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In the decade since the Paris Agreement, the world has become remarkably fluent in the language of climate ambition. Governments announce Net Zero years, submit updated targets, speak of just transitions and celebrate every addition of renewable capacity. Yet, the harder question remains stubbornly unresolved: Who pays for this transition, on what terms and with what certainty?
That question has become sharper after the World Bank Group decided to retire its fixed climate co-benefits target under its Climate Change Action Plan. The Bank has not announced an end to climate lending and it would be inaccurate to describe the move as a simple “cut” in climate funding.
Its official position is that it will extend the Climate Change Action Plan, shift from “inputs to outcomes”, retire the 45 per cent climate co-benefits target and the 35 per cent target, while continuing to track greenhouse gas emissions and beneficiaries with enhanced climate resilience.
There is a reasonable argument buried in that shift. Climate finance accounting can become mechanical. A project may be labelled climate-relevant without necessarily delivering strong mitigation or adaptation outcomes. Counting money is not the same as measuring impact.
But for developing countries, the concern is not that outcomes are being measured. The concern is that outcome measurement cannot substitute for predictable finance. Targets are not perfect, but they signal institutional priority. They tell borrowing countries that climate will remain central to project design, concessional windows, technical assistance and long-term planning.
Removing a quantified commitment at a time of rising climate stress risks weakening trust in a system where trust is already scarce. The World Resources Institute has argued that the elimination of the 45 per cent goal came after pressure from a small group of shareholders, despite resistance from a large bloc of developing nations and other shareholders.
This matters because the Paris Agreement is built around a cycle of escalating ambition. Countries are expected to submit and strengthen their Nationally Determined Contributions over time.
But the gap between promise and pathway remains wide. UNEP’s Emissions Gap Report 2025 found that annual emissions must fall by 35 per cent and 55 per cent from 2019 levels by 2035 to align with 2°C and 1.5°C pathways, respectively. The world is not on that track.
The failure is uneven. Developed countries carry the weight of historical responsibility and far greater fiscal capacity, yet their political follow-through on finance and fossil fuel phase-down remains inconsistent. Large emerging economies are expanding clean energy while still managing development, jobs, energy security, and affordability. Low-income and climate-vulnerable countries have contributed the least to the crisis, but face the highest exposure and the greatest dependence on concessional adaptation finance.
This is why climate finance cannot be treated as charity. It is part of the Paris bargain. The Agreement itself reaffirms that developed countries must support developing countries in building clean and climate-resilient futures, including through finance, technology and capacity-building. It also asks developed countries to provide forward-looking information on public finance. Predictability is not a bureaucratic luxury; it is part of the architecture.
India shows why this matters. It is neither a story of climate failure nor one of easy success. The country has made real progress in non-fossil power capacity and has already reached the 50 per cent non-fossil installed capacity milestone ahead of its 2030 target.
But capacity is not the same as generation. Climate Action Tracker noted that while India has crossed the non-fossil capacity threshold, the share of non-fossil sources in electricity generation has remained around 25 per cent, while coal continues to dominate actual power generation.
This distinction is crucial. A solar park on paper does not by itself cool a city at 3 pm, power a factory at night or meet peak demand during a heatwave. The International Energy Agency expects India’s electricity demand to grow strongly through 2030, with coal remaining the main source of electricity supply even as solar expands rapidly.
India’s climate transition, therefore, is not only about adding renewable megawatts. It is about transmission, storage, grid flexibility, affordable capital, reliable public transport, resilient agriculture, urban cooling, flood-proof infrastructure and the ability of cities to protect people who work outdoors or live in poorly serviced neighbourhoods.
In India, climate finance is not an abstract phrase from COP negotiations. It can decide whether a bus depot is electrified, whether informal workers have shaded public spaces during heatwaves, whether small farmers can shift cropping practices, whether a city can build drainage before the next flood, and whether clean energy remains affordable for households that are already stretched.
This is where the performance of Paris signatories must be judged more honestly. It is not enough to ask whether countries have submitted targets. The question is whether the international system is making those targets implementable. If developing countries are pushed to raise ambition while concessional finance remains uncertain, climate action begins to look like an unfunded mandate.
To be fair, global climate finance has grown. OECD data showed that developed countries provided and mobilised $132.8 billion in 2023 and $136.7 billion in 2024, exceeding the earlier $100 billion goal for the third consecutive year.
But the same OECD release noted that mitigation finance still formed nearly two-thirds of the total, adaptation finance accounted for only one quarter in 2023 and 2024, and support for low-income countries remained below its 2022 peak. That is the imbalance developing countries worry about. Finance may be rising in aggregate, yet the money may not reach the places and purposes where it is most needed.
Adaptation remains underfunded. Low-income countries remain vulnerable to volatility. Middle-income countries like India are often expected to borrow for transition while also carrying the costs of poverty reduction, urbanisation, energy demand and climate impacts.
A finance-light interpretation of Paris risks turning “common but differentiated responsibilities” into common responsibilities, differentiated burdens.
The answer is not to defend weak accounting. The World Bank is right that climate finance must be judged by outcomes, not only by labels. But the choice between outcome measurement and finance predictability is a false one. Developing countries need both credible outcomes and credible money.
A better path would retain quantified climate-finance signals while strengthening outcome metrics. It would expand concessional finance for adaptation, especially heat, water, agriculture, health, public transport and urban resilience. It would link finance more directly to NDC implementation rather than scattered project labelling. It would support technology transfer, transmission infrastructure, storage and grid upgrades. And it would create stronger channels for city-level climate finance, because climate impacts are rarely experienced at the scale of national statements. They are experienced on flooded streets, in overheated homes, at bus stops, farms, clinics, and worksites.
The Paris Agreement was built on a difficult political bargain: Every country would act, but not every country would be expected to carry the same burden alone. If climate finance becomes less predictable just as ambition is expected to rise, that bargain weakens. For countries like India, the question is no longer whether climate action is necessary. It is whether the world is willing to finance a transition that is just, developmental, and real. Paris will not be saved by pledges alone. It will be saved, or lost, in the architecture of finance.
Khushi Singh is a public policy and urban governance researcher. Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth.