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Global climate finance crossed the $2 trillion mark for the first time in 2024, reaching a record $2.008 trillion, according to the latest Global Landscape of Climate Finance 2026 report by the Climate Policy Initiative (CPI). However, annual growth slowed sharply to 6 per cent from 16 per cent in 2023 and 22 per cent in 2022, raising concerns over whether the world can mobilise capital fast enough to meet climate goals
The report notes that climate finance has continued to grow despite the COVID-19 pandemic, energy market volatility, sovereign debt pressures and geopolitical conflicts, signalling a maturing market for climate investments. Yet, current flows remain far below what is needed. CPI estimates that annual climate investment must reach at least $6.2 trillion by 2035, while average mitigation finance requirements stand at $7.8 trillion annually between 2025 and 2030 and $9 trillion annually between 2031 and 2035.
Domestic markets drive growth
Domestic markets emerged as the primary engine of climate finance growth. More than $1.7 trillion, or 85 per cent of climate investment, was channelled through domestic markets in 2024, with households alone investing $332 billion in electric vehicles, efficient appliances, heat pumps and small-scale renewable energy systems
Private finance exceeded $1.2 trillion in 2024 and accounted for 62 per cent of total climate finance, compared to a near-even split between public and private finance in 2019 and 2020. Commercial financial institutions became the largest single
The report attributes this growth to strong policy support, falling clean energy costs and increasing corporate investment. Commercial financial institution flows more than doubled between 2019 and 2024, supported by policy frameworks, transition planning and standardised investment structures such as power purchase agreements
Emerging economies gain momentum
While advanced economies and China still account for around 80 per cent of global climate finance, emerging markets and developing economies excluding China are growing faster than any other country group, recording a compound annual growth rate of 25 per cent since 2022. South-South climate finance flows also doubled since 2021, reaching $27 billion in 2024
South Asia and sub-Saharan Africa were the fastest-growing regions, each posting a 20 per cent compound annual growth rate since 2019. India accounted for more than 60 per cent of South Asia’s climate finance in 2024 and recorded a 24 per cent growth rate since 2019
The report identifies South Asia, sub-Saharan Africa and Latin America as major future investment destinations, particularly for grid expansion, utility-scale and distributed solar projects and clean transport
Energy dominates climate spending
Mitigation finance reached $1.9 trillion in 2024, accounting for nearly all tracked climate finance. Energy systems attracted the largest share at $954 billion, followed by transport at $497 billion and buildings and infrastructure at $364 billion. Together, these three sectors accounted for 95 per cent of mitigation finance
Clean energy investment grew 17 per cent in 2024 and now represents roughly half of all mitigation finance. Solar photovoltaic projects alone attracted $567 billion, increasing 24 per cent year on year. The report highlights that clean energy investment is now estimated to be roughly twice the level of fossil fuel investment
Falling technology costs have reinforced this trend. Between 2010 and 2024, the levelised cost of electricity declined by about 90 per cent for solar photovoltaic systems, 70 per cent for onshore wind, 62 per cent for offshore wind and 93 per cent for battery storage
Adaptation finance remains weak
Adaptation finance remains a major concern. Investment reached only $64 billion in 2024, a fraction of overall climate finance. CPI described adaptation finance growth as “uneven and weak”, noting that flows dropped in 2023 and remained flat in 2024. Since 2019, adaptation finance has grown at a compound annual rate of just 6 per cent
The report warns that the past eleven years, from 2015 to 2025, were the warmest on record and climate impacts have already reduced per capita gross domestic product in low and lower-middle income countries by between 4 and 12 per cent. Yet adaptation finance remains heavily concentrated, with 82 per cent flowing to water, wastewater and cross-sectoral resilience projects
Key challenges
According to CPI, climate finance growth is slowing at a time when acceleration is essential. Preliminary estimates suggest climate finance rose to about $2.06 trillion in 2025, but annual growth likely slowed further to just 2.5 per cent. At current rates, the world would not meet even the lowest estimated climate investment requirements until well into the 2030s
The report also highlights a decline in international public climate finance. After rising by 33 per cent in 2022 and 20 per cent in 2023, international public climate finance fell by 6 per cent in 2024 as donor countries faced fiscal pressures, competing spending priorities and higher interest rates. Least developed countries experienced a 24 per cent decline in international public climate flows in 2024
Solutions proposed
CPI outlines four priorities to accelerate climate investment
Align climate finance with development outcomes
The report calls for climate investment to strengthen energy, food and economic security while avoiding long-term fossil fuel lock-in. It recommends ensuring that climate investments also support livelihoods and economic resilience
Strengthen country-led investment frameworks
Countries should build domestic financial systems, investment pipelines and implementation capacity, while aligning international support with national priorities and fiscal realities
CPI recommends integrating climate risk into fiscal planning, improving adaptation finance tracking, expanding domestic adaptation investment and applying stronger quality standards to adaptation projects
Mobilise more private capital
The report urges greater use of blended finance, guarantees and catalytic equity to attract private investment, particularly in emerging markets and developing economies. It notes that every dollar of catalytic equity can mobilise about $9 in project equity and roughly $30 in total project capital expenditure over a project’s lifecycle
The report also calls for public finance to shift away from mature sectors such as renewable power and electric vehicles and focus instead on underfunded sectors, including industry, agriculture, forestry and other land use, and waste management, where investment gaps are far larger and private capital remains limited
