At a moment when all countries need to raise their ambition on climate action, the opposite seems to be happening.
Headline after headline show lackluster progress and rolled-back commitments. For one, climate change was a low priority for voters in 2024’s global wave of elections; only the UK elected a government that ran on a platform of climate ambition. Overseas development aid is decreasing — down an estimated 9-17% in 2025 — due to budget cuts in Europe and the dramatic dismantling of USAID. Scientists warn that we need to reduce emissions 7% every year to avoid the worst climate impacts, but in 2024, emissions actually increased by 0.9%. And finally, geopolitical tensions and trade wars are disrupting the global economy and making it tougher to invest in a clean future.
Meanwhile, the urgency for climate action has never been greater. Last year, droughts, floods, extreme heat and other climate disasters displaced a record 46 million people and caused $417 billion in economic losses.
These setbacks are real. They will slow us down. But they will not derail us.
Despite depressing headlines, momentum for the green transition we need is still building. In 2024, renewables made up 90% of new energy additions; they are now the cheapest source of new electricity in most countries. One in five new cars sold worldwide last year were electric.
Big, systemic changes like these aren’t happening fast enough — not yet. But as we’ve seen with other big societal shifts — voting rights, internet penetration, smart phone use — change happens piecemeal and slowly until you hit a tipping point. It’s the job of policymakers, philanthropies, businesses and organizations like ours to bring that threshold closer — especially now.
The good news is that we know what it takes to accelerate the green transition, even in the face of a new world order. Decades of experience and recent glimmers of progress show us that a path forward is possible. It will take collective action and focus around three areas:
1) Moving From Cutting Carbon to Better Lives
The green transition is not at odds with economic prosperity. In fact, investing in climate-friendly and nature-positive economic growth is the only way to ensure a prosperous future. This is not only true scientifically; companies and countries alike are demonstrating it in the real world. Ingka Group, the largest IKEA retailer, reduced its climate footprint over 30% while growing revenues by more than 23%. Forty-nine countries, including the US, France and Germany, have found ways to continue growing their economies without increasing emissions.
But this message is not clear to leaders, or the people who vote for them. Even in countries with strong public support for climate action, pro-climate parties are losing at the polls. Why? People don’t yet see how the low-carbon transition will improve their lives.
A durable economic transition cannot take place without political support. To succeed, every aspect of our approach and narrative needs to prioritize people — not carbon. For example, clean energy is not just a climate solution; it’s oftentimes the most affordable and reliable power source. Increased electric vehicle use isn’t just about cutting fossil fuel emissions; it can create manufacturing jobs while expanding access to transport and reducing air pollution, which causes 1 in 5 deaths worldwide. Planting trees in cities adds beauty while also keeping people cool during extreme heat.
A good example of pro-people, pro-planet policy support is Denmark’s recent Green Tripartite Agreement. The plan will restore nature, pay farmers to reduce their nitrogen pollution and tax emissions from livestock production in a way that not only incentivizes, but supports farmers in making their production more efficient. Similarly, Mexico City’s bus rapid transit system has continued to expand and evolve because it’s brought a host of benefits with it: reduced congestion, cleaner air, better and cheaper access to jobs, and other opportunities.
These kinds of win-win solutions are popular with people. But to really take off, they need investment, policies and other targeted support to make them happen quickly, affordably and without causing undue harm to those whose jobs and communities rely on the old economy. The clean energy transition is inevitable — but even this piece will not happen fast enough on its own. We need to work systematically to remove the barriers to the transition across all sectors and ensure people reap the benefits of a clean and resilient future. Not all policies will be a win-win for everyone, but the initial steps that are good for people can provide political momentum for the harder choices later.
2) Transitioning Large, Emerging Economies
Leadership from middle-income economies is critical for the green transition. They produce half the world’s greenhouse gas emissions, a percentage that will only increase in the coming years. They’re home to most of the world’s remaining tropical forests, centers of biodiversity. And they house three-quarters of the world’s population, including 62% of the world’s poorest people. If large middle-income countries like China, India, Indonesia, South Africa and Brazil do not successfully reduce their emissions, protect their natural ecosystems or adapt to oncoming climate impacts, the entire green transition will be at risk. A safe world will be out of reach.
