The Baku To Belem Roadmap To $1.3 Trillion: The New South Should Take The Lead

The roadmap does not address the critical question of how to make leaders resolve to act, given current geopolitics and institutional arrangements. As a result, the document looks more like a technical advocacy piece rather than a genuine roadmap. The word ‘roadmap’ is defined by the Merriam-Webster dictionary as “a detailed plan to guide progress toward a goal”. If a key element for the success of this plan (the resolve to act) is missing, is that plan still a roadmap? I hasten to add here that, despite this shortcoming, the document remains very useful and timely because it raises all the issues surrounding climate finance in a comprehensive way. It provides an excellent basis for future policy discussions and debates, even though it does not actually provide an action plan to guide progress towards the $1.3 trillion goal.

COP29 president Mukhtar Babayev, Azerbaijan’s Minister of Ecology and Natural Resources, wrote in a December 2025 article that the roadmap could be a template for an evolution of the COP process, and that “we need other ideas, more creativity and real-world actions to show that this template can work”. In this Policy Brief, I respond to Minister Babayev’s call. I explore how to avoid the roadmap becoming just another good technical report advocating for more climate financing with little or no real-world impact. I propose a specific reform of the IFA, and suggest ways to navigate the current complex geopolitical situation that could improve the chances of implementing the roadmap’s recommendations, thus reaching $1.3 trillion.

The roadmap is based on the work of the Independent High Level Expert Group on Climate Finance (IHLEG). The IHLEG’s fourth report provided the analytical underpinnings for the roadmap. It argued that “there is an entirely feasible path to mobilizing $1.3 trillion a year by 2035 from external sources of public and private finance”. There is no question that the path developed by the IHLEG and used for the roadmap is technically sound and feasible. The question is whether it is politically and institutionally feasible. Unfortunately, the answer is no.

Most observers agree that the roadmap would only be effective if supported by political and institutional reforms. For example, the United Nations Conference on Trade & Development (UNCTAD) makes the point that climate-finance delivery is not achieving its potential and that a reformed international financial architecture (IFA) is central to reaching climate finance goals. UNCTAD goes on to say that the roadmap should be a catalyst for such a systemic change, otherwise strategies to achieve the $1.3 trillion goal will repeat past failures. Several nongovernmental organizations (NGOs) and thinks tanks have also expressed concern that the roadmap could become just another nonbinding report with limited impact[2]. It has also been noted that nearly all the recommendations in the roadmap were made using loose voluntary language[3].

The main weakness of the roadmap, similarly to the four IHLEG reports, is that while it is a technically solid advocacy piece, it is not an action program. To be fair, the roadmap’s authors seem to acknowledge this weakness. They suggest that in the short term the COP presidencies convene “an independent expert group tasked with refining data and developing concrete financing pathways to get to 1.3T in 2035, building on the action fronts defined in this ‘Roadmap’, with a first report by October 2026”. While I agree with the need to convene another expert group, I doubt that further refinements of the data and the development of new pathways to $1.3 trillion will be useful. Instead, the independent expert group should consider IFA reforms that would support implementation of the program described in the roadmap, and would make $1.3 trillion possible in the current difficult geopolitical and institutional environment.

The proposals I present here are inspired by Malloch-Brown’s argument that the old aid system is falling apart, we will probably look back at 2025 as the year development cooperation collapsed, and that we may be on the cusp of a new age of what might be called “development sovereignty” (Malloch-Brown, 2025). I argue that sovereign countries of the New South should take the lead in reforming the international system of climate financing, working with supportive developed countries, while leaving the door open for others to join later, whenever they are ready. The reforms I recommend also envisage a much greater role in the IFA for nonstate actors, particularly civil society organizations, and private companies.

This policy brief is divided into four sections in addition to the introduction. Section 2 provides a critical review of the roadmap. Section 3 presents recommendations for developing countries to lead a reform of the IFA for climate, to ensure that the ideas in the roadmap are implemented, and section 4 concludes by proposing next steps.

2- Critical Review Of The Roadmap

The roadmap starts with IHLEG data that indicates that by 2035, developing countries (excluding China) will require $3.2 trillion in climate finance every year. This includes $2.05 trillion for green energy, $0.75 trillion for adaptation and damage and loss, $0.35 trillion to protect nature and sustainable agriculture, and $0.05 trillion for just transition. The IHLEG argues that out of the $3.2 trillion, $1.9 trillion could be financed by developing countries themselves, and $1.3 trillion will need to be financed from external sources.

