The Broken Promise of Climate Finance: Will the Global South Ever See Real Support?
In 2015, the Paris Agreement established a critical commitment: wealthy nations would mobilize at least $100 billion annually by 2025 to assist developing countries in transitioning to renewable energy and adapting to the impacts of climate change. However, as the 2025 deadline approaches and even beyond – with the US withdrawing from the agreement again in 2026 – the flow of funds has been slow, insufficient, and often tied to conditions that prioritize donor interests.
The $100 Billion Target: A History of Delays and Disagreements
While the Organisation for Economic Co-operation and Development (OECD) reported the $100 billion target was first met in 2022, many nations in the Global South argue the funds are inadequate. Calls for increased funding have been a consistent theme at UN climate summits since Paris. At COP30 in Brazil in 2025, demands escalated to $1.3 trillion annually by 2035 to adequately address climate action needs.
Indonesia’s JETP: A Case Study in Broken Promises
A prime example of the challenges surrounding climate finance is the $20 billion Just Energy Transition Partnership (JETP) with Indonesia, announced in 2022. Indonesia, a major coal exporter and vulnerable archipelago, pledged to source 29% of its energy from renewables by 2030 (or 41% with international support). JETPs are designed to accelerate the shift to clean energy in coal-reliant economies through a blend of public and private funding.
However, initial results have been disappointing. By mid-2024, only $144.6 million had been launched or was in the final stages of discussion, with much of the funding allocated to feasibility studies and technical assistance rather than actual clean energy projects. Eco-Business reported in October 2024 that no pledged funds had yet translated into novel clean energy projects or the retirement of coal-fired power plants.
Governance Issues and Donor Control
A key issue is governance. The JETP secretariat, intended to be Indonesian-led, lacked dedicated funding for a proper team and required approval from developed-country partners for its plans. Working groups were funded by organizations like the OECD’s International Energy Agency, the World Bank, and the Asian Development Bank – institutions largely controlled by donor nations.
Early project proposals, such as the closure of the Cirebon-1 coal power plant, were dominated by companies from donor countries, and plans for its early retirement have since been shelved. The JETP, some Indonesian policymakers believe, has become “an instrument of control” used by G7 countries to counter China’s influence in Southeast Asia.
The Shifting Landscape of Climate Finance
As developed economies face fiscal pressures, climate finance, often drawn from aid commitments, is becoming increasingly uncertain. This raises concerns that justice for historical emissions and support for those most vulnerable to climate change will be further marginalized. The potential for a US withdrawal from the Paris Agreement, and from initiatives like Indonesia’s JETP, under a future administration adds to this uncertainty.
FAQ: Climate Finance and the Paris Agreement
- What was the original climate finance pledge made in the Paris Agreement? Wealthy nations committed to mobilizing at least $100 billion annually by 2025 to support climate action in developing countries.
- Has the $100 billion target been met? The OECD reported it was met in 2022, but many developing countries argue the funds are insufficient.
- What is a JETP? A Just Energy Transition Partnership is designed to help coal-reliant emerging economies accelerate their shift to clean energy through blended finance.
- Why are JETPs facing criticism? Concerns include governance issues, donor control, and a lack of tangible results in terms of new clean energy projects.
Did you know? The three UNFCCC member states which have not ratified the Paris Agreement as of January 2026 are Iran, and the United States (having withdrawn and rejoined multiple times).
Pro Tip: Follow the UNFCCC website (https://unfccc.int/process-and-meetings/the-paris-agreement) for the latest updates on climate finance commitments and progress.
As the world grapples with the escalating impacts of climate change, the need for equitable and effective climate finance has never been more urgent. Without a genuine commitment from developed nations to deliver on their promises, the goals of the Paris Agreement – and the future of vulnerable communities – remain at risk.
