Developing Nations Need $1 Trillion Per Year By 2030 For Climate Action, High-Level Group Reports

Negotiators at the UN climate conference in Azerbaijan should focus on mobilising $1 trillion per year by 2030 to help developing countries cope with the warming world and meet the Paris Agreement goals, a new report by the Independent High-Level Expert Group on Climate Finance said on Thursday.

This money, according to the group of international climate finance experts, is needed from both public and private sources.

The report comes a day after several wealthy nations, including Germany, Canada, France, and the Netherlands, acknowledged that trillions of dollars were urgently needed to address climate change and that wealthy nations should continue to lead in providing climate finance.

As countries negotiate at COP29 a new climate finance package to support developing countries beyond 2025, the report cautions that any shortfall in investment before 2030 will place added pressure on the years that follow, creating a steeper and potentially more costly path to climate stability'.

Failing to invest sufficiently now, it warns, 'means we will need to mobilise even larger sums in shorter time frames to catch up on critical targets'.

Harjeet Singh, climate activist and Global Engagement Director for the Fossil Fuel Non-Proliferation Treaty Initiative, said, "Despite repeated warnings that the cost of inaction only compounds, making the path to climate stability steeper, wealthy nations continue to delay, sidestepping their responsibility to provide financial support for developing countries."

"Trillions are urgently needed each year to transform economies and address worsening climate impacts. If COP29 doesn’t commit to real climate finance -- predominantly grants, not misleading accounting tricks -- it will be a reckless gamble with the future, and the burden of climate devastation will intensify everywhere. The crisis is here, and ignoring it will only raise the stakes for everyone," he said.

The report said global climate action requires $6.3 - $6.7 trillion annually by 2030, with $2.4 trillion per year needed specifically for emerging economies.

It breaks down the $2.4 trillion needs for emerging markets and developing countries outside China as follows: $1.6 trillion for clean energy, $0.25 trillion for climate adaptation, $0.25 trillion for loss and damage, $0.3 trillion for sustainable agriculture and natural capital and $0.04 trillion for fostering a just transition.

The Independent High-Level Expert Group, co-chaired by climate finance experts Amar Bhattacharya, Vera Songwe, and Nicholas Stern, was formed to advise successive COP presidencies, starting with COP26.

This is the group's third report. The group said it is necessary to tap into all funding sources to meet the climate finance needs.

"External finance from all sources, international public and private, along with others, will need to cover $1 trillion per year of the total investment needed by 2030 and around $1.3 trillion by 2035," the authors said.

They said that a fourfold increase in total climate finance and a sixfold increase in external finance by 2030 are necessary to keep pace with climate goals, adding that these are the investment levels that are necessary for the delivery of the Paris targets.

The report says bilateral finance should increase by two times, multilateral development banks (MDB) finance by three times and private finance by 15 times.

At COP29, countries are required to reach an agreement on the NCQG -- the new amount developed nations must mobilise every year starting in 2025 to support climate action in developing countries.

At COP15 in 2009, developed countries pledged to mobilise $100 billion per year to help developing nations cope with climate change by 2020.

However, this target was only met in 2022, with loans accounting for around 70% of the total climate finance provided.

Developing countries have been pushing for an ambitious climate finance package that is publicly funded by developed countries, grant-based, concessional, supports their needs and priorities, and covers mitigation, adaptation and loss and damage from climate impacts.

Estimates indicate that developing and poorer countries will require trillions of dollars to adapt to and combat climate change in the coming years.

Among the Global South negotiators, the Like-Minded Developing Countries group has suggested that $1 trillion per year is needed, the Arab Group has called for $1.1 trillion, the African Group $1.3 trillion, India $1 trillion and Pakistan $2 trillion.

In contrast, developed nations want the NCQG to be a broad, global investment goal that includes funding from multiple sources, including governments, private companies and investors.

They argue that the global economic landscape has changed significantly since adopting the UN Framework Convention on Climate Change in 1992 and that countries that have become wealthier since then, such as China and some Gulf states, should also contribute to the new climate finance goal.

Developing countries view this as an attempt to shift responsibility away from those who have historically benefited from industrialisation and contributed the most to greenhouse gas emissions.

They argue that expecting them to contribute -- especially when many are still struggling with poverty and inadequate infrastructure amid worsening climate impacts -- undermines the principle of equity.