Developed countries committed to mobilising $100 billion in climate finance per year to support developing countries in choosing climate-friendly development pathways and adapting to the impacts from climate change, starting from 2020 and until 2025. But at COP26, a “delivery plan” requested from the UK COP Presidency concluded that it appeared “unlikely” the goal had been met in 2020. According to the most recent report of the UNFCCC’s Standing Committee on Finance, climate finance in the years 2019 and 2020 averaged no more than $40.1 billion per year.

With the $100 billion target sunsetting in 2025, negotiations are underway to define a new target kicking in post-2025, the so-called “new collective quantified goal.” COP27 will see the first ministerial meeting on this new climate target that’s faced with many question marks around how high it will be, and what it can look like in detail.

But climate finance also knows a target that’s qualitative rather than quantitative, enshrined in Article 2.1c of the Paris Agreement. This target has to do with making all finance flows, not just public ones but also those in the private sector, consistent with climate-friendly development. A ministerial dialogue at COP27 may contribute to fleshing out what this target means or how to achieve it.

Currently, climate finance is far from meeting both the needs and the priorities of developing countries as the bulk of it goes to mitigation (57% on average in the years 2019 and 2020), not to adaptation (28%). At COP26 in Glasgow, wealthy nations committed to doubling finance for climate adaptation by 2025. But SEI research has shown that adaptation finance is falling short in more ways than one.