Optimising Climate Finance: Principles for Improving the Next Phase of Climate Finance Commitments

Developing countries’ climate finance needs are clear and growing, but expiring pledges, aid cuts and a stressed multilateral system have lowered confidence in delivery. Contributors must urgently step up with new multi-year commitments, especially for adaptation. A threetier framework offers a path forward: a transparent ‘grant-equivalent' or ‘budgetary’ core, a stretching public finance target comprising a wider set of instruments and channels, and an accompanying strategy setting out actions to unlock investment across the financial system. Such pledges can restore trust, respond to growing needs and put the global $300 billion and $1.3 trillion goals within reach.