Putting pledges into practice: what did COP30 mean for the multilateral climate funds?
COP30 ended after a lot of talk about action and implementation but how far did that go? And what does it mean for the multilateral climate funds? This is the third insight in a series examining the world’s multilateral climate funds.
Members of the COP30 presidency and the UNFCCC secretariat consult on the dais during the closing plenary (Photo: UN Climate Change - Kiara Worth, via Flickr, CC BY-NC-SA 4.0)
In 2025, countries submitted updated Nationally Determined Contribution (NDC) reports – the action plans demonstrating what a country will do to contribute to the global goal of limiting temperature rise to below 1.5°C.
Collating actions from across NDCs found that these new plans project emissions to be cut by 12% below 2019 levels by 2035 – better than the trajectory without the Paris Agreement but still significantly short of what is needed to limit global temperature rise to 1.5°C (PDF, see figure).
The lack of agreement at COP30 on a roadmap for phasing out fossil fuels makes the situation worse.
With the risks and impacts of climate change increasing with every incremental rise in global temperatures, sufficient and timely delivery of adaptation finance to support the poorest and most climate-vulnerable countries and communities to respond is essential.
Less ambitious mitigation action means greater need for adaptation action, to be ready for the impacts of a warming world.
Commitments to adaptation finance relevant to the multilateral funds
Last year at COP29, parties agreed to the New Collective Quantified Goal on climate finance (NCQG) (PDF), which called for:
- Delivery of US$300 billion per year for developing countries’ climate action by 2035
- Mobilisation of $1.3 trillion per year in climate finance from all actors by 2035 for developing countries, and
- At least triple annual outflows through the operating entities of the Financial Mechanism, the Adaptation Fund, the Least Developed Countries Fund (LDCF) and the Special Climate Change Fund (SCCF) from 2022 levels by 2030.
To support the objective of scaling up climate finance to at least $1.3 trillion, the Baku to Belém roadmap process has sought to develop an action framework.
Though this roadmap has gained some momentum, it has only been ‘noted’ in the final COP30 text (PDF). It would require countries to take ownership of it to generate the political momentum necessary to keep it alive in the days to come.
Across these climate finance targets is the imperative to achieve a balance between the provision of finance for mitigation and for adaptation. Despite this objective, adaptation finance remains highly marginalised.
To address these challenges, in 2021 at COP26, countries agreed to at least double adaptation finance by 2025 from 2019 levels. As this target expires this year, a new target has been set for tripling adaptation finance from 2025 levels by 2035 (rather than by 2030, which many countries called for) – translating to $120 billion a year.
While there was some progress made, at a time when public finance is receding, progress is stagnating and ambitions are low. Despite the rhetoric of solidarity and not leaving anyone behind, it often felt at COP that highly vulnerable groups of countries were ignored and left to fend for themselves.
The promises made over the years to consider the special circumstances and needs of LDCs and Small Island Developing States (SIDS), also recognised in the Paris Agreement, didn’t come through.
Key issues coming up for the funds
Flows and replenishments
One of the asks of developing countries at COP30, especially the highly vulnerable ones, was to operationalise the NCQG decision for the operating entities and the fund. However, across all these funds, NCQG was only referenced – no concrete action was taken.
Across all funds, replenishment is coming up as a major issue. The US’ withdrawal of support, including from commitments it had already made, leaves major funding gaps. Despite this, countries will need to figure out how to operationalise the NCQG requirement to triple the volume of annual disbursements from multilateral climate funds.
In this regard, focus fell on Article 9.5 reporting – ex-ante biennial communications from developed country parties – where the increasing importance of providing scaled up, reliable and predictable finance to developing countries is playing out.
Adaptation Fund
The Adaptation Fund has an innovative funding model: to receive finance from market mechanisms as well as from voluntary contributions from countries.
As the share of proceeds contributed from the clean development mechanism has phased out, the fund is now expected to receive a share of proceeds from Article 6.4, where 5% of carbon credits issuance fees are to go to the Adaptation Fund. However, for these flows to take place, the fund would need to agree on the governance with the trustee, the World Bank, by allowing it to receive the share of proceeds.
Unfortunately, due to disagreements over membership and terminologies used under the Kyoto Protocol and the Paris Agreement, the decision again didn’t take place at COP30 and was moved for discussion for the next subsidiary body session in Bonn with an expectation of a decision in COP31.
This has hindered the fund from receiving much needed resources, as many projects are in the pipeline awaiting funding.
Developed countries have been voluntarily pledging resources to the fund but resources are still tight. It has failed to meet its resource mobilisation target of $300 million a year since 2022. At COP30, only $134.93 million was pledged, again falling short of the $300 million target.
Green Climate Fund
A resource gap was also an issue in GCF discussions. The GCF board recently decided to undertake a balance sheet optimisation process. This was called out by some parties, who pointed out that, unlike a multilateral development bank, capital cannot be squeezed out of the fund by structuring innovative financial loan arrangements (which shift burdens onto recipients) – the GCF fundamentally needs more capitalisation.
Developing countries warned that ‘optimisation’ could go down the path of being regressive (such as increasing loan interest rates, reducing loan periods, and so on.), which would undermine the fund’s objectives.
The third replenishment process for the funding cycle 2028-31 for the GCF will start mid-2026.
Special Climate Change Fund and Least Developed Countries Fund under the Global Environment Facility (GEF)
The SCCF and LDCF are key mechanisms for LDCs and SIDS, and the tripling of outflows from these funds as per the NCQG decision will be significant for these countries.
LDCs called for $3 billion to be ringfenced for LDCF in its ninth replenishment – also in 2026 – in line with the NCQG commitment. LDCF is a fund for the most vulnerable, low-capacitated countries and non-competitive among the developing countries. However, this call did not make it into the COP30 decision – a huge let-down.
Fund for Responding to Loss and Damage (FRLD)
At COP30, Barbados Implementation Modalities was launched, following the fund’s seventh board meeting. It is a critical step in moving the fund from establishment to operationalising loss and damage actions in developing countries.
Countries can submit a proposal ranging from $5 million to $20 million from a pot of $250 million. Nevertheless, the available resources in the fund are a 'drop in the ocean' compared to the hundreds of billions needed for loss and damage actions.
The board of the fund has also agreed to develop a long-term resource mobilisation strategy and plan, which is crucial to the fund's replenishment process.
Access is critical
It is not just the quantity but also the qualitative aspects of climate finance that are significant. Ensuring fair and direct access to available funding is a mainstay of issues raised in relation to the climate funds.
Across the funds, there have been some efforts made to improve access. For example, the GCF has recently adopted a new accreditation framework and revamped their support structure by decentralising into regional presence. There is also a strong call under the GEF to expand its funding for national institutions.
The key to improving country ownership is for these national institutions to access resources directly. Particularly for highly vulnerable countries, this requires institutional strengthening and capacity support.
The multilateral funds are important mechanisms for supporting the climate-vulnerable countries; the task ahead is to keep them capacitated and to make sure that finance gets to the communities where it is needed most.
With thanks to Shaila Mahmud and Sydney Church for contributing to the development of this insight
