Climate Finance: Taking a Position on Climate Futures by Gareth Bryant and Sophie Webber

CHAPTER 1
 INTRODUCTION: FINANCE FEELS THE HEAT
 In contemporary global capitalism, both finance and climate change reach 
into every aspect of our lives. These two phenomena are increasingly coupled 
together as “climate finance”. Finance is core to calculating and resourcing 
decarbonization and climate repair. Climate change is also now central to the 
way money flows across governments, businesses and households. Financial 
instability and crisis are, moreover, interlinked with multiplying climate 
impacts and tipping points. Climate finance has, in short, become integral to 
the political economy and economic geography of climate change. As finance 
has been positioned as the solution to climate change, different actors have 
engaged with climate finance to take competing positions on what the future 
of climate change and capitalism might look like. The different tools of cli-
mate finance that have emerged both reflect struggles over climate change 
and are actively shaping climate transition pathways. The politics of climate 
change is now being fought on the terrain of climate finance.
 The Copenhagen 2009 and Paris 2015 Conferences of the Parties (COPs) to 
the United Nations Framework Convention on Climate Change (UNFCCC) 
were both monumental meetings for international climate politics and cli-
mate finance. As the global agreement among almost all countries to attempt 
to avoid “dangerous” climate change, the UNFCCC makes decisions and 
seeks progress through its annual COP meetings. At the Copenhagen COP in 
2009, one of the major advances was a commitment by rich countries –  which 
under the Convention are called Annex I, or developed and industrialized 
countries –  to fund mitigation and adaptation actions in poor countries –  
called non- Annex I, or developing countries. Initially, there was a commitment 
to provide US$30 billion per year of climate finance, and then up to US$100 
billion per year by 2020. By the Paris COP in 2015, the Green Climate Fund 
(GCF), a newly established financial mechanism of the UNFCCC, was chosen 
to attract, distribute and programme this “climate finance”. Since then, the 
GCF has disbursed funding to more than 200 projects in 130 countries that 

seek to reduce emissions or facilitate adaptation, from increasing urban 
water supply to building solar photovoltaic (PV) power plants and much in 
between. Notwithstanding disagreements, including about governance and 
control and the balance between mitigation and adaptation projects, the GCF 
was widely celebrated as a step in the right direction towards recognizing the 
additional costs of climate change for poor countries.
 By the Glasgow COP summit in late 2021, the US$100 billion pledge 
was again in the spotlight, this time for its numerous and systemic failures. 
Developed countries had fallen short of the annual US$100 billion target 
in climate finance: the Organisation for Economic Cooperation and 
Development (OECD), which tracks climate finance at the request of donor 
countries, found that only US$83 billion in climate finance was mobilized 
in 2020, building on approximately US$80 billion per year in 2018 and 2019 
(OECD 2022a). Further, for critics, this figure is vastly inflated because it 
counts funding that is only barely related to climate change, is not additional 
to already committed development funding and it includes the value of loans 
that must be repaid. As a result, the international non- government organ-
ization (NGO) Oxfam argued that the climate finance mobilized was closer 
to US$20 billion per year (Carty, Kowalzig & Zagema 2020). There are also 
debates about the quality, character and benefit of the projects the GCF has 
supported. This failure in climate finance is a fundamental abrogation of 
responsibility from those who have caused climate change to those who will 
experience its impacts most acutely.
 The GCF and other similar pledges have dominated public debate about cli-
mate finance. In this frame, climate finance references finance that goes from 
developed countries to developing countries as a reflection of commitments 
to the Convention and the base injustices of climate change. The goal of this 
climate finance is to cover the costs of adapting to climate impacts and decar-
bonization in countries that might not otherwise be able to afford it. This cli-
mate finance ought to be “new and additional” to any rich country’s existing 
development assistance to avoid double counting or greenwashing existing 
aid commitments. It is often assumed that climate finance is public, grant 
funding with no strings attached; however, the calculation of US$83 billion 
in climate finance mobilized in 2020 includes both loans and private sector 
“co- financing” for climate activities. Commonly, funding refers to resources 
such as grants or state allocations that are not repaid, whereas co- financing 
suggests financial terms around the repayment of debt, usually with interest, 
or ownership equity, to capture returns.
 But let us put the US$83 billion in perspective. The UNFCCC defines “cli-
mate finance” as all public, private and alternative financing that supports 
mitigation and adaptation. Global flows of finance with some kind of climate 
goal well exceed the COP targets for international climate finance. As the 

Climate Finance: Taking a Position on Climate Futures by Gareth Bryant and Sophie Webber