Developed Countries Exceed $100 Billion Climate Finance Goal for Third Consecutive Year Reaching $136.7 Billion in 2024: OECD

Developed countries provided and mobilised $132.8 billion in climate finance for developing countries in 2023 and $136.7 billion in 2024, exceeding the $100 billion annual goal for the third consecutive year according to new OECD data. The figures build on the 2022 total of $115.9 billion, which marked the first year the long-delayed goal was achieved, and demonstrate a growing margin of overperformance as mobilised private finance accelerated sharply. OECD Secretary-General Mathias Cormann said the third consecutive year of exceeding the goal shows clear commitment to supporting developing economies in adapting to and mitigating climate change, highlighting the growth in both mobilised private finance and adaptation finance as key developments.

 

Private Finance Mobilisation Reaches $30.5 Billion

 

Mobilised private finance reached $30.5 billion in 2024, representing the largest annual growth since 2016 with an increase of $7.6 billion or 33 percent, up from more modest growth of $1 billion or 5 percent in 2023. The acceleration was driven primarily by multilateral development banks deploying guarantees, direct investment in companies and syndicated loans to crowd in private capital alongside public climate finance. This sharp upturn in private mobilisation is strategically significant because scaling private capital into developing country climate investment is widely recognised as essential to bridging the gap between public finance availability and the total investment required for the energy transition and climate adaptation in emerging markets.

The growth in mobilised private finance also reflects improving instrument design and risk mitigation mechanisms that make emerging market climate investments more attractive to institutional capital. Guarantees provided by multilateral development banks have proven particularly effective at reducing perceived risk, enabling private lenders and investors to commit capital to projects they would otherwise consider too uncertain. The trajectory of private mobilisation will be one of the most closely watched indicators as the world transitions to the New Collective Quantified Goal framework for the period 2026 to 2035.

 

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Mitigation Versus Adaptation Finance

 

Mitigation finance continued to account for the majority of climate finance provided to developing countries, at nearly two-thirds of the total in both 2023 and 2024. While this reflects the scale of investment required to decarbonise energy systems and industry, it also highlights the persistent imbalance between mitigation and adaptation in the composition of climate finance flows. Developing countries, which face the sharpest climate impacts relative to their contribution to global emissions, require substantial adaptation finance to build resilience to floods, droughts, extreme heat and sea level rise.

Adaptation finance continued to grow but at a slower pace, accounting for one quarter of the total in both 2023 and 2024, down from a peak of one-third in 2020. The Glasgow Climate Pact's commitment to doubling adaptation finance by 2025 compared with 2019 levels will require adaptation finance provided by developed countries to have increased by more than $5 billion in 2025, creating pressure on donor governments and multilateral institutions to accelerate this category of support specifically. Meeting the adaptation doubling commitment will be one of the key tests of developed country climate finance credibility as the final year of the $100 billion goal framework is assessed.

 

Geographic Distribution and Low-Income Country Access

 

Climate finance remained heavily concentrated in middle-income countries throughout the measurement period, a structural pattern that has drawn criticism from development advocates who argue that the most climate-vulnerable nations are receiving insufficient support. Support for low-income countries declined to $8.4 billion in 2023 and recovered only partially to $9.6 billion in 2024, remaining below the 2022 peak of $11.1 billion. This declining share for the poorest countries within a growing overall envelope represents one of the most significant equity concerns in the current climate finance architecture.

The concentration of finance in middle-income countries reflects the risk-return profiles that most public and private climate finance instruments are designed around, with middle-income markets offering more bankable project pipelines and more established regulatory environments. Addressing low-income country access requires more concessional finance, grant funding and technical assistance to develop the project pipelines and institutional capacity needed to attract commercial capital. The transition to the New Collective Quantified Goal framework provides an opportunity to address these distributional concerns through more targeted allocation requirements.

 

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Transition to the New Collective Quantified Goal

 

Parties to the UNFCCC adopted the New Collective Quantified Goal on climate finance for the period 2026 to 2035 at COP29, replacing the $100 billion annual framework with a more ambitious and comprehensive architecture. A first progress assessment by the UNFCCC Standing Committee on Finance is due in 2028, creating an early accountability moment for the new framework. The OECD and the International Energy Agency Climate Change Expert Group have highlighted that coordinated efforts are needed over the next two years to prepare a robust tracking framework, improve data availability and comparability, and establish corresponding transparency arrangements.

The OECD will continue tracking achievement of the $100 billion goal through 2025 and intends to publish a final report in 2027, providing a definitive assessment of whether the goal was met consistently across the full commitment period. This final accounting will be important for establishing the credibility baseline against which the more ambitious NCQG framework will be judged. The lessons learned from the $100 billion goal, particularly around private mobilisation methodologies, adaptation finance measurement and country-level access, will directly inform the design of the tracking architecture for the new framework.

 

Outlook for Climate Finance Under the NCQG

 

The third consecutive year of exceeding the $100 billion goal provides a positive political signal for the transition to the NCQG framework, demonstrating that developed countries can sustain and grow climate finance flows over time. However, the absolute scale of the NCQG and the structural challenges of geographic distribution and adaptation financing mean that simply extrapolating the momentum of recent years will be insufficient. Transformative changes in instrument design, risk-sharing architecture and concessional finance availability will be needed to ensure that the new framework delivers climate finance that reaches the countries and communities most in need.

Whether the NCQG can avoid the delays and disappointments that characterised the $100 billion goal, which was originally set for 2020 and not achieved until 2022, will depend on the clarity of commitments, the robustness of the tracking framework and the political will to maintain flows during periods of fiscal pressure in donor countries. The OECD's continued role in tracking and reporting will be essential for maintaining accountability and transparency as the framework scales. Sustained progress will ultimately be measured not just by the headline figure but by the quality, distribution and impact of the finance reaching developing countries on the front lines of climate change.

 

Source: OECD