Think Tank Argues Old Climate Finance Bargain Is "Structurally Inadequate"

The Center for Climate and Energy Solutions has published a discussion paper arguing that the traditional model underpinning international climate finance, wealthy nations providing grants and concessional funding in exchange for emissions reductions from developing countries, has become structurally unable to deliver finance at the scale climate science demands. The paper, released ahead of COP31, proposes a shift toward what it calls two-tier multilateralism and urges incoming COP31 presidencies Türkiye and Australia to elevate the Baku to Belém Roadmap to 1.3T as the central vehicle for scaling climate finance.

 

Why C2ES Argues Pressure Alone Isn't Working

 

The paper contends that wealthy nations have deliberately reduced climate finance commitments in response to shifting domestic priorities, including security concerns and economic pressure, rather than through any failure of advocacy from developing countries or civil society. It cites World Bank data indicating more than half the global population, including residents of wealthy countries, already faces material exposure to extreme weather, yet notes governments have consistently prioritised more immediate crises, such as pandemic response or active conflict, over climate spending when allocating limited public budgets.

The paper explicitly states this argument does not excuse wealthy nations from their financial obligations or historical responsibility for emissions, and that developing countries remain justified in continuing to press rich countries to increase public finance. Its central claim is narrower: that relying primarily on moral pressure and historical responsibility as the organising principle for climate finance has not produced the scale of funding needed, and is unlikely to do so given current political conditions in donor countries. That framing represents C2ES's own analytical position rather than a settled consensus; developing country governments and civil society groups have continued to argue that historical responsibility and wealth disparities still justify substantially greater financial obligations from wealthy nations specifically.

 

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Why Emerging Economies' Growing Self-Sufficiency Features in the Argument

 

A significant part of the paper's case rests on the claim that major emerging economies, particularly the BRICS bloc, increasingly have the domestic financial resources to fund their own energy transitions without relying primarily on Northern aid, even while continuing to need support in specific sectors such as agriculture. The paper points to China's solar panel exports reaching a record high in March 2026, up 49 percent year over year and concentrated in exports to Asia and Africa, as evidence that renewable energy deployment is increasingly driven by economic and energy security logic rather than by climate aid flows alone.

 

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What the Paper Proposes

 

Rather than continuing to negotiate primarily through the UN Framework Convention on Climate Change's traditional public finance-focused framework, the paper advocates preserving universal, consensus-based UNFCCC negotiations for setting overall direction and legal accountability, while relying more heavily on a second tier of international cooperative initiatives, smaller coalitions of governments, development banks and private actors that can move faster without requiring full multilateral consensus.

Central to this proposal is the Baku to Belém Roadmap to 1.3T, a framework produced following COP29's commitment to explore how climate finance could scale into the trillions of dollars, organised around five action areas the paper terms replenishing, rebalancing, rechanneling, revamping and reshaping global finance systems. The paper argues the Roadmap received a lukewarm reception at COP30 in Belém and currently lacks a formal process to advance its recommendations, proposing three non-exclusive mechanisms for advancing it: anchoring it to the UN's periodic global stocktake process, embedding it within the broader Global Climate Action Agenda, or coordinating action outside the UNFCCC entirely through venues like the G20 or a renewed High-Level Advisory Group on Climate Change Financing.

 

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What Comes Next

 

The paper's underlying argument is that continued attachment to a finance model built around wealthy countries providing public aid in exchange for developing country mitigation ambition, whatever its moral basis, risks leaving international climate finance negotiations increasingly disconnected from where the more consequential capital decisions are actually being made, in private markets, multilateral development banks and regional coalitions operating outside formal UN process. Whether Türkiye and Australia's COP31 presidencies take up the paper's proposed mechanisms for elevating the Roadmap to 1.3T, and whether doing so accelerates climate finance flows without diluting accountability for wealthy nations' existing commitments, will be tested as COP31 negotiations approach.

 

Source: CENTER FOR CLIMATE AND ENERGY SOLUTIONS