Finance is a significant issue in climate negotiations, as developing countries insist that developed countries pay the costs of adaptation (to deal with the effects of climate change). File | Photo credit: AP
In order for developing countries to adapt to climate change, they will need between 310 and 365 billion dollars (at least 27 million crowns) by 2035, according to a United Nations analysis. This is almost 12 times more than the money currently flowing from the developed to the developing world for this purpose.
The analysis, which highlights the huge gap between demand and supply for the funds needed to protect developing countries from the effects of climate change, appears in Running on emptyannual deficit report released on Wednesday (29 October 2025), ahead of the 30th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP-30) in Belem, Brazil, next month.
International public finance flows for adaptation to developing countries were US$26 billion (about ₹2.2 lakh crore) in 2023, down from US$28 billion the previous year. If these trends continue, the goal agreed by countries at COP-26 in Glasgow to double adaptation financing to $40 billion by 2025 “will not be missed,” the report added.
Disappointing goal
Finance is a significant issue in climate negotiations, as developing countries insist that developed countries pay the costs of adaptation (to deal with the effects of climate change) and mitigation (divesting from fossil fuels), as well as compensation for losses and damages that have already occurred. This overall account is collectively called “climate finance”.
At COP-29 in Baku, Azerbaijan last year, developing countries, which had called for almost $1.3 trillion a year by 2035, were disappointed when the developed world agreed to just $300 billion, called the New Collective Quantified Goal (NCQG) in climate finance. Although that is three times the $100 billion target to be met by 2025, critics say the figure does not account for future inflation or specify how much is earmarked for adjustment needs.
A UN report on Tuesday (October 28) underscores this criticism. “…it is all too evident that the financial resources needed to enable adaptation action in developing countries on the scale necessary to address the growing challenges of current and future climate risks are woefully inadequate. It will take nothing less than a global collective effort to increase climate finance to the level outlined in the Baku to Belém 1.3 trillion plan,” it notes
Increasing debt
The report also raises concerns that any money currently made available is primarily classified as “debt”. Although 70% of international public finance for adaptation in 2022-2023 has been disbursed, it is “worrying” that these total flows continue to be dominated by debt instruments, accounting for an average of 58% in that financial year, the report said.
The growing share of expensive debt instruments “raised concerns” about long-term affordability, equity and the risk of an “adaptation investment trap”, where increasing climate disasters increase indebtedness and make it harder for countries to invest in adaptation. “This is especially true for vulnerable countries, especially LDCs (least developed countries) and SIDS (small island developing countries), which have contributed very little to the climate crisis but are suffering the most from its effects. Furthermore, non-concessional loans outnumbered concessional ones, although so far mostly to middle-income countries,” the report adds.
Also read: Climate change is changing where and how Indians live
‘death sentence’
“This news confirms a stunning betrayal. The adaptation funding gap is a death sentence for communities on the front lines. For decades, the developing world has been told to prepare for a crisis they did not cause. They have done their homework – 172 countries now have adaptation plans – but rich nations have offered only a token, financial flows have decreased last year,” said Harpadjeet Singhist and director of the Climate Foundation, Samat, Harpadjeet Singh. in the statement.
“This monumental gap – now at least 12 times greater than provided for – is the direct cause of lost lives, destroyed homes and shattered livelihoods. It is a deliberate political choice by rich countries to leave the developing world to climate impacts they had no hand in creating. It is the very definition of climate injustice,” he added.
Published – 29 Oct 2025 21:16 IST
