31 October 2024, London – Climate finance is going to be at the center of COP29 negotiations in Baku next month. A new study shows that annual climate finance must increase at least fivefold by 2030 to meet the goals of the Paris Agreement and to avoid the worst consequences of climate change.
The Global Landscape of Climate Finance 2024: Insights for COP29 report, published today by Climate Policy Initiative (CPI), found that climate finance flows reached almost USD 1.5 trillion, having doubled between 2018 and 2022.
However, climate finance currently only represents 1% of global GDP, far short of what is needed. Emerging markets and developing economies (EMDEs) may need around 6.5% of their GDP by 2030 to meet climate goals.
“While global climate finance has made some strides, a much more ambitious, cohesive, and effective approach is essential to address the vast funding gap,” said Barbara Buchner, CPI’s Global Managing Director. “The data from CPI’s Global Landscape report leaves no doubt that investment needs to scale across all fronts—domestically, internationally, and across sectors—to reach our mutual climate goals. COP29 is an opportunity to establish clear, collaborative commitments to finance the transformation needed for a sustainable future.”
CPI’s report further details the cost of inaction, estimating that projected economic losses by 2100 will be five times greater than the climate finance that is needed by 2050 to stay within a 1.5°C warming scenario. The economic impact under a “business-as-usual” scenario will be exponential if climate action is delayed, further exacerbating financial strain on all economies.
Alarmingly, investments in fossil fuels continued to rise globally throughout 2023 and 2024 to surpass USD 1 trillion, despite global commitments to reduce fossil fuel investments. Subsidies for fossil fuel consumption in emerging economies increased fivefold during the same period.
The insights provided in this year’s Global Landscape of Climate Finance 2024, the most comprehensive overview of global climate-related primary investment, are particularly crucial ahead of COP29, which marks a critical juncture for establishing the New Collective Quantified Goal (NCQG) to make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.
Several large-scale processes need to occur simultaneously in the next five years to accelerate the scale, speed, and quality of climate finance amid constrained budgets and conflicting political and financial priorities. To enhance the scale and effectiveness of global climate finance, CPI proposes prioritizing the following topics: innovation and replication; targeting and allocation; domestic policies and ownership; and cross-cutting, multi-stakeholder action.
For more information, register for the webinar on Monday, 4 November 2024.
Media contact:
Jana Stupperich
Senior Communications Associate
jana.stupperich@cpiglobal.org
About Climate Policy Initiative
CPI is an analysis and advisory organization with deep expertise in finance and policy. Our mission is to help governments, businesses, and financial institutions drive economic growth while addressing climate change. CPI has offices in Brazil, India, Indonesia, South Africa, the United Kingdom, and the United States.
