A recent OECD report confirms that developed countries finally met the long-standing pledge of providing $100 billion annually in climate finance to developing nations. 

OECD Report Findings:

  • Achievement: In 2022, developed countries provided and mobilized $115.9 billion in climate finance to developing countries.
  • Timing: This achievement was realized two years later than the original 2020 target but one year earlier than OECD’s projections.
  • The public climate finance accounted for close to 80% of the total financial flow in 2022. 

Organisation for Economic Co-operation and Development (OECD)

  • It’s an intergovernmental economic organization of 38 countries for stimulating economic progress and world trade.
  • Established in 1961 and headquartered in Paris.
  • OECD member countries account for 63% of world GDP, three-quarters of world trade, 95% of world official development assistance, over half of the world’s energy consumption, and 18 percent of the world’s population.


  • 2009 Commitment: At COP-15 (Copenhagen Summit), developed countries pledged to provide $100 billion annually by 2020 to help developing countries mitigate and adapt to climate change.
  • Paris Agreement (2015): Article 9 mandates developed countries to provide financial resources for both mitigation and adaptation efforts in developing countries.
    The Paris Agreement (2015) is a global pact to combat climate change. It aims to limit global warming to well below 2°C, ideally 1.5°C, by reducing greenhouse gas emissions (NDCs). Countries report progress and receive financial aid (developed to developing) for mitigation (reducing emissions) and adaptation (building resilience).

2022 Climate Finance Distribution:

Loans Dominating:

  • 70% of public climate finance in 2022 were loans, and only 28% were grants.
  • Lower-income countries: 64% of public finance was grants.
  • Lower-middle-income countries: 13% of public finance was grants.

Multilateral Development Banks (MDBs): Between 2016-2022, close to 90% of financing provided by multilateral developmental banks (MDBS) took the form of loans.

  • The same applies to bilateral providers, with 57% as loans and 39% as grants. 
  • Multilateral climate funds, on the other hand, provided 54% as grants and 39% as loans.

Mitigation vs. Adaptation: Most finances went towards mitigation, with adaptation receiving $32.4 billion (2022).

Types of Climate Finance

Public Finance: 

  • Bilateral (country-to-country aid) and multilateral (through organizations like the World Bank).
  • Primarily in the form of grants but also includes loans. 

Private Finance: 

  • Investments from banks, pension funds, and other private entities seeking financial returns.


  • Delayed Delivery: Developed nations missed the initial 2020 target.
  • Composition: Loans constitute a significant portion (70%) of public finance, raising debt concerns for developing countries.
  • Transparency & Adequacy: Experts question the accounting methods and whether $100 billion is enough to address developing countries’ needs.
  • Grant vs. Loan Ratio: A larger share of grants is crucial for sustainable support.

Looking Ahead:

  • The $100 billion goal is considered inadequate to meet developing country needs. Emerging markets and developing countries (excluding China) need $1 trillion annually by 2030.
  • Negotiations are underway for a “New Collective Quantified Goal” with a higher target, improved structure, and diversified sources of finance.
  • Reaching an agreement by the end of 2024 remains a challenge. Divergences remain on basic elements such as contribution and recipient criteria.

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