Financing for Developing Countries

The report identifies a significant gap between current public funding for climate change and the estimated annual needs of developing countries, which range from US$100 billion to US$200 billion for mitigation and tens of billions for adaptation. It details several proposed funding sources, including Mexico's 'green fund', a global carbon levy proposed by Switzerland, and Norway's proposal to auction assigned amount units (AAUs). The document also analyzes the tension between developed and developing nations regarding the governance of these funds, with developing countries favoring a new institutional framework under the UNFCCC to ensure direct access and equity, while developed countries prefer utilizing existing institutions like the World Bank and Global Environment Facility (GEF).

• Annual mitigation costs for developing countries are estimated to be between US$100 billion and US$200 billion, while global costs by 20202030 are projected at US$200 billion to US$400 billion.
• Adaptation funding needs are estimated at least in the tens of billions of dollars, with specific projections including US$28 billion to US$67 billion for developing countries by 2030 according to the UNFCCC, and US$86 billion per year by 2015 according to the UNDP.
• Current public funding for climate change is estimated at US$22 billion to US$32 billion, which is far below the estimated needs. Private finance for sustainable energy grew from US$33 billion in 2004 to US$155 billion in 2008, though it is concentrated in a few nations.
• Several innovative funding proposals are under consideration: Mexico's 'green fund' aiming for US$10 billion annually; Switzerland's global carbon levy of US$2 per tonne of CO2; and Norway's proposal to auction 2% of assigned amount units (AAUs) to raise US$5 billion to US$6.5 billion per year.
• Developing countries generally advocate for a new institutional framework under the UNFCCC to avoid the perceived donor-dominated governance of the World Bank and GEF, seeking a system similar to the Adaptation Fund that allows direct access to resources.
• The European Commission has proposed international public finance in the range of 22 billion to 50 billion per year starting in 2020, with the EU contributing between 10% and 30% of the global total.

APA

Murphy, D., Drexhage, J., Tirpak, D., & Gass, P. (2009). Financing for Developing Countries. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/financing_developing_countries.pdf

Chicago

Murphy, Deborah, John Drexhage, Dennis Tirpak, and Philip Gass. Financing for Developing Countries. International Institute for Sustainable Development, 2009. https://www.iisd.org/system/files/publications/financing_developing_countries.pdf.

Wikipedia

{{cite report |last1=Murphy |first1=Deborah |last2=Drexhage |first2=John |last3=Tirpak |first3=Dennis |last4=Gass |first4=Philip |title=Financing for Developing Countries |publisher=International Institute for Sustainable Development |date=September 2009 |url=https://www.iisd.org/system/files/publications/financing_developing_countries.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{murphy2009financing, author = {Murphy, Deborah and Drexhage, John and Tirpak, Dennis and Gass, Philip}, title = {{Financing for Developing Countries}}, institution = {International Institute for Sustainable Development}, year = {2009}, month = sep, url = {https://www.iisd.org/system/files/publications/financing_developing_countries.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }