and local communities (IPLC) lead from Asia on the Cali Fund’s steering committee – welcomes TierraViva AI’s “first step”, but tells Carbon Brief that the “real test lies ahead” and that it is “now time for larger actors to step forward”.
She says the Cali Fund offers “clarity” on how the private sector can directly increase support to UN-backed funds at a time when “states are retreating” from their climate and biodiversity finance obligations:
“It’s not a voluntary offsetting scheme or a…risky or fringe fund; it’s a multilateral mechanism designed to meet the highest fiduciary and equity standards. We invite companies to see this not as philanthropy, but as participation in a globally endorsed system where trust is institutionalised, benefits are traceable and equity is operationalised.
“Contributing to the Cali Fund isn’t just ethical, it’s strategic. [But] It’s about more than funding: it’s about trust, power-sharing and making sure IPLCs are part of the decisions, not just the outcomes.”
The post ‘Cali Fund’ aiming to raise billions for nature receives first donation – of just $1,000 appeared first on Carbon Brief.
‘Cali Fund’ aiming to raise billions for nature receives first donation – of just $1,000
A scenario that meets the “net-zero by 2050” goal would be the “cheapest” option for the UK, according to modelling by the National Energy System Operator (NESO).
In a new report, the organisation that manages the UK’s energy infrastructure says its “holistic transition” scenario would have the lowest cost over the next 25 years, saving £36bn a year – some 1% of GDP – compared to an alternative scenario that slows climate action.
These savings are from lower fuel costs and reduced climate damages, relative to a scenario where the UK fails to meet its climate goals, known as “falling behind”.
The UK will need to make significant investments to reach net-zero, NESO says, but this would cut fossil-fuel imports, support jobs and boost health, as well as contributing to a safer climate.
Slowing down these efforts would reduce the scale of investments needed, but overall costs would be higher unless the damages from worsening climate change are “ignored”, the report says.
In an illusory world where climate damages do not exist, slowing the UK’s efforts to cut emissions would generate “savings” of £14bn per year on average – some 0.4% of GDP.
NESO says that much of this £14bn could be avoided by reaching net-zero more cheaply and that it includes costs unrelated to climate action, such as a faster rollout of data centres.
Notably, the report appears to include efforts to avoid the widespread misreporting of a previous edition, including in the election manifesto of the hard-right, climate-sceptic Reform UK party.
Overall, NESO warns that, as well as ignoring climate damages, the £14bn figure “does not represent the cost of achieving net-zero” and cannot be compared with comprehensive estimates of this, such as the 0.2% of GDP total from the UK’s Climate Change Committee (CCC).
Net-zero is the ‘cheapest option’
Every year, NESO publishes its “future energy scenarios”, a set of four pathways designed to explore how the nation’s energy system might change over the coming decades.
(Technically the scenarios apply to the island of Great Britain, rather than the whole UK, as Northern Ireland’s electricity system is part of a separate network covering the island of Ireland.)
Published in July, the scenarios test a series of questions, such as what it would mean for the UK to meet its climate goals, whether it is possible to do so while relying heavily on hydrogen and what would happen if the nation was to slow down its efforts to cut emissions.
The scenarios have a broad focus and do not only consider the UK’s climate goals. In addition, they also explore the implications of a rapid growth in electricity demand from data centres, the potential for autonomous driving and many other issues.
With so many questions to explore, the scenarios are not designed to keep costs to a minimum. In fact, NESO does not publish related cost estimates in most years.
This year, however, NESO has published an “economics annex” to the future energy scenarios. It last published a similar exercise in 2020, with the results being widely misreported.
In the new annex, NESO says that the UK currently spends around 10% of GDP on its energy system. This includes investments in new infrastructure and equipment – such as cars, boilers or power plants – as well as fuel, running and maintenance costs.
This figure is expected to decline to around 5% of GDP by 2050 under all four scenarios, NESO says, whether they meet the UK’s net-zero target or not.
For each scenario, the annex adds up the total of all investments and ongoing costs in every year out to 2050. It then adds an estimate of the economic damages from the greenhouse gas emissions that primarily come from burning fossil fuels, using the Treasury’s “green book”.
When all of these costs are taken into account, NESO says that the “cheapest” option is a pathway that meets the UK’s climate goals, including all of the targets on the way to net-zero by 2050.
It says this pathway, known as “holistic transition”, would bring average savings of £36bn per year out to 2050, relative to a pathway where the UK slows its efforts on climate change.
The overall savings, illustrated by the dashed line in the figure below, stem primarily from lower fuel costs (orange bars) and reduced climate damages (white bars).
Note that the carbon pricing that is already applied to power plants and other heavy industry under the UK’s emissions trading system (ETS) is excluded from running costs in the annex, appearing instead within the wider “carbon costs” category.
