As COP29 comes to an end, I find myself reflecting on the promises made at the summit, and the realities that lie ahead. While the $300 billion-a-year annual climate finance agreement may appear significant, it is a drop in the ocean compared to the trillions needed to address the issue of adaptation over the next decade.
Speaking on behalf of the Global South, India’s negotiator Chandni Raina called the climate aid deal, which was adopted despite objections from several nations, an ‘optical illusion’ incapable of enabling necessary climate action. She spoke aptly and truly; the commitments by wealthier nations still remain far too small to address the scale of the challenges faced by developing countries.
For instance – smallholder farmers, who constitute a substantial segment of the global agricultural workforce and form the backbone of our food systems, continue to grapple with the devastating and heightening impacts of climate change. Factors like erratic weather, soil degradation and water scarcity are not just obstacles; they are existential threats to livelihoods and, ultimately, to global food security. Similarly, small and medium enterprises (SMEs), which drive local economies, face increasing pressure to decarbonise and adopt energy-efficient systems. Yet, these groups remain largely excluded from the global climate finance frameworks.
If you speak in terms of numbers on a piece of paper, in the last fiscal year, the World Bank Group claimed that it delivered $38.6 billion in climate finance – a total of 41% of their total financing. But speaking in real terms, people working on the ground continue to wonder whether any of those funds were designed to reach the most vulnerable. The promise of blended finance – where public and philanthropic capital is leveraged to de-risk private investments – also often subsidises commercial interests rather than addressing grassroots needs.
The bottom line is that for climate finance to be truly effective, we need to embrace action that genuinely prioritises inclusivity. Philanthropy must step up to fund adaptation directly at the implementation level rather than channelling it through venture capital or corporate subsidies. Policymakers and financial institutions must design frameworks that bring smallholder farmers and SMEs into the fold of climate finance, enabling them to build resilience and manage the risks posed by a changing climate.
As we look beyond COP29, the focus must shift from promises to action and from exclusion to inclusion. Climate finance cannot merely be about lofty commitments; it must become a tool for justice, equality, and, most importantly – survival for those who bear the greatest burden of climate change.
-Manoj Kumar, Founder, Social Alpha