{"id":83368,"date":"2025-01-14T14:33:32","date_gmt":"2025-01-14T14:33:32","guid":{"rendered":"https:\/\/www.climatepolicyinitiative.org\/?p=83368"},"modified":"2026-04-29T13:15:42","modified_gmt":"2026-04-29T13:15:42","slug":"leveraging-ndc-updates-to-bridge-the-climate-finance-gap","status":"publish","type":"post","link":"https:\/\/www.climatepolicyinitiative.org\/id\/leveraging-ndc-updates-to-bridge-the-climate-finance-gap\/","title":{"rendered":"Leveraging NDC updates to bridge the climate finance gap"},"content":{"rendered":"\n

While the USD 300 billion annual climate finance commitment set at COP29 is a first step to help fill the climate finance gap, the upcoming updates of Nationally Determined Contributions (NDCs) in 2025 offer a further opportunity for actors to work together and enable the scaling up of financing from all public and private sources.  Achieving this requires major strides to improve the quality, transparency, and coverage of country-level climate targets and related estimates of their climate finance needs. <\/strong><\/p>\n\n\n\n

How large is the climate finance gap?<\/strong><\/h2>\n\n\n\n

While climate finance has grown at unprecedented rates in recent years, reaching USD 1.46 trillion in 2022<\/a>, these flows still fall short of global needs. CPI\u2019s latest Global Landscape of Climate Finance<\/a> shows that we need to invest almost USD 7.4 trillion a year globally through 2030, of which at least USD 2.4 trillion is needed for emerging markets and developing economies (EMDEs), excluding China. In addition, EMDEs are often the most vulnerable to the impacts of climate change, despite their relatively low contributions to global greenhouse gas emissions.<\/p>\n\n\n\n

For example, Africa is one of the most climate-vulnerable regions\u2014historically experiencing annual losses of 10-15% of GDP due to climate change\u2014yet its mitigation and adaptation action is severely underfunded. The continent\u2019s annual climate flows in 2021\/22 accounted for only 23% of the estimated amount required to implement African countries’ NDCs and meet their climate goals by 2030<\/a>. Many vulnerable EMDE countries require substantial international support to meet their climate objectives.<\/p>\n\n\n\n

How much international support is needed to meet EMDE\u2019s climate finance needs? <\/strong><\/h2>\n\n\n\n

The New Collective Quantified Goal on Climate Finance (NCQG) established at COP29 sets a new target for developed countries to mobilize finance for climate action in developing countries at USD 300 billion annually by 2035. Three times larger than the USD 100 billion per year set at COP15 in 2009, the new commitment also highlights the need to further mobilize and unlock other pools of capital to meet the needs.  <\/p>\n\n\n\n

This gap in financial commitments also brings renewed attention to the implementation of Nationally Determined Contributions (NDCs), which outline each country\u2019s climate action plans.<\/p>\n\n\n\n

Annual climate finance needs of EMDEs as outline in existing NDCs is USD 400 billion. Only 13% of these needs are classified as being fundable through domestic public sources (referred to as \u201cunconditional\u201d contributions). The remaining climate finance gap will require international funding (\u201cconditional\u201d).<\/p>\n\n\n\n

 The future of NDCs and international climate finance<\/strong><\/strong><\/h2>\n\n\n\n

As noted above, the needs stated in NDCs are significantly lower than the total global finance required for 1.5\u00b0C alignment, and this does not even account for countries that have not yet quantified their climate finance needs in their NDCs.  <\/p>\n\n\n\n

Figure 1: Unconditional, conditional, and unspecified needs in countries’ NDCs, by region (%)<\/strong><\/em><\/p>\n\n\n

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