This makes the running costs of fossil-fuel energy sources seem cheaper than they really are, when including the ETS price.
Net-zero requires significant investment
While NESO says that its net-zero compliant “holistic transition” pathway is the cheapest option for the UK, it does require significant upfront investments.
The scale of the additional investments needed to stay on track for the UK’s climate goals, beyond a pathway where those targets are not met, is illustrated in the figure below.
This shows that the largest extra investments would need to be made in the power sector, such as by building new windfarms (shown by the dark yellow bars). This is followed by investment needs for homes, such as to install electric heat pumps instead of gas boilers (dark red bars).
These additional investments would amount to around £30bn per year out to 2050, but with a peak of as much as £60bn over the next decade.
These investments would be offset by lower fuel bills, including reduced gas use in homes (pale red) and lower oil use in transport (mid green).
Notably, NESO says it expects EVs to be cheaper to buy than petrol cars from 2027, meaning there are also significant savings in transport capital expenditure (“CapEx”, dark green).
Again, the biggest savings in “holistic transition” relative to “falling behind” would come from avoided climate damages – described by NESO as “carbon costs”.
Net-zero cuts fossil-fuel imports
In addition to avoided climate damages, NESO says that reaching the UK’s net-zero target would bring wider benefits to the economy, including lower fuel imports.
Specifically, it says that climate efforts would “materially reduce” the UK’s dependency on overseas gas, with imports falling to 78% below current levels by 2050 in “holistic transition”. Under the “falling behind” scenario, imports rise by 35%”, despite higher domestic production.
This finding, shown in the figure below, is the opposite of what has been argued by many of those that oppose the UK’s net-zero target.
NESO goes on to argue that the shift to net-zero would have wider economic benefits. These include a shift from buying imported fossil fuels to investing money domestically instead, which “could bring local economic benefits and support future employment”.
The operator says that there is the “potential for more jobs to be created than lost in the transition to net-zero” and that there would be risks to UK trade if it fails to cut emissions, given exports to the EU – the UK’s main trading partner – would be subject to the bloc’s new carbon border tax.
Beyond the economy, NESO points to studies finding that the transition to net-zero would have other benefits, including for human health and the environment.
It does not attempt to quantify these benefits, but points to analysis from the CCC finding that health benefits alone could be worth £2.4-8.2bn per year by 2050.
Investment is higher for net-zero than for ‘not-zero’
It is clear from the NESO annex that its net-zero compliant “holistic transition” pathway would entail significantly more upfront investment than if climate action is slowed under “falling behind”.
This idea, in effect, is the launchpad for politicians arguing that the UK should walk away from its climate commitments and stop building new low-carbon infrastructure.
As already noted, the NESO analysis shows that this would increase costs to the UK overall.
Still, NESO’s new report adds that “falling behind” would “save” £14bn a year – relative to meeting the UK’s net-zero target – as long as carbon costs are “ignored”.
Specifically, it says that ignoring carbon costs, “holistic transition” would cost an average of £14bn a year more out to 2050 than “falling behind”, which misses the net-zero target. This is equivalent to 0.4% of the UK’s GDP and is illustrated by the solid pink line in the figure below.
Some politicians are indeed now willing to ignore the problem of climate change and the damages caused by ongoing greenhouse gas emissions. These politicians may therefore be tempted to argue that the UK could “save” £14bn a year by scrapping net-zero.
However, NESO’s report cautions against this, stating explicitly that the “costs discussed here do not represent the cost of achieving net-zero emissions”. It says:
“Our pathways cannot provide firm conclusions over the relative costs attached to the choices between pathways…We reiterate that the costs discussed here do not represent the cost of achieving net-zero emissions.”
It says that the scenarios have not been designed to minimise costs and that it would be possible to reach net-zero more cheaply, for example by focusing more heavily on EVs and renewables instead of hydrogen and nuclear.
Moreover, it says that some of the difference in costs between “holistic transitions” and “falling behind” is unrelated to climate action. Specifically, it says that electricity demand from data centres is around twice as high in “holistic transitions”, adding some £5bn a year in costs in 2050.
In addition, NESO says that most of the “saving” in “falling behind” would be wiped out if fossil fuel prices are higher than expected – falling from £14bn per year to just £5bn a year – even before considering climate damages and wider benefits, such as for health.
Finally, NESO says that failing to make the transition to net-zero would leave the UK more exposed to fossil-fuel price shocks, such as the global energy crisis that added 1.8% to the nation’s energy costs in 2022. It says a similar shock would only cost 0.3% of GDP in 2050 if the country has reached net-zero – as in “holistic transition” – whereas costs would remain high in “falling behind”.
The post Net-zero scenario is ‘cheapest option’ for UK, says energy system operator appeared first on Carbon Brief.
Net-zero scenario is ‘cheapest option’ for UK, says energy system operator
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