At the 2024 UN climate change summit (COP29), governments agreed to scale up public and private finance for developing countries to at least $1.3 trillion a year by 2035 to support their climate resilient, low-emission development.
But reaching that goal is a steep jump from where we are today. The Climate Policy Institute estimates, for example, that in 2025, only around $200 billion (likely an underestimate due to data limitations) reached these countries.
To help bridge this gap, last year Brazil and Azerbaijan, the COP30 and COP29 presidencies, presented the Baku to Belém Roadmap to 1.3T, suggesting how the target could be reached. The roadmap outlines five big areas where public and private institutions need to act: concessional finance, debt sustainability, private sector and the cost of capital, institutional capacity and international rules and standards.
Introducing this roadmap didn’t happen without hiccups. Little time was available for governments to discuss it, leaving few feeling like they had true buy-in on the process, and many wondering about next steps. Now the focus is building buy-in to drive implementation.
This pressing need for expansion comes at a time when international climate finance is facing an onslaught of challenges. These include falling concessional funding and increasing costs associated with global conflicts. At the same time, these conflicts have revealed renewable energy to be a more stable energy source than fossil fuels, that also often provide a higher and more predictable financial return on investment. Meanwhile, investments in resilience can enhance security, particularly in conflict-prone regions, where environmental stress can exacerbate political instability and competition over scarce resources.
Now more than ever, unity among governments, financial institutions and others around a path toward the $1.3 trillion goal is critical for its success. The challenge will be to build effective coalitions for action around vital sources of funding. Policy initiatives like those associated with the Roadmap to 1.3T, while not an automatic fix, can help bring these together. At the same time, a few topics in the roadmap, like remittances from friends and family members, were controversial and could be deemphasized going forward.
Here are three critical areas facing headwinds and in need of this collaborative action:
1) Defend the Multilateral Development Banks
Multilateral Development Banks (MDBs) are currently a significant channel for international climate finance. The Roadmap to 1.3T calls for MDBs — which have already committed to providing $120 billion per year in climate finance by 2030, plus another $65 billion a year of mobilized private finance — to provide even more to reach the $1.3 trillion target. MDB climate finance doubled between 2020 and 2024 (the last year data is available), but this progress is under attack, along with their future commitments.
The United States is leading a fight to try to rid the banks of their climate focus, arguing for example, that the World Bank should scrap its climate finance goal. In a statement, the U.S. Treasury Secretary said the climate finance target “impedes market efficiency, distorts incentives, and undermines efforts to reduce poverty and spur economic growth.”
To make sure the MDBs can play their full role in the $1.3 trillion, shareholding countries need to come together to protect climate finance as a significant percentage of MDB portfolios while also growing the overall size of MDB investing, including through capital increases, as called for in the roadmap.
2) Bring Back Concessional Bilateral Finance
Bilateral finance, where funding flows directly from one country to another, is one of the first things mentioned in the Roadmap to 1.3T and for good reason. Historically, such finance, directly deployed by individual governments, has made up around a third of international climate finance. Sadly, bilateral funding for climate is in decline. The biggest impact has come from the Trump administration, which has essentially eliminated international climate funding from the United States (it stood at $11 billion in the last year of the Biden administration). But the U.S. is not alone. In the face of rising military costs from international wars and political shifts, many European countries are also reducing their funding.
Reversing this downturn will not be quick and will require consistent domestic and international political pressure and coalition building. It will involve coalitions of countries bucking the trend of decreasing development assistance and may be pushed by involvement from higher income countries not historically considered climate finance providers — like China, Korea or United Arab Emirates. It will mean rebuilding the case for development finance with an emphasis on the broad benefits: improved wellbeing through greater resilience to shocks, reduced global emissions, and enhanced global cooperation and solidarity.
3) Shift Large-Scale Private Investors
According to the High Level Expert Group on Climate Finance, the Roadmap to 1.3T estimates that around half of the $1.3 trillion will need to come from private businesses and financial institutions, a sixteenfold increase over today. This is massive growth that will need to come from many different types of private investors. Yet political shifts are also impacting how the private sector engages with sustainability and may be reducing sustainability-focused investments.
The UK’s Emerging Markets and Developing Countries (EMDE) Taskforce, an industry-led initiative, assessed opportunities for institutional investors, who manage massive pools of capital, to contribute to the $1.3 trillion goal. They find that an increase in climate investments in emerging and developing markets is feasible — if better conditions emerge. But these investors need supportive political and regulatory environments in both their home and host countries, but without overreliance on precious public funds. They also need to create internal incentive structures that encourage thinking outside normal investment patterns.
A broader international coalition of private financial institutions aimed at increasing cross-border climate-aligned investments into EMDEs could help further clarify barriers, create connections across private investors and government, and build comfort with new investment types and geographies.
An Important Year
The Roadmap to 1.3T traverses the space between the climate negotiations and the real world of finance — a critical space to fill now that international finance targets and agreements are in place and the real job is implementation. Despite political headwinds, the reasons for investing are as strong as ever: more secure energy sources, more resilient food systems, cheaper and cleaner transportation, often with solid financial returns.
This moment calls for prioritization and focus, and for new and stronger alliances between coalitions of the willing. Over the next 10 years, strong partnerships will need to continue to advocate for each major step on the road to the $1.3 trillion.
Countries, multilateral development banks and private investors are increasingly aligning behind scaling up climate finance because there is no viable alternative to managing the growing economic, social and physical risks associated with climate change. The costs of inaction are rapidly exceeding the costs of investment, making climate finance not only a matter of resilience and risk management, but also of economic opportunity.
At the same time, low-carbon markets are proving to be increasingly profitable and attractive. Evidence from Brazil and across emerging and developing economies shows a steady growth in capital flows toward decarbonization, renewable energy, sustainable infrastructure and climate-resilient development. Reflecting this momentum, 2026 is on track to become the strongest year for clean industry investment on record, with investors committing to 19 commercial-scale projects worth $43 billion in the last six months alone — more than twice the pace observed a year earlier, despite persistent geopolitical uncertainties. These trends demonstrate that climate finance is no longer driven solely by environmental commitments, but by clear economic incentives, competitive advantages and the need to safeguard long-term prosperity.
The work to reach the $1.3 trillion goal will take a decade, but what happens now will help determine whether we achieve success in 2035.
WRI is partnering with the Brazilian government to bring people together in places like Addis Ababa, Mumbai and New York over the next six months to discuss the Baku to Belém Roadmap to $1.3T and next steps. We aim to help build momentum and support partnerships around its most vital steps — including increased funding from the MDBs, bilateral financial institutions and the private sector.
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