This breakdown between domestic and external financing is not completely arbitrary. It reflects the IHLEG’s modeling of what is feasible in terms of domestic financing. It is based on assumptions that developing countries’ economies will grow sufficiently, that domestic resource mobilization will improve significantly, and that regulatory reforms will support expansion of domestic private investment.              

The $1.3 trillion/year of external financing is very ambitious. According to the IHLEG data, total external financing for climate action in developing countries, from all sources, was around $190 billion in 2022. That is, to achieve the $1.3 trillion, external financing would have to be multiplied by seven. Bilateral concessional financing for climate, which was $67 billion in 2022, will need to rise to $216-$325 billion. This would be quite an achievement at a time when the OECD is projecting a 9%-17% drop in net official development assistance (ODA) in 2025, following a 9% decline in 2024. Those OECD projections are based on the cuts announced by major donor countries, including the United States, the United Kingdom, Germany, and France. Meanwhile, external private financing for climate, which was $40 billion in 2022, will need to rise to $390-$850 billion. Again, this is quite a stretch when, as shown by Kharas and Rivard (2024), net private financing to developing countries has turned massively negative.        

Interestingly, the roadmap does not question the realism of the IHLEG’s financing figures, external or domestic, in view of the prevailing geopolitics and institutional structures. It does not discuss the institutional reforms and political actions needed at global level to make it possible to mobilize the required climate finance. Instead of discussing institutional reforms, or actions that are needed at the geopolitical level to achieve $1.3 trillion, the roadmap states that “the above numbers represent initial attempts to systematically estimate potential revenue sources supporting pathways to 1.3 T. These figures are preliminary and will require continuous refinement”. Given everything that is happening around the world and the impacts on climate financing, this focus on refining numbers seems a little strange. The roadmap ignores the fall in ODA and the withdrawal of private investors. It hardly mentions the rise of right-wing parties around the world and their rejection of climate policies. It does not mention that the president of the world’s largest economy said at the United Nations that “climate change is a hoax”, pulled his country out of the Paris Agreement, and did not send a delegation to COP30.

To be fair to the roadmap and its authors, they are at least aware of the magnitude of the technical challenge (even though they avoid dealing with the political and institutional challenges). They proposed five action fronts aimed at scaling up external climate finance to developing countries (the 5 Rs), with the goal of achieving $1.3 trillion. These action fronts are:

1. Replenishing—grants, concessional finance, and low-cost capital.
2. Rebalancing—fiscal space and debt sustainability.
3. Rechanneling—transformative private finance and affordable cost capital.
4. Revamping—capacity and coordination for scaled climate portfolios.
5. Reshaping—systems and structures for equitable capital flows.

This 5 Rs strategy includes three important positive changes to the current framework. First, the rebalancing action front includes calls for climate-resilient debt clauses, more debt for climate swaps, debt restructuring, and the creation of a borrowers’ forum. Second, the rechanneling action front focuses on mobilizing transformative private finance. It includes calls to increase catalytic equity, investment guarantees, and securitization platforms. Third, the revamping action front prioritizes capacity development and coordination for scaled climate portfolios. This includes the important work of project preparation, pipeline development, and enhancing domestic capacities to coordinate and lead country platforms. Those recommendations, if adopted, would certainly have a positive impact on the availability and use of financing for climate action.

The roadmap makes the important point that focusing solely on the volume of financing is not sufficient. It is important to also consider the quality of the projects being financed. That is why, in addition to the 5 Rs, it has developed five thematic priorities. These are:

1. Financing adaptation and loss and damage.
2. Financing clean energy access and transitions.
3. Financing nature and supporting its guardians.
4. Financing agriculture and food systems.
5. Financing just transitions.

The roadmap is right to highlight the importance of financing adaptation and loss and damage. According to the European Environment Agency (2025), global mean temperature between 2015 and 2024 was nearly 1.3 degrees Celsius warmer than the preindustrial level. The EEA added that without drastic cuts in greenhouse-gas emissions, the temperature rise will exceed 2°C by 2050, and will exceed 3°C by the end of the century.

Developing countries, which have contributed very little to greenhouse-gas emissions, will be greatly impacted by this temperature increase. They must prioritize adaptation[4]. Developing countries will suffer from drought and declining agricultural productivity, and hence greater food insecurity. Coastal cities will be impacted by rising sea levels, and extreme weather episodes will be more severe. In view of the failure of rich countries to reduce emissions fast enough, responsible developing countries must prioritize adaptation, and prepare to deal with loss and damage.

Prioritizing adaptation does not mean ignoring mitigation. Developing countries need to continue push rich countries to do more to fight climate change. At the same time, they should prioritize their own green investments, whenever possible and economically feasible.

