World Climate Finance Gap at $4 trillion, as the US exit!

By S R Ranjan: The US, as it believes climate change is “a hoax” , withdrew from the Paris Agreement and exit from world organisations like IPCC. Amidst the world turmoil, geo-political crisis and polarization marked global wars, regional conflicts, trade barriers and economic uncertainties, market volatility and human suffering, climate change, climate action and climate finance remain the eminent, pertinent and challenging global issues that need lasting solutions.

World reports have flagged that although global capital markets were flush with funds, very little money is being directed for climate action. India’s Economic Survey reportedly flags climate finance gaps at $4 trillion. Economic Survey 2025-26 reportedly says the challenge is not shortage of global capital but  structural  misalignment. Markets were flush with funds but very little money were directed for climate action and even that was being predominantly invested in developed countries or China.

In 2023, global climate finance totalled $1.9 trillion of which private capital accounted for nearly $1.3 trillion. More than half of this private finance flowed to advanced economies with China attracting another 30% while developing countries, excluding China, got only about 15%.

The Survey emphasized on the need for better funding in critical areas like climate adaptation and urban infrastructure It said that to bridge the gap, bond markets are crucial for financing climate infrastructure that requires substantial upfront capital. It called for coordinated reforms in multilateral development banks and strong governance to ensure climate finance supports growth.

India has already taken several steps to mobilise climate finance, including issuing sovereign green bonds to fund low-carbon public infrastructure, providing policy signalling and market benchmarks.India’s around 83% of finance for mitigation and 98% for adaptation currently is sourced domestically.

- S R Ranjan, A Journalist

(Singh Rakesh Ranjan)

 #Climatechange #Environment #Climatefinance #states #Climateaction #World #India

Send your feedback: info.squaremedianetwork@gmail.com

(Representational images, Sources)