Global climate finance reached a record high of $1.9 trillion in 2023, marking a 15% increase from the previous year, according to the latest Global Landscape of Climate Finance 2025 report by the Climate Policy Initiative (CPI). While this surge signals growing urgency around climate action, the report warns that major gaps and systemic risks continue to threaten progress.
Between 2018 and 2023, climate finance grew at an annual rate of 19%, with a sharper increase of 26% seen from 2021 to 2023. However, even at this pace, global investment is still far below the $6.3 trillion needed annually from 2024 to 2030 to limit the most severe impacts of climate change.
The majority of climate finance in 2023 about 94% or $1.78 trillion was directed towards mitigation efforts. Energy systems and low-emission transport dominated the spending, with solar, wind and electric vehicles attracting the largest share. The energy sector alone received $831 billion, maintaining its position as the top-funded area.
Meanwhile, adaptation efforts continued to fall behind. Only $65 billion was tracked for adaptation in 2023, despite growing climate threats in vulnerable regions. Most of this was directed at water systems, agriculture and disaster risk management. The funding falls significantly short of the $222 billion needed annually by 2030 in emerging markets and developing economies.
Finance aimed at both mitigation and adaptation referred to as dual-benefit finance reached $58 billion in 2023, tripling since 2018. These investments were mostly directed towards land use, water infrastructure, and cross-sectoral climate strategies.
Private finance hit a milestone last year by crossing the $1 trillion threshold for the first time, driven by household investments in electric vehicles, rooftop solar and energy-saving technologies. However, public climate finance declined by 8%, affected by budget pressures in major economies like the United States and Germany.
The report also highlighted a concerning concentration of climate finance. Nearly 80% of all funding went to just three regions: East Asia and the Pacific, Western Europe and North America. These regions also relied heavily on domestic sources, while sub-Saharan Africa and other developing areas depended largely on international public finance.
In 2023, international public finance to developing countries reached $196 billion. However, concessional finance including grants accounted for only 7% of global flows. This remains a critical source for least developed countries, which rely on it to reduce the risks for private and local investors.
To address the disparities, the report outlines key steps for scaling up climate finance in developing regions. These include building pipelines of investable green projects, using concessional funding to attract private capital, strengthening carbon pricing and markets, and deploying blended finance instruments.
As the world prepares for the COP30 climate summit in Belém, Brazil, the report urges a shift in strategy. Stronger coordination, smarter financial tools and long-term planning will be crucial to closing the climate finance gap and ensuring a more resilient, low-carbon future.