Beyond Baku & Belem
Jamil Ahmad Published October 20, 2025
Policy Brief | Global Climate Finance Monitor
The Trillion-Dollar Question: Navigating Climate Finance from Baku to Belem and Beyond
PUBLICATION NO.: GCFM-2025-10 DATE: October 20, 2025 AUTHOR: The Institute for Global Climate Finance Monitoring (Simulated)
Executive Summary
The UN Climate Conference (COP29) in Baku established a critical financial roadmap with the New Collective Quantified Goal (NCQG), aiming to mobilize at least $300 billion annually by 2035 from developed countries, contributing to a total aspiration of $1.3 trillion. This brief assesses the progress and challenges of this “Baku-to-Belem” journey.
The mobilization effort is currently being undercut by two crises: a climate catastrophe that is outpacing action, and soaring geopolitical tensions that have diverted trillions into military spending, away from climate resilience. While multilateral and regional institutions have made significant commitments, the annual funding gap for adaptation remains alarmingly high, estimated between $187 billion and $359 billion.
Closing this gap requires more than public funds. It demands decisive action on: 1) Frontloading investment through national plans (NDCs 3.0), 2) Optimizing nature-based solutions for cost-effectiveness, and 3) Re-energizing regional cooperation. The world must ensure that the commitment to climate finance matches the urgency of the existential threat.
I. The Mandate from Baku: Setting the Financial Stage
The outcomes of COP29 were critical in resolving long-standing issues and setting a clear financial benchmark for global climate action.
1.1 Key Financial Breakthroughs
- Loss and Damage Fund Operationalization: The formal establishment of the Loss and Damage Fund marked a historic victory for climate justice, providing a dedicated mechanism to assist vulnerable nations in recovering from irreversible climate impacts.
- Article 6 Resolution: Critical technical issues regarding the voluntary carbon credit trading systems between countries were resolved, enhancing flexibility in achieving emission reduction targets under the Paris Agreement.
1.2 The New Collective Quantified Goal (NCQG)
The NCQG establishes a two-layered financial target to meet the immense needs of developing countries:
| Financial Goal | Source | Target | Rationale |
| Layer 1: Developed Countries’ Pledge | Developed Nations | At least $300 Billion Annually by 2035 | The core commitment of the NCQG. |
| Layer 2: Global Mobilization Target | All Sources (Public, Private, Other) | $1.3 Trillion by 2035 | The aspirational goal reflecting the true scale of finance required for mitigation and adaptation. |
II. The Race Against Disaster: Climate Change Outpacing Action
The successful execution of the Baku-to-Belem roadmap is compounded by intensifying climate disasters and a competing surge in global military spending.
2.1 A World of Mounting Disasters
Climate change continues to outpace action, with environmental disasters increasing in ferocity and frequency. Each catastrophic event reverses developmental gains, exacerbates poverty, increases global inequality, and drives up the costs of relief and reconstruction, demanding ever-larger sums for adaptation.
2.2 The Geopolitical Hurdle: Climate vs. Conflicts
The challenge is severely undermined by geopolitical conflicts that divert financial resources.
- The Squeeze on Climate Funds: When nations augment defense budgets, development and environmental funds are often the first to be curtailed, relegating climate action on the global priority list.
- The $2.7 Trillion Competition: Global military spending reached a record $2.7 trillion in 2024. This trend projects potential spending as high as $6.6 trillion by 2035—a figure that directly competes with, and dwarfs, the required $1.3 trillion climate finance goal.
III. Assessing the Progress: Who is Paying Up?
Notwithstanding the challenges, multilateral and regional institutions have demonstrated improved performance in mobilizing capital post-Baku.
3.1 Multilateral Giants: Performance and Portfolios
- Green Climate Fund (GCF): Leads with a total portfolio of $66 billion (including co-financing), with $18 billion committed to projects.
- World Bank: Raised its contribution to $31 billion last year for financing that had climate co-benefits, a positive institutional step.
- Loss and Damage Fund: Received initial pledges amounting to $0.79 billion, though still a fraction of its projected needs.
3.2 Regional Response: Banks in Asia and Africa
Regional Development Banks (RDBs) are crucial engines for climate finance:
- Asian Development Bank (ADB): Committed $12.3 billion in climate finance in 2024, with a strong focus on both mitigation and adaptation.
- African Development Bank (AfDB): Seeks to mobilize $4 billion this year via its Climate Action Window, addressing the unique vulnerability of a low-emitting continent.
- Africa Climate Innovation Compact: Agreed at the second Africa Climate Summit to mobilize an annual $50 billion in climate finance for the continent.
IV. The Alarming Finance Gap and the Private Sector Paradox
Despite the institutional efforts, the annual funding mobilized is nowhere near the assessed need, creating a massive deficit that cannot be filled by public funds alone.
4.1 The Adaptation Deficit
- Annual Shortfall: The UNEP’s Adaptation Gap Report 2024 estimates the annual funding gap for adaptation to be between $187 billion and $359 billion.
4.2 The Private Sector Paradox
- The Need for Private Capital: The banking, investment, and insurance sectors are essential to provide the financial scaffolding required to close the trillion-dollar gap.
- The Enabling Environment: Full private sector potential can only be unlocked by creating an enabling environment that strategically reduces risks, fosters green investments, and ensures accountability—especially given setbacks like the operational pause of the Net-Zero Banking Alliance.
V. Conclusion and Way Forward: Charting the Course to Belem (COP30)
The journey to COP30 in Belem demands a pivot from ambition to concrete implementation. The world must treat the climate crisis with the financial urgency it warrants.
The Way Forward requires decisive, innovative action across three critical pillars:
| Pillar | Action Required | Expected Outcome |
| Frontloading Investment | Governments must rigorously implement their NDCs 3.0 and strategically frontload investments, utilizing innovative financing mechanisms beyond traditional aid. | Accelerate capital deployment and attract blended finance into core climate projects. |
| Optimizing Nature-Based Solutions (NBS) | Fully integrate and optimize NBS (e.g., ecosystem restoration) as a core strategy for adaptation and mitigation. | “Do more with less”: Achieve cost-effective, dual benefits and conserve scarce financial resources. |
| Re-energizing Regional Cooperation | Strengthen regional initiatives to pool resources, harmonize regulations, and coordinate large-scale cross-border projects. | Make the financial mobilization journey less arduous and ensure efficient and tailored deployment of capital. |
The commitment made in Baku must be upheld and accelerated on the path to Belem. The future of global resilience rests on the collective political and financial will to ensure that the resources deployed finally match the scale of the threat. Climate action cannot be paused.