Call for just transition becomes COP30 rallying cry, as doubts remain over MDBs’ growing climate finance role
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Article summary
- MDBs re-affirm commitment to provide $120 billion in climate finance to LMICs by 2030, amid continued civil society scepticism.
- Global South unions call for ‘clean break’ with World Bank’s ‘billions to trillions’ approach in the energy sector.
- Differing trajectories of Bank-hosted Tropical Forest Forever Facility and Fund for Responding to Loss and Damage illustrate extent of climate finance provision gap.
Amid warnings from the UNEP 2025 Emissions Gap Report that the world is heading for 2.3-2.5°C of warming above pre-industrial levels by mid-century, countries laboured to agree a new ‘global mutirão’ decision text at the UN Framework Convention on Climate Change’s (UNFCCC) 30th Conference of Parties (COP30), held in Belém, Brazil, from 10-22 November.
With dwindling public finance commitments from traditional donors amid overall cutbacks in aid financing and the US skipping COP30 altogether, multilateral development bank (MDB)-led efforts to mobilise private finance remained a de facto pillar of the mutirão. Strong disagreement on the inclusion of ‘roadmaps’ to transition away from fossil fuels and end deforestation could not be overcome, as both were omitted from the final agreement.
The Baku to Belém Roadmap to 1.3T, co-produced by COP30 president Brazil and COP29 president Azerbaijan, and published on 5 November, focused on efforts to mobilise $1.3 trillion annually for low- and middle-income countries’ climate action by 2035, with at least $300 billion coming from public sources. Despite identifying a range of potential instruments, including a “manyfold” increase in grant finance and a new issuance of IMF Special Drawing Rights by 2027 (see Observer Summer 2024), an over-arching thrust of the Roadmap focused on mobilising private finance, including through MDBs’ use of junior equity, guarantees, local currency lending, foreign exchange hedging tools, and securitisation platforms (see Observer Winter 2025).
Although the presence of MDBs in Belém was somewhat muted in comparison to COP29 – following limited discussion of climate change at the World Bank’s Annual Meetings in October (see Dispatch Annuals 2025) – the MDBs released a joint statement on 11 November re-affirming past commitments to work more closely on climate, including through leveraging private finance. The statement noted that, according to their own reporting, in 2024 MDBs provided $85 billion in climate finance to low- and middle-income countries (LMICs) and mobilised a further $33 billion in private capital, “putting MDBs on pace to reach $120 billion from MDBs’ own account and $65 billion in private capital mobilization [to LMICs] by 2030.” Amid a wider COP30 agreement to triple adaptation finance by 2035, the MDBs also noted that they had provided $26 billion in adaptation finance to LMICs in 2024, indicating they are likely to be a key source of the new adaptation finance goal.
However, civil society has repeatedly scrutinised the MDBs’ approach to counting its climate finance and, in its reaction to COP30, the Big Shift Global coalition argued that, “Global North countries can’t hide behind MDBs to evade their responsibility to pay their fair share on fair terms for climate action” (see Dispatch Annuals 2025; Observer Winter 2024).
As COP30 turns focus to achieving just transition, unions reject World Bank’s private finance-led approach
Among the major achievements of COP30 was the creation an UNFCCC-based Just Transition Work Programme – commonly known as the Belém Action Mechanism (BAM) – to provide a centralised hub to support just transitions around the world. Climate Action Network International hailed the establishment of the BAM, saying, “The Just Transition mechanism stands as the major achievement of COP30 and for workers and communities across the world.” On 21 November, 24 countries, led by Colombia and the Netherlands, announced the first-ever international conference on a just transition away from fossil fuels, to take place in Colombia on 28-29 April 2026, which will address, inter alia, the “fiscal, social, and macroeconomic challenges of the transition” (see Observer Autumn 2021).
In parallel, the World Bank co-launched yet another ‘roadmap’ with the UK-based Green Finance Institute on 14 November, entitled High Quality Energy Investment Planning Roadmap: Attracting Private Finance at Scale, which is envisaged as a ‘green-print’ to help developing countries undertake de-risking of clean energy projects to attract private investors (see Briefing, Gambling with the planet’s future?). However, this approach was rejected in a statement at COP30 from over 100 trade unions from the Global South, representing tens of millions of workers – the would-be beneficiaries of the Bank’s new ‘jobs agenda’ (see Dispatch Annuals 2025).
Trade unions called for a ‘public pathways’ approach to the energy transition, arguing, “There needs to be a clean break with the policy of ‘blended finance’ and ‘de-risking’. The World Bank’s ‘billions to trillions’ idea that public money would ‘catalyse’ large amounts of private sector finance has been an unqualified failure, and must be clearly rejected.”
A tale of two World Bank-hosted funds: TFFF and Fund for Responding to Loss and Damage
Brazil launched the new Tropical Forest Forever Facility (TFFF) at the COP30 leaders’ summit on 6 November. The TFFF, for which the World Bank will serve as an interim host and trustee, is the latest financing mechanism that attempts to utilise financial markets to benefit climate efforts – a paradigm that has a decidedly underwhelming track record (see Observer Autumn 2024). It seeks to mobilise $25 billion in funds from ‘sponsor’ governments and philanthropies, and another $100 billion from private investors, to create a sovereign wealth fund for forests that will seek to repay investors and generate financing for countries who preserve forest cover. However the TFFF launched with $5.59 billion in pledges – far below the level needed to generate adequate funds for forest preservation in 74 potentially eligible countries. The fund also fails to address a core paradox of efforts to ‘crowd in’ private finance: as noted by Rainforest Action Alliance, “Without strong regulation to stop the flow of finance to destructive industries, the TFFF risks becoming yet another well-meaning mechanism trapped in a broken system,” pointing to estimates that commercial banks have provided $429 billion to companies driving deforestation, land grabbing and human rights abuses since 2015.
Meanwhile, the Bank-hosted Fund for Responding to Loss and Damage (FRLD), first agreed at COP26, launched a call for funding requests on 10 November for its Barbados Implementation Modalities (see Observer Winter 2023). Brandon Wu of ActionAid USA noted the $250 million thus far available to entities via the FRLD is a “drop in the bucket compared to the trillions needed.” The civil society-led Loss and Damage Collaboration called for a stepwise increase to address growing economic and non-economic loss and damage from climate change in developing countries, asking for parties to fill “the Fund with at least 400 billion USD a year by 2030” – a figure that illustrates the yawning gap between financing needs and Northern countries’ current political will.