Thankfully, a new set of leaders is embracing the green transition as an economic strategy for their next phase of development. Indonesia has committed to make its forests and land use sector a net-carbon sink by 2030, aligning economic incentives and uplifting forest communities in these efforts. Colombia’s president promised to phase out fossil fuels, one of the first major oil- and coal-producing nations to do so. And for many of these countries that lack oil and gas reserves, the clean energy transition is becoming a critical energy security strategy.
The geopolitical realignment unleashed by U.S. trade and security policies will accelerate our journey towards a more multipolar world. Middle-income countries will become even more important in shaping global discourse. These nations —many of which rely heavily on trade to sustain growth — have a strong interest in preserving and strengthening multilateral cooperation. For them, a stable, rules-based international system — such as treaties like the Paris Agreement on climate change — is not just a global good; it’s essential to achieving their development goals. Their choices on the world stage will determine the success of the green transition.
3) Looking Beyond Aid to Financing
Developing countries will not successfully transition without adequate finance. They need $1.3 trillion per year of external finance by 2035 to successfully mitigate and adapt to climate change.
Last year at COP29 in Baku, countries agreed to mobilize $300 billion per year for developing countries by 2035 and work towards $1.3 trillion. Recent cuts to bilateral aid are disappointing, but they were always a small part of the climate finance puzzle. Other public sources of climate finance can be expanded through capital increases to multilateral banks — which can turn $1 of taxpayer money into $4-10 — and innovative financing mechanisms like aviation and maritime taxes. Still, at best, experts agree that only half of the $1.3 trillion can be filled with public funds.
Because the remaining half can only come from the private sector, countries must focus their efforts accordingly. India offers a model of success: aligning sectoral targets with its national climate plan (NDC), enacting supportive policies at all levels for financing the energy transition, and allocating a significant amount of its national budget — $2.4 billion in 2024 — in clean energy. These steps collectively have attracted substantial external investment in India’s energy transition.
Attracting sufficient public and private climate finance requires a focused and coordinated approach. Transition investments in developing countries should follow a “capital stack” model: the fund most willing to take the initial project risk sits at the bottom, supporting other kinds of capital with reduced appetite for risk that are added to the stack. As we see in India, the bottom of the stack needs to be clear public policies and regulations, followed by public investment. The next layer can be capital from bilateral aid and multilateral development banks (MDBs). Finally, the higher layers of the stack will comprise different kinds of private capital from domestic and international sources. The central principle of vertical integration of capital with different appetite for risk is critical to unleash finance at scale.
In a world of shrinking aid, remaining development aid becomes even more precious and should be utilized strategically. While concessional finance (such as grants and below-market-rate loans) should be directed to the poorest and most vulnerable countries for investments with high social and environmental but low commercial return, other types of aid play critical roles in the stack to leverage private capital.
There are signs that countries are taking these financing challenges seriously. Countries like Brazil, Kenya, South Africa and Barbados are putting forward “country platforms,” bold proposals to attract more international finance for what they see as their biggest climate and nature priorities. This innovative approach allows countries to centralize finance around a clear plan, rather than continuing to allow disparate initiatives to be financed from separate sources.
Delivering Systemic Change in a Changing World
It’s easy to feel hopeless in times like these. But with crisis comes opportunity.
Change is happening. Accelerating it requires a level of focus, collaboration and innovation that we’ve never had before. We must move away from a narrative of decarbonization to one that focuses on building a better, more prosperous future for people. While the transition in every country is important, we need to prioritize large, middle-income nations for their potential to unlock exponential change. And while the reduction in overseas aid is disheartening, we must focus on the bigger picture: prioritizing existing resources to unlock the $1.3 trillion needed for the global transition.
We know the solutions. Now, we need to deliver.