The roadmap’s position on the replenishing action front appears to ignore political and institutional realities. As stated earlier, it is not realistic to expect developed countries to increase concessional financing for climate when they are cutting their aid budgets. Moreover, in view of the U.S. position on climate change, it is not realistic to expect a big increase in climate financing from Multilateral Development Banks (MDBs), in which the United States is a major shareholder. The World Bank-International Monetary Fund annual meetings in October 2025 provided an example. Climate was virtually absent from the official agenda in response to the U.S.’s call for the institutions to focus on their core mandates, which do not include climate action. The leaderships of the two institutions have become significantly less vocal about climate topics. This does not mean that the two institutions will stop financing climate action. However, it is highly unlikely that they will be able to expand their support for climate projects, or start new climate initiatives (such as the issuance of more Special Drawing Rights to finance climate action, as suggested by the roadmap), against the wishes of their major shareholder[5].

Similarly, the roadmap’s call for international cooperation on global taxation of high-emission sectors, of financial transactions, and of ultra-rich individuals, in order to finance climate action, is technically sound but politically unrealistic. It is hard to believe that the current U.S. administration would agree to any form of international taxation for climate. It is important to note that even in Europe, support for climate action is weakening as populist parties gain more support. These factors make the adoption of the roadmap’s proposals even harder[6].

The roadmap’s position on multilateral climate funds is weak. It states that climate funds “will need to continue to play a key role in channeling concessional finance to developing countries in line with country driven strategies and plans and backed up by strong replenishment cycles”. This makes it sound as if those funds are working very efficiently and have a significant impact on climate finance. Nothing could be further from the truth. There are close to 100 climate funds worldwide currently, with a cumulative contribution to climate finance that is marginal, about $1.6 billion in 2023.  They are uncoordinated, and it is very difficult to assess their real contribution. As argued by Le Houerou (2023), there is an urgent need to deal with this terrible fragmentation and to reduce the number of climate funds drastically. The remaining funds will have to be reformed to increase their transparency, efficiency, synergies, and impact. The roadmap should have at least questioned the need for so many uncoordinated climate funds.

3- What The New South Can Do

Given political developments in the North, and the lack of support for foreign aid and climate action, the creativity, and the development of real-world actions, as called for by the COP29 President, will have to come from countries of the New South. Moreover, it seems clear that the focus must be on the IFA for climate action.

Countries of the New South complain that the current IFA is broken[7], and is not delivering for them. It needs to change. The current IFA is not delivering for at least four reasons:

1. The system does not ensure a sufficient voice for developing countries[8]. In the large MDBs, the rich countries have a huge majority of votes, and in UN forums, decisions are usually taken by consensus, meaning the lowest common denominator is adopted, rather than the courageous decisions that countries of the New South need.
    
2. The system is overly dependent on public funding from developed countries. This makes it vulnerable to changes in those countries’ budgetary situations. Public money, especially in the form of concessional financing, is needed. However, it should be combined with much larger contributions from civil society and the private sector.
    
3. The overwhelming voice given to developed countries, together with the over dependence on public money, renders the system hostage to political developments in the rich countries. When a leader such as President Obama or President Biden is in the White house, financing flows for climate action, but when a leader such as President Trump is in the White House, financing dries up. Stop-and-start financing is not conducive to the long-term strategies and investments needed to combat climate change.
    
4. The system is fragmented, with many players with little coordination between them. The creation of country platforms would help improve coordination, but many countries (especially smaller, more vulnerable countries) lack the capacity to lead the coordination effort.

To correct current deficiencies in the IFA for climate action, countries of the New South should consider creating a new financial institution, through which their voice would be heard. To avoid further cluttering of the global institutional framework, it is important to start by calling for the closure of some existing institutions. The primary candidates for closure are found among the climate funds. The world does not need nearly one hundred climate funds. They could be easily consolidated into three or four. The idea is to close some ninety climate funds, while creating one large international green bank.

Why not reform the existing MDBs to provide more of a voice to the New South, rather than create a new institution? The answer is quite straightforward: because MDB governance reforms will never happen. This type of reform is a zero-sum game; a greater voice for some countries means less voice for others. Voice in the MDBs reflects countries’ relative economic weights in the mid-twentieth century. The world has changed since then. If voice in MDBs is adjusted to reflect today’s realities, Europe’s and Japan’s shares would decline, and the shares of the New South and of China would increase. Countries that would lose voice would block such a reform, in exactly the same way as reform of the UN’s Security Council has been blocked for decades. It is much easier to start a new institution based on today’s realities, than to reform existing ones.

The role of the international green bank I am recommending would be to implement the roadmap’s third R: “rechanneling transformative private finance and affordable cost capital”[9]. This new institution would be a bank, not a fund dependent on donor financing. It would raise financing from the market through green bonds and the sale of carbon offsets, and through private donations from individuals and businesses concerned with saving the planet. It would only finance economically viable private sector projects through equity participation, loans, and the provision of guarantees. It would not lend to governments, and hence would not further aggravate the sovereign debt problem. ‘Green Bank’ would be tasked with developing and using all of the innovative instruments for private financing listed in the roadmap. This would include the provision of catalytic equity, partial risk guarantees, foreign exchange risk management, securitization platforms, climate insurance, and carbon markets, and ensuring the availability of information and data transparency.

The availability of finance is not the only constraint on climate action in countries of the New South. The dearth of bankable green projects is another major constraint. Therefore, identifying green projects and developing a quality pipeline would be an important function of Green Bank. It would also be responsible for building capacity in recipient countries, and for supervising project implementation.

Green Bank would be a public-private partnership with sovereign countries, private sector companies, and civil society organizations as shareholders. This will make it more reflective of today’s realities and quite different from other MDBs, which are intergovernmental institutions with only sovereign states as shareholders. This intergovernmental structure is not adapted to the realities of the twenty-first century. The vast majority of climate projects will be financially viable and will need to be financed by the private sector. Hence, it makes sense that private companies participate in the capital and governance of Green Bank. Similarly, civil society organizations play an important role in informing the public about climate issues, and in raising funds from individuals who are concerned about climate change. The participation of such organizations in Green Bank, alongside governments and the private sector, would enhance the bank’s credibility.

The Green Bank voting system will be designed to enhance its legitimacy and ensure that all decisions reflect its diverse stakeholders. It will be different from UN organizations, in which decisions are taken by consensus, thus reflecting the lowest common denominator. It will also be different from current MDBs, in which donor countries have an outsized voice, and the private sector and civil society are not present. Green Bank shareholders would be divided into four groups: donor countries, recipient countries, private sector, and civil society. For any decision to be adopted, it would need to be supported by a majority of the shareholders in each group. That is, no decision can be adopted if a majority of donors, or recipients, or private actors, or civil society representatives are against it. This is different from the consensus of the UN system, because only a majority of each group would be needed. At the same time, unlike the Bretton Woods institutions, a few large donors cannot call all the shots without support from majorities in each of the other three groups.

Would the creation of Green Bank ensure achievement of the roadmap’s target of $390-$850 billion in foreign private financing per year, starting 2035? It will be difficult. After all, the entire World Bank Group provided less than $120 billion of financing in fiscal year 2025, of which only around $45 billion (FY 2024 data) was for climate. However, a well-designed Green Bank supported by a substantial group of countries, large private enterprises, and civil society organizations, would certainly make an important contribution to climate finance, especially if it focuses on financing much needed projects in green energy and sustainable agriculture. It is highly unlikely, if not outright impossible, for $1.3 trillion to be achieved without a major reform of the IFA, and the creation of Green Bank would be part of that reform. It is important here to underline that Green Bank would not replace climate financing from the World Bank or other MDBs; it would be in addition to what is being done already.

4- The Way Forward

A great deal has been achieved since the first COP took place in Berlin in 1995, but progress remains insufficient. In 1995, the world was moving towards a temperature increase of 6°C by 2100, now this figure has come down to about 3°C, which is still double the 1.5°C target of the Paris Agreement. Countries of the New South, and especially those in Africa, are the first victims of this temperature increase. They are dealing with more droughts affecting agriculture and food security, more flooding destroying housing and infrastructure, rising sea levels affecting coastal communities, and more intense cyclones and other severe weather events that lead to human and material losses.

Developed countries are responsible for nearly all the greenhouse gases in the atmosphere. The G20 countries (excluding the African Union) are alone responsible for 77% of all accumulated greenhouse gases in the atmosphere[10]. Therefore, developed countries have a moral responsibility to finance current climate action, including efforts to help the countries of the New South adapt to climate change and deal with losses related to severe weather. It is important that the New South continue to insist that the developed countries of the North contribute to climate action at a level commensurate with their contribution to the problem.

But countries of the New South cannot just wait for the North to take the lead. They have been waiting for thirty years now, and the results are below expectations and, especially, below what is needed to save the planet and our way of life. It is time for the New South to exercise leadership on climate matters. Since financing climate action is a key constraint, it would make sense for this leadership to be expressed in the area of financing, reform of the IFA, and the creation of the ‘Green Bank’.

Achieving an international consensus on the creation of the Green Bank is virtually impossible in the current geopolitical environment. Since I first argued for the creation of a Green Bank two years ago, I have had a chance to discuss the idea with many policymakers in the North. A few, who are sensitive to climate issues and believe that economic development in the South is in in the interest of both the North and the South, support the idea. But the vast majority of policymakers in the North are against the creation of a Green Bank.

Why are so many policymakers in the North against the creation of an international green bank? I could identify two different groups of policymakers with their own arguments against Green Bank. The first group is simply ideologically against the creation of another international organization. They point to the large number of uncoordinated institutions around the world, which are often created for a good reason but once the justification for their creation no longer applies, they continue to exist for no good reason. It is very hard, even impossible, to close down an international organization after its mandate is achieved. International bureaucracies are very good at expanding their mandates and coming up with reasons why they should continue to exist; they are also very good at getting support from a few influential countries which benefit from the continued existence of the organization. The second group is concerned about the cost of a new international organization. Donor countries are usually expected to support the running costs of such organizations, including the high salaries of its expatriate staff, in addition to supporting the projects. Both groups of policymakers conclude by asking why the world needs a Green Bank when the World Bank already exists.

Both groups have good points. International bureaucracies have a propensity to perpetuate themselves and to expand their mandates over time. I have already complained about the large number of uncoordinated climate funds. If 90% of those climate funds disappear tomorrow, the fight against climate change will be unaffected, but some money and effort will be saved. 

Why then do I still insist that the world needs a Green Bank? There are two reasons.  First and most important, the current system is clearly not delivering the needed climate financing. For thirty years the world has been organizing COPs and has been arguing for more climate finance. Over the last four years, the IHLEG has been issuing reports about the financing needs for climate. All these efforts have had some impact, but not enough. Marginal changes and reforms to the current system are clearly not sufficient; a big change is needed. That is what the Green Bank will bring about. Second, the current IFA for climate is completely dominated by the donor countries of the North.  Politics in those countries are not moving in the direction of supporting climate finance. Populist parties who are either outright climate deniers or skeptical about climate science are gaining power and influence in the North. They will not support greater climate financing. It is not realistic to expect the World Bank and other MDBs, in which those countries have controlling shares, to deliver the needed climate financing. A Green Bank representing a strong voice of the New South, private sector, and civil society would be less vulnerable to populist political pressure.

The countries of the New South should not wait for the North to decide how they want to rebuild development finance and reform the IFA for climate. If they decide to wait, they might end up waiting for another thirty years or even more. Politicians in the North have little incentive to change the current system. It is true that reforms that give more voice to the New South and more financing for climate action will benefit everybody in the long run. But in the short run it would imply concessions and costs for the North. It is hard to win elections when imposing short-run costs and promising long-run gains. It is natural that Northern politicians would avoid embarking on this type of reform.

Green Bank could be created by a ‘coalition of the willing’, a group of countries of the New South with some Northern countries that are especially concerned about climate change, along with private enterprises and civil society organizations from both the North and the South. Green Bank would have headquarters in one of the countries of the New South and would start operations immediately. However, it would keep the door open for other countries and institutions to join. As the new bank starts to produce results, others would be interested in joining. It would also be an opportunity to clean up the IFA for climate action and close down institutions that have outlived their usefulness, while building a strong system of cooperation and coordination around Green Bank.

The world is already feeling the impacts of global warming, and countries of the New South are bearing the full brunt. Political developments in the North, and increased geopolitical competition between great powers, do not augur well for future climate action. Business as usual is not working. Faced with this situation, and the existential threat posed by climate change, countries of the New South cannot remain passive. They must take matters in their own hands and start reforming the IFA for climate. Creating a Green Bank to serve the New South would be a step in the right direction.

[1] For an explanation of the various climate finance goals, see Alayza and Larsen (2025).

[2] For example see Heinrich Boll Stiftung (2025).

[3] See Carbon Brief (2025).

[4] See Ghanem (2025) for a discussion of Africa’s need for adaptation.

[5] For more on the U.S. pressure on the World Bank and IMF, and the institutions’ responses, see Green Central Banking (2025).

[6] The position of the Fratelli d’Italia of Prime Minister Meloni on climate can be found here; the position of the National Platform (Rassemblement National), which is now the most popular party in France, is here; and the position of Nigel Farage, the de-facto leader of the opposition in the UK, is here.

[7] See, for example, the November 2025  statement of Barbados as president of the V20.

[8] See Canuto et al (2024) for a discussion of the governance reforms needed to make the IFA more responsive to developing country needs.

[9] I first floated the idea of a Green Bank in a 2023 policy brief published by the Policy Center for the New South, and followed it with an article for the Finance for Development Lab, providing eight reasons to support a Green Bank.

[10] See UNEP (2024)