Do not make the LDCs and MVCs pay for a crisis they did not create

Developing countries need predictable, grant-based finance, stronger accountability and a just transition from fossil fuels

By M Rezaul Karim Chowdhury and M. A. Hasan

The world has heard climate promises for years. Every climate summit brings new targets, financial pledges and ambitious roadmaps. Yet for climate-vulnerable countries and communities, the fundamental questions remain unanswered: Where is the money promised? How much has actually reached those who need it most? And what tangible difference has it made to people’s lives?

As the world approaches COP31, the priority must shift from announcing new commitments to delivering on existing ones. Political declarations and headline figures cannot protect vulnerable communities unless they translate into accessible finance, stronger resilience and measurable improvements in people’s lives.

The challenge is not simply to mobilise more climate finance. It is to ensure that the money is adequate, predictable, transparent and fair—and that those facing the greatest climate risks are not forced to shoulder the financial burden of a crisis they contributed least to creating.

The widening climate finance gap

At COP29 in Baku, countries agreed on a new climate finance goal of at least US$300 billion annually for developing countries by 2035, with efforts to scale up finance from all public and private sources to US$1.3 trillion a year. At COP30 in Belém, the adoption of 59 global adaptation indicators and a call to triple adaptation finance by 2035 marked further steps towards addressing the needs of vulnerable countries.

These decisions represent important progress. However, the distance between political commitments, actual financial flows and the resources required on the ground remains alarming.

The United Nations Environment Programme’s Adaptation Gap Report 2025 estimates that developing countries will need approximately US$310 billion to US$365 billion annually for adaptation by 2035. Yet international public adaptation finance stood at just US$26 billion in 2023. The estimated annual requirement is therefore roughly 12 to 14 times the recorded flow.

This is not merely a financing shortfall. It is a climate justice gap that threatens to deepen existing inequalities between countries that have contributed disproportionately to global warming and those most exposed to its consequences.

The scale of the gap also raises a fundamental question about the credibility of international climate cooperation. If countries agree on ambitious goals but fail to mobilise the resources necessary to achieve them, the effectiveness of the entire process comes into question.

The debt trap behind climate finance

The volume of climate finance is only part of the problem. Its terms and conditions matter just as much.

According to figures reported by developed countries, US$136.7 billion in climate finance was provided or mobilised for developing countries in 2024. Of the US$101.6 billion in public finance, approximately 67 per cent—US$68.5 billion—was delivered through loans, while grants accounted for US$29.7 billion.

For countries already struggling with debt, this financing structure can turn climate action into another source of economic vulnerability. Communities suffering from rising seas, destructive cyclones, prolonged droughts and other climate-related hazards should not have to pay interest to protect themselves from a crisis they did little to cause.

Developing countries are already facing substantial debt pressures. UN Trade and Development (UNCTAD) estimates that their external debt reached US$12.3 trillion in 2025, while debt repayments during the year amounted to approximately US$1.6 trillion.

Against this backdrop, financing adaptation primarily through loans risks diverting scarce public resources away from healthcare, education, food security and essential infrastructure. It can also constrain governments’ ability to invest in long-term resilience precisely when climate impacts are becoming more severe.

Climate finance must therefore be assessed not only by how much money is announced, but also by whether its terms enable vulnerable countries to respond without compromising their development prospects. For adaptation and the most vulnerable countries, grants should be prioritised, with finance that is new and additional, adequate and predictable.

Bangladesh: climate finance is a development imperative

For Bangladesh, the debate is neither distant nor theoretical. Climate change directly affects livelihoods, food production, public health, infrastructure and economic security.

In coastal communities, salinity intrusion threatens agricultural production and access to safe drinking water. Farmers face increasingly uncertain growing conditions, while river erosion, flooding and cyclones can destroy homes, livelihoods and essential assets. The poorest households often have the fewest resources to recover and the least capacity to absorb repeated shocks.

When climate finance fails to reach these communities, the consequences extend well beyond environmental damage. Families may lose income, children’s education can be disrupted, food insecurity can intensify and vulnerable households may be pushed deeper into poverty.

Investments in climate-resilient agriculture, safe water, early-warning systems, cyclone shelters, resilient infrastructure and alternative livelihood opportunities are therefore essential to Bangladesh’s development. They can reduce future losses while protecting the gains made in poverty reduction and economic progress.

But such investments require resources that are accessible at the scale and speed demanded by climate risks. National governments cannot be expected to meet the growing costs of adaptation alone, particularly when competing development priorities and debt obligations already place significant pressure on public finances.

For Bangladesh and other climate-vulnerable countries, climate finance is not charity. It is an essential component of equitable international cooperation and a prerequisite for sustainable development.

Accountability must match ambition

The principles underpinning international climate agreements provide a clear basis for action. The United Nations Framework Convention on Climate Change and the Paris Agreement recognise equity and the principle of common but differentiated responsibilities and respective capabilities (CBDR-RC). Article 9 of the Paris Agreement also establishes obligations for developed countries to provide financial resources to assist developing countries with mitigation and adaptation.

These principles reflect a central reality: countries have contributed unequally to the climate crisis and possess unequal capacities to address it. Their responsibilities must reflect those differences.

The polluter-pays principle reinforces the broader case for ensuring that the costs of climate action are not unfairly transferred to those least responsible for global emissions. Although its precise application differs across legal and policy frameworks, its underlying message is clear: responsibility for addressing environmental harm should reflect responsibility for causing it.

At COP31, governments must turn these principles into transparent and measurable arrangements. The US$300 billion annual goal agreed at COP29 and the wider ambition to scale climate finance towards US$1.3 trillion must be supported by credible delivery plans, clear timelines, annual milestones and robust reporting.

Accountability must extend beyond the amounts announced. Governments should disclose how much finance has been committed, approved, disbursed and received; distinguish grants from loans and other financial instruments; and clarify how public finance is being used to mobilise private investment.

Without consistent accounting and transparent reporting, it will remain difficult to determine whether climate finance is genuinely increasing or whether existing development assistance is simply being relabelled.

Put vulnerable communities at the centre

Even when climate finance is available, complex applications, lengthy approval procedures and restrictive conditions can prevent it from reaching the people who need it most.

Local governments, community organisations and frontline institutions often understand local climate risks better than distant decision-makers. Yet they may lack the technical expertise, administrative capacity or resources required to navigate international funding mechanisms.

COP31 should prioritise simpler application procedures, faster disbursement, transparent allocation criteria and stronger institutional capacity at the local level. Funding arrangements must be designed around the needs of vulnerable communities rather than requiring those communities to adapt to unnecessarily complicated financial systems.

Local participation must also go beyond consultation. People affected by climate change should have meaningful roles in identifying priorities, designing interventions, monitoring implementation and evaluating results.

The adoption of the 59 Belém Adaptation Indicators provides an opportunity to strengthen global assessment of adaptation progress. However, national averages alone cannot reveal whether an intervention has improved the lives of people in a coastal settlement, a salinity-affected village or a climate-exposed farming community.

Adaptation must be evaluated through tangible outcomes, including improved access to safe water, more secure livelihoods, reduced disaster losses, stronger food security and increased household resilience. Local evidence and community participation should inform how success is defined and measured.

Ultimately, the effectiveness of climate finance should be judged not simply by the amount spent, but by the protection and opportunities it delivers.

Loss and damage: finance must arrive when it matters

The same urgency applies to loss and damage. Establishing a dedicated fund was an important achievement in international climate diplomacy, but the existence of a financing mechanism does not guarantee that affected communities will receive timely assistance.

When a cyclone destroys homes, floods devastate crops or climate-related disasters eliminate livelihoods, people need immediate support. Lengthy approval procedures and uncertain funding can leave households waiting while their economic and social vulnerabilities deepen.

Loss and damage finance must be adequate, additional to existing commitments, rapidly accessible and primarily grant-based. Access arrangements should allow vulnerable countries and affected communities to respond to urgent needs without being burdened by excessive administrative requirements.

The international community must also recognise that some climate impacts cannot be prevented through adaptation alone. Where damage is unavoidable, solidarity must be reflected in practical financial support rather than expressions of concern.

A just transition cannot be achieved without finance

The future of climate finance is inseparable from the global transition away from fossil fuels.

The first Global Stocktake at COP28, reflected in the UAE Consensus, called for transitioning away from fossil fuels in energy systems in a just, orderly and equitable manner. Yet the implementation of this commitment remains a critical challenge.

Limiting the expansion of fossil fuels, accelerating renewable energy deployment, improving energy efficiency and establishing credible national transition pathways are essential to keeping the 1.5°C temperature goal within reach.

However, the transition must be fair as well as fast. Developing countries cannot be expected to abandon affordable and reliable energy options without access to the finance, technology, skills and infrastructure needed to build cleaner alternatives.

Renewable energy investment, modern electricity grids, energy storage, technology transfer and support for affected workers and communities are all essential components of a credible transition.

A just transition must also recognise differences in national circumstances. Countries with greater financial resources and historical responsibility should provide stronger support to those with fewer resources and lower emissions but substantial development needs.

Without this support, the transition risks reproducing the same inequalities that have undermined climate action for decades. With it, the transition can create opportunities for cleaner growth, energy security, employment and more resilient economies.

COP31 must deliver, not merely declare

The central test for COP31 is straightforward: will countries continue to announce ambitious goals, or will they demonstrate that existing commitments are being fulfilled?

The answer must be reflected in increased and accessible adaptation finance, fairer financing terms, transparent accounting, effective loss and damage arrangements and credible pathways towards a just transition.

For the Least Developed Countries (LDCs) and other highly climate-vulnerable countries, the stakes could not be higher. Delayed finance means delayed protection, greater economic losses and a heavier burden on future generations.

Climate negotiations must move beyond the politics of headline figures. Governments should be judged by what they deliver, how quickly resources reach vulnerable countries and whether those resources produce measurable improvements in people’s lives.

The international community must not make the future of vulnerable countries more dangerous by transferring the costs of a global crisis onto their shoulders. Nor should the success of climate diplomacy be measured solely by the agreements reached in conference halls.

It must be measured by whether a farmer can protect a livelihood, a coastal family can access safe drinking water, a community can recover from a disaster and a country can pursue development without falling deeper into debt.

The message for COP31 should be unequivocal: climate justice is not charity. It is a matter of responsibility, equity and the fulfilment of commitments already made. The time has come to move climate finance from the accounting of promises to measurable improvements in human lives.

M Rezaul Karim Chowdhury is Executive Director of COAST Foundation. M. A. Hasan is Head of Climate Change at COAST Foundation.