Even our best-case funding scenario paints a grim picture for many of the world’s most climate-vulnerable places. Yet there is reason to hope.
To paraphrase a well-known quote: “It’s not a principle until it costs you money.”
COP29 – the ‘finance COP’ – saw a number of important new funding commitments. Key among them is the New Collective Quantified Finance Goal (NCQG), which provides a framework for countries to mobilise at least $300 billion per year in climate finance, and new pledges by multilateral development banks and commitments for UNFCCC climate funds.
Ostensibly, these new financial commitments should prioritise those who are the most vulnerable, and least ready to adapt to, climate impacts: a prerogative long enshrined in the UNFCCC and the Paris Agreement and reiterated in the NCQG text itself.
Yet our analysis of the latest climate finance data shows that fragile and conflict-affected countries – which are some of the most vulnerable to climate change – remain locked out of funding. This is no geographical accident: while violence, armed conflict, fragile institutions or insufficient state support all increase people’s vulnerability to climate impacts, they also mean that climate funders and the international community often consider these places too ‘risky’ to invest in.
How much climate finance flows to fragile and conflict-affected countries – and how much do they need?
Our analysis shows that in 2022, public bilateral and multilateral sources committed $10.9 billion to fragile and conflict-affected countries. This was less than 10% of the international climate finance mobilised from public, private, bilateral and multilateral sources ($116 billion in total), and under 2.5% of official development finance.
The proportion of overall climate finance received by fragile and conflict-affected countries in 2022.
Climate finance flows to FCAS_ODI Global March 2025
Climate finance flows to FCAS_ODI Global March 2025
The amount of finance flowing to fragile and conflict-affected countries is not just small in comparison to overall funding. It also falls far short of these countries’ stated needs. Based on their official submissions to the UNFCCC, fragile and conflict-affected countries will need at least $41.5 billion in climate finance each year up to 2030. And this is most likely an underestimate: only 23 of the 37 countries in our study submitted costed needs, and those that did may lack the resources to conduct a full analysis of what they require.
If we assume that fragile and conflict-affected countries’ needs should be met primarily by public bilateral and multilateral funding – due to their extremely limited domestic and private resources – then this means that fragile and conflict-affected countries received at most only 26% of the climate finance they need.
Fragile and conflict-affected countries’ climate needs versus finance in 2022
A Flourish chart
What does the future hold for climate finance to fragile and conflict-affected countries?
The persistent underfunding of climate action in fragile and conflict-affected countries is occurring against a backdrop of substantial cuts to overseas development assistance. In the last two years, 9 out of 16 traditional bilateral donors have announced cuts to their development budgets. Most recently, the UK Government has cut its aid budget by almost half. The US Government, meanwhile, has withdrawn (again) from the Paris Agreement and cancelled a third of the country’s climate finance channelled through USAID.
These cuts may have a critical impact on the world’s most climate vulnerable, by reducing the flow of support, and (likely) focusing resources on immediate lifesaving interventions, rather than longer-term projects which build fragile and conflict-affected countries’ stability, resilience and ability to adapt to a changing climate.
This raises an important question: what level of climate funding can fragile and conflict-affected countries reasonably expect to access over the next few years?
We created four scenarios for increased climate finance provision to fragile and conflict-affected countries. These scenarios assume that future climate finance will be primarily mobilised by developed countries, multilateral development banks, UNFCCC climate funds and a few other multilateral organisations to reflect on-the-ground realities. We did not include funding from fragile and conflict-affected countries themselves, due to their limited domestic and private resources. We also did not include potential funding from regional development banks, new bilateral contributors, and innovative sources due to a lack of information or uncertainty in their implementation.
Each scenario required us to make a number of assumptions about the expected annual growth rate for each of these funding sources based on a combination of existing pledges or historical growth. Together, these scenarios reflect a range of trends in global development cooperation: from the slashing of aid budgets by many traditional donors, to ongoing reforms in the multilateral system, such as the MDBs reform agenda. (You can find out more about our approach, sources and assumptions here.)
Our worst-case scenario assumes very low ambition beside existing commitments to scale up climate finance, with zero growth in bilateral funding. The ‘bilateral cuts with larger MDBs’ scenario reflects what may happen if MDBs’ contributions grow faster, based on the partial implementation of recent G20 recommendations on expanding lending capacity, while bilateral funding remains stationary. The ‘pre-crisis status quo’ scenario uses historical bilateral growth rates, accounting for commitments already locked in until 2025 and a better outlook beyond 2028, and recent multilateral commitments to calculate the increase in contributions. Finally, in our increased efforts scenario, all funders see a higher annual growth rate, and climate funds will meet their COP29 commitments to triple funding from 2022 levels.
Climate finance flows to fragile and conflict-affected states by 2030: four scenarios
A Flourish data visualization
Our four scenarios paint a broad picture of future finance. They show that by 2030, the 37 fragile and conflict affected countries in our study could access between $17.4 billion (in the worst case scenario) and $23.4 billion (in our most ambitious, increased efforts scenario) of climate finance as a group.
Critically, these amounts are far lower than their costed needs of $41.5 billion per year. Even under the most ambitious scenario, the needs of fragile and conflict-affected countries would still be 110% higher than the finance provided.
Even more critically, these scenarios do not suggest a decrease in funding for other climate vulnerable countries but explore what an ‘equitable share’ should be for fragile and conflict-affected countries under an overall increase in finance for all developing countries to meet the NCQG goal. (See our approach for more information).
Reason to hope?
Against this gloomy outlook, there are some reasons to hope that these scenarios may underplay the potential increase in climate finance to some of the world’s most vulnerable contexts – yet they should not be overstated.
Firstly, while our baseline data is the latest we can access, it is still more than two years old. Since then, some funders have accelerated their commitments. For instance, in 2023 the Green Climate Fund proposed funding for their new strategic plan which ranges from between $2.05 to 3.2 billion per year: an amount which is almost double their commitments in 2022 ($1.5 billion). This would mean a higher compound annual growth rate for UNFCCC funds, which would lead to higher total projections – even when we account for the USA’s rescinding of $4 billion in pledges to the Fund.
Secondly, emerging donors and large developing countries, such as China, the Gulf Countries and South Korea, have long engaged with fragile and conflict-affected countries. While not accounted for under UNFCCC commitments, these countries’ financial support to resilience-building projects - including renewable energy, water and sanitation, and disaster risk reduction - is often comparable to Annex II countries. For instance, our estimates using AidData show that between 2013 and 2021, China provided an average of $231 million in climate-related finance to fragile and conflict-affected countries; this is on par with the UK, which provided $240 million.
Thirdly, the recent establishment of a climate network for conflict-affected countries should bring new energy to fragile and conflict-affected countries’ calls for climate finance reform. The Improved and Equitable Access Network, which is the first to be led and owned by conflict-affected countries, was formed at COP29, and its growing membership already includes Burundi, Chad, Iraq, Sierra Leone, Somalia, Timor Leste and Yemen.
These welcome developments do not outweigh aid cuts from traditional funders. Yet the existential crisis in which the multilateral system finds itself may be an opportunity to rethink how donors and funds could better support some of the most climate-vulnerable people in the world. So far it has left them behind.