Wealthy Nations Urged to Reduce Climate Debt Burden

Children in Bangladesh riding a boat through a flooded river to attend school. Bangladesh is one of the most climate-sensitive regions in the world.

In recent years, international climate financing has declined sharply, leaving billions in developing countries increasingly vulnerable to natural disasters and struggling to adapt effectively. With major cuts in foreign aid, these communities are expected to bear the brunt of the climate crisis, while wealthier nations continue to reap economic benefits.

A new report from Oxfam and CARE, Climate Finance Shadow Report 2025: Analyzing Progress on Climate Finance Under the Paris Agreement, highlights significant gaps in climate financing for the Global South and the consequences for climate resilience and global preparedness.

The findings come ahead of the 30th UN Climate Change Conference (COP30), scheduled in Belém, Brazil, from November 10–21, where world leaders and civil society groups will discuss strategies to strengthen global cooperation and accelerate climate action.

The report reveals that developing countries are paying disproportionately high repayments to wealthy nations in exchange for comparatively modest climate finance loans — spending about seven dollars for every five dollars received. This, combined with “the most severe foreign aid cuts since the 1960s,” has caused a nearly 9 percent drop in climate funding in 2024, projected to decline further by 9–17 percent in 2025.

“Rich countries are failing on climate finance and have no plan to meet their commitments. COP30 must deliver justice, not empty promises,” said John Norbo, Senior Climate Advisor at CARE Denmark.

Despite pledges of approximately USD 116 billion in 2022, only USD 28–35 billion was delivered, largely as loans, driving developing countries deeper into debt. Oxfam estimates climate-vulnerable nations are now indebted by roughly USD 3.3 trillion.

The report also warns that Least Developed Countries received just 19.5 percent of total public climate funding in 2021–2022, Small Island Developing States only 2.9 percent, and only 33 percent of funding supported climate adaptation.

UNICEF data shows climate-related disasters disrupted education for 35 million children in Bangladesh in 2024, while extreme events in Africa and Brazil displaced millions and caused hundreds of deaths.

Oxfam urges wealthy nations to honor climate finance pledges, increase grants over loans, and implement higher taxes on the wealthiest individuals and fossil fuel companies to generate funding for climate adaptation and loss management.