ALTÉRRA reflects a broader shift in the politics of climate finance

When ALTÉRRA was launched at COP28 in 2023, media headlines portrayed it as a major United Arab Emirates (UAE) effort to help bridge the global climate-finance gap, particularly by directing investment towards the Global South. Its emphasis on mobilising finance, directing resources towards emerging and developing economies, and making climate finance more available, accessible and affordable reflected several important principles embedded in the UN climate framework, even before these principles were subsequently articulated by the International Court of Justice (ICJ) in its 2025 Advisory Opinion. In particular, ALTÉRRA can be understood as aligning with the principles of international cooperation, equity and the progression of climate-finance efforts reflected in the Paris Agreement and later reinforced through the Court’s articulation of States’ broader duty to cooperate.

While the UAE is not historically comparable to the United States or Europe in terms of cumulative emissions, it has accumulated considerable wealth through the fossil fuel economy. Its decision to commit US$30 billion to ALTÉRRA can therefore be interpreted as assuming a greater role in financing the global transition, extending responsibility beyond traditional OECD donors.

The UAE does not bear the same historical emissions responsibility as the traditional industrialised economies. Nevertheless, its exceptional hydrocarbon wealth and historically high per capita emissions place it in a distinctive position. Through ALTÉRRA, the UAE is signalling that emerging financial powers can play a more prominent role in addressing the climate finance gap. This broadens the landscape of climate responsibility beyond the conventional North-South divide while complementing, not replacing the obligations of developed countries under the United Nations Framework Convention on Climate Change and the Paris Agreement.

From a climate-finance perspective, the UAE’s contribution to ALTÉRRA can be viewed as one way of operationalising equity and Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC) in international climate action. In its 2025 Advisory Opinion, the ICJ recognised CBDR-RC and respective capabilities as relevant to assessing the degree of care expected from different States, noting that States with greater economic, technological and institutional resources may be expected to exercise a higher degree of care. The Court also recognised financial assistance as an important means of international cooperation in protecting the climate system.

Against this framework, the UAE’s contribution to ALTÉRRA can be interpreted as an expression of its differentiated capacity to contribute to the global climate effort. By mobilising finance for developing and emerging economies, particularly those facing greater financing constraints, ALTÉRRA provides a practical example of how a State with greater financial capacity can share the collective burden of climate action beyond its own borders. This does not make climate finance a substitute for domestic mitigation, but it demonstrates how equity under CBDR-RC can operate across different dimensions of climate responsibility, including finance, cooperation and support for countries with greater climate-related needs. It may be viewed as a manifestation of equity, insofar as the UAE, as a State with significant financial capacity, contributes resources towards addressing climate change beyond its borders, particularly in developing and emerging economies that face greater financing constraints.

It can be further seen as supporting the principle of progression under the Paris Agreement, particularly in the area of climate finance. Article 9(3) calls for climate-finance mobilisation to build on and go beyond previous efforts. In this context, if it increases the scale or reach of the UAE’s climate-finance efforts, it can be interpreted as one way of putting the principle of progression into practice.

ALTÉRRA is a clear demonstration that the duty to cooperate is capable of being operationalised through innovative climate-finance architecture, but climate justice requires looking beyond the headline dollar commitment to where the money goes, on what terms, to whom, and whether it addresses the financing needs of those most vulnerable to climate change. ALTÉRRA is supporting projects in climate-vulnerable and emerging markets, particularly across Asia, Africa and Latin America, focusing on renewable energy, energy storage, resilient infrastructure and climate technologies. Its investments are helping countries strengthen their energy systems, reduce climate risks and attract much-needed private finance for the transition to a more resilient, low-carbon economy.

Ultimately, ALTÉRRA reflects a broader shift in the politics of climate finance. As the traditional Global North has struggled to close the long-standing climate-finance gap, new sources of capital and new actors are beginning to assume a greater role in supporting the global transition. The UAE’s contribution illustrates how emerging financial powers, including countries of the Global South, can increasingly move from being recipients of climate support to contributors to the collective climate effort.

Prachi Malik and Shivani Gupta work as consultants with the Asian Development Bank

Views expressed are the authors’ own and don’t necessarily reflect those of Down To Earth