As global talks get underway in Bonn at #SB62 (and with Seville and Johannesburg on the horizon) countries must confront a climate finance system that’s failing the Global South. COP29, dubbed the “Finance COP,” delivered too little and ignored fairness in how funds are provided. As the climate crisis worsens, those least responsible bear the highest cost. Here, we unpack why bold, rights-based climate finance must take center stage, and invite you to join us in Bonn to push this conversation forward.
By Peninnah Mbabazi, CESR’s Program Associate
As the world moves from COP29 in Baku to COP30 in Belém, one issue remains at the heart of global climate action: climate finance. After the fraught negotiations at the UN climate summit in Baku, a new climate finance goal was reached. The cornerstone of the new agreement is an upgraded finance goal of at least $300 billion annually by 2035, replacing the previous goal of $100 billion annually by 2020 and through 2025. This, also known as the New Collective Quantified Goal (NCQG) is unfortunately far from the trillions that are actually needed to tackle the climate crisis in a timely and adequate fashion.
The new goal is includes both public and private sources., While the headline figure of US$300 billion appears to be triple the previous target, it falls drastically short of the the US$1 trillion target that evidence-based research shows is necessary. In addition, it’s far from sufficient to meet the real needs for developing countries. Moreover, it is unclear how much of the US$300 billion per year will be concessional finance or loans from private investors. Many civil society groups and networks, like Climate Action Network (CAN), have highlighted that private finance cannot close the massive gap that remains. Civil society is urging UN Member States and influential blocs, like the G20, to refocus on the need to scale up public finance.
On June 24, we’re co-hosting Climate Reparations – Advancing Finance and Human Rights for Frontline Communities at the UNFCCC Bonn Conference. Together with La Ruta del Clima, Amnesty International, Oxfam, Equal Right, and Cool Earth, we’ll spotlight just finance solutions rooted in human rights.
Governments spent around US$400 billion in 2018 subsidizing the price of petrol, diesel, gas, electricity and coal in order to keep consumer prices below international market levels. Globally, fossil fuel subsidies were $7 trillion (equivalent to 7.1 percent of global GDP in 2022) reflecting a US$2 trillion increase since 2020, largely due to government support from surging energy prices. Governments spent another US$100 billion annually on upstream subsidies to producers of oil, gas and coal. These include direct budgetary transfers, tax exemptions, public financing, and government support for infrastructure—such as ports, pipelines, and rail—provided to fossil fuel producers at various stages of the supply chain. Redirecting even a portion of this finance could significantly accelerate progress in tackling the climate crisis..
The rising debt burden amidst the climate crisis
Developing countries are facing a mounting debt crisis just as the impacts of climate change intensify. In 2023, their total external debt servicing reached a record US$1.4 trillion. The burden has fallen heaviest on economically marginalized countries have been hit hardest, with debt servicing costs tripling and interest payments quadrupling over the past decade, totaling an estimated $36 billion. This is equivalent to nearly three and half years annually of all public health financing needed in low income countries.
By 2024, the burden has only grown. Debt repayments are now eating up 43 cents of every dollar of public revenue in developing countries. In low-income and lower-middle income countries, this figure jumps to more than 50%, creating impossible trade-offs between serving debt and serving people.
Meanwhile, many of these countries are on the frontlines of the climate crisis. Nations like Somalia, Zambia and Mozambique urgently need finance to build resilience, but together, they face a climate funding gap of over US$467.17 billion. That is about $1400 for every person in the United States, a sobering reminder of the scale of injustice.
Yet the outcome of COP29 failed to meet this moment. The new climate finance deal was negotiated without meaningful space for Global South countries, leaving them with no room to achieve better commitments from the Global North. Rather than relieving pressure, this risks deepening the debt trap, pushing vulnerable nations further away from climate justice and from realizing the social and economic rights of their people.
Why advancing the human rights lens to climate finance matters
The climate crisis is, fundamentally, a human rights crisis. Its consequences (drought, displacement, food insecurity, loss of livelihoods) fall hardest on those least responsible for global emissions: low income communities, Indigenous peoples, and other historically marginalized groups. Climate finance, when grounded in human rights, becomes a powerful tool to reverse this injustice. It can ensure that communities on the frontlines of climate change—not just governments or large institutions—have access to the resources they need to protect their lives, livelihoods, and ecosystems. International human rights law obliges states to respond to the climate crisis in ways that are equitable, participatory, and accountable. This includes financing climate action in ways that reflect common but differentiated responsibilities and respect the right to development.
Aligning climate finance with human rights and principles of reparations would make it not only fairer and more equitable, but also more responsive to the needs and voices of communities in the Global South. It would help shift the focus from charity or risk management toward justice, redress, and accountability.
Yet, today’s climate finance architecture remains deeply flawed. The way funds are raised, allocated, and managed largely ignores historical responsibility, colonial legacies, and the vastly unequal impacts of climate breakdown. It often privileges private sector interests and financial efficiency over equity, transparency, and public participation. Without structural reform, climate finance will continue to reproduce (rather than repair) the inequalities at the heart of the crisis.
Why does the climate finance agenda matter at the FFD4 and G20?
The 4th International Conference on Financing for Development (FfD4) is a global UN summit aimed at mobilizing and reforming global financial systems. The event comes at a critical moment, as the world faces escalating environmental and economic pressures.. As climate impacts intensify, the fundamental question remains unanswered: how will countries least responsible for the climate crisis finance the actions needed to survive and adapt?
The FfD4 outcome document should reiterate the need for concrete targets for grant-based finance. The NCQG continues to fall short on key quality criteria, including affordability, transparency, and effectiveness. Establishing a shared understanding of what constitutes rights-aligned and accessible climate finance is essential, especially from the perspective of developing countries.
As South Africa prepares to host the G20 Summit, its members must take the lead in setting ambitious financial targets for COP30. This includes scaling up concessional and grant-based funding to ensure developing countries can meet their climate commitments without deepening debt or sacrificing development priorities.
What to expect ahead of the UNFCCC Bonn Conference (SB62)?
Now, As the world turns its attention to the 62nd session of the UNFCCC Subsidiary Bodies (SB62) in Bonn (the lead–up to COP30)it is crucial to deliver on existing international climate finance commitments. These discussions must place finance at the center, with a focus on securing concrete resolutions to increase the volume of support for countries in the Global South. This includes establishing a globally agreed framework that ensures fair allocation of limited resources, improves access, enhances effectiveness, and guarantees transparency.
Resolutions should emphasize the urgent need for new and additional grant-based public financing for climate action. They must also reaffirm that climate finance must be guided by the principles of equity and common but differentiated responsibilities and respective capabilities, with resources targeted toward the most vulnerable countries and communities. A fair and progressive fiscal system is essential to mobilize the resources required to advance climate justice, uphold human rights, and tackle global inequality.