As the climate change summit COP30 unfolds in Belém, Brazil, it is clear that climate finance stands at a crossroads. Rising global temperatures, widening inequality and unsustainable debt burdens in developing countries have converged into a single reality: the question is no longer whether massive resource mobilisation is needed, but how, for whom, and toward what ends.
From a Global South perspective, three reflections are essential: the need to link climate finance to development, the importance of confronting debt and fiscal myths, and the opportunity to rethink the economic model itself.
First, climate finance must be tied to a clear development strategy. Too often in climate discussions and even negotiations, development is treated as secondary – or even as something undesirable. This view is neither realistic nor fair, particularly for developing countries where poverty reduction, job creation, and social stability remain urgent priorities.
Ignoring development needs in the name of climate purity has not produced positive results; it has instead deepened inequalities and limited political support for ambitious climate action. A sustainable transition must therefore integrate economic development at its core, rather than treating them as unavoidable trade-offs.
This is why climate finance flows are most effective when they support national priorities for diversification, job creation, and social inclusion, rather than being treated as stand-alone environmental projects.
Underdevelopment is not a stage but a structural condition
Climate investments should help countries build domestic industries, expand access to clean energy and water, and strengthen resilience in vulnerable communities. When climate finance is embedded in coherent development planning, it becomes a lever for structural transformation rather than a patchwork of short-term mitigation measures.
The assumption that developing countries are merely at earlier stages of a universal path to prosperity is misleading. As structuralist thinkers like Brazilian Celso Furtado emphasized, underdevelopment is not a stage but a structural condition – sustained by global power asymmetries, colonial legacies and unequal trade relations. Today, those asymmetries are being reproduced in ‘green modernisation’.
Many Global South economies receive climate finance for projects reliant on imported technologies and intellectual property, reinforcing old hierarchies through new supply chains. This dynamic is especially visible in the race for transition minerals: while developing countries supply the raw materials essential for decarbonization, value creation remains concentrated elsewhere.
True convergence is possible between protecting ecosystems and pursuing industrial transformation, but only if environmental protection, inclusive urban and industrial policies and social justice are treated as interdependent.
In addition, the transition will succeed only if it includes workers, farmers, and marginalized populations, linking ecological restoration with dignified employment and local value creation.
Public finance is never neutral; it reflects decisions about who pays, who benefits, and whose future is prioritised
The challenge at hand is historically unique. Industrialized nations grew by exploiting nature and natural resources; developing countries are now asked to decarbonize while still struggling to provide infrastructure, health, and education, usually without the climate finance or green technologies needed to do so. Bridging this gap demands a development-centered vision of climate action, one that redefines climate finance as a tool for structural change, not just emission accounting.
Second, many key constraints on climate finance are not purely economic – they are deeply political. Public finance is never neutral; it reflects decisions about who pays, who benefits, and whose future is prioritized. Yet, while policymakers often claim that “there is no fiscal space,” vast sums continue to flow toward fossil-fuel subsidies, debt service and military spending. Regressive tax systems further allow wealth to accumulate at the top while limiting governments’ ability to fund public goods. The issue is not scarcity but allocation: unequal distribution and inefficient use of resources.
Climate finance must therefore be reframed as a question of political will. Why not tax the ultra-rich to fund green infrastructure? Why not prioritise climate investment over debt repayments? Fiscal constraints are often politically constructed, designed to protect existing elites and preserve the illusion that austerity is inevitable. This is especially true in countries where decades of fiscal orthodoxy have undermined development and constrained the state’s ability to invest in a just transition.
In many developing countries, the greatest barrier to climate action is external debt. Nations are borrowing to confront a crisis they did not cause, while spending more on debt service than on climate resilience or health. Climate justice must therefore include debt justice: restructuring unsustainable debts, reforming multilateral lending frameworks, and ensuring that new finance flows do not reproduce dependency through high-cost private instruments. Without these changes, climate finance will continue to operate within an inequitable global architecture that drains rather than empowers the South.
Betting that private capital will solve the climate crisis is a dangerous mirage
Third, the climate crisis is not only an environmental or fiscal challenge – it is an invitation to reimagine the economy itself. Neoliberalism, with its faith in deregulated markets and privatisation, has proven incompatible with planetary limits. Market-based tools such as carbon trading or blended finance may have a role, but they will not, on their own, deliver a just or sustainable transition. Betting that private capital will solve the climate crisis is a dangerous mirage. Public investment and leadership must set the direction, while private finance plays a complementary – not dominant – role.
A new paradigm must redefine what we mean by prosperity, value, and growth. The economy must be understood as a system for sustaining life, not merely generating profit. Reclaiming the role of the state – as investor, planner, and guarantor of equity – is not a step backward but a prerequisite for a livable future.
This transformation also requires reforming the global rules that shape climate finance. The international financial and trade systems currently constrain the policy space of low- and middle-income countries, penalise green industrial policy, and perpetuate debt cycles that suffocate investment in transformation. Reforming these architectures – including trade and intellectual property rules that limit technology transfer and local content – is essential to align climate goals with development priorities.
Today, climate denialism often takes the form of economic denialism: the refusal to accept that real climate action requires rethinking production, consumption, and distribution at their core. The transition ahead calls for bold imagination: new institutions, renewed cooperation, and a redefined social contract linking people, planet and well-being.
The road to COP30 has already brought a symbolic shift. By framing the summit as a global mutirão – a collective effort rooted in solidarity and cooperation rather than competition and profit – Brazil is signaling a new approach to global problem-solving. This spirit should guide not only climate negotiations but also the rethinking of global economic governance itself.
Ultimately, climate finance must be about more than counting dollars or tons of carbon. From the vantage point of the Global South, it must become a lever for structural transformation: a means to build a development model that is sovereign, inclusive, and ecologically grounded. Anything less will merely reproduce old hierarchies under a green veneer – and squander the historic opportunity to build a just and sustainable world.
Adriana Abdenur is co-president of the Global Fund for a New Economy (GFNE), which aims to foster innovative economic thinking and initiatives around the world. Between 2023 and 2025, she was special advisor in international affairs in the office of the Brazilian president Luiz Inácio Lula da Silva. In 2025, she was appointed by president Cyril Ramaphosa of South Africa to the G20 Extraordinary Committee on Global Inequality. A Brazilian policymaker and scholar, she co-founded the think tank Plataforma CIPÓ.
Pedro Rossi is the vice president and chief economist of the Global Fund for a New Economy (GFNE), associate professor of Economics at the University of Campinas (UNICAMP) in Brazil and founder of Transforma, a Brazilian think tank focused on green development and economic policy.
