Financing for Developing Countries

This September 2009 report by the International Institute for Sustainable Development (IISD) examines the financing requirements for climate change mitigation and adaptation in developing countries. It analyzes the gap between current funding levels and estimated needs, evaluates various proposed funding mechanisms—including national and international levies—and discusses the governance challenges of managing these funds within the UNFCCC framework ahead of the COP 15 negotiations in Copenhagen.

• There is a significant gap between current public funding and the estimated financial needs for developing countries. Annual mitigation costs for developing countries are estimated between US$100 billion and US$200 billion by 2020–2030, while current public funding is estimated at only US$22 billion to US$32 billion.
• Adaptation costs vary by source but are consistently estimated in the tens of billions of dollars. Specific estimates for developing countries include US$28 billion to US$67 billion by 2030 according to the UNFCCC, and US$86 billion per year by 2015 according to the UNDP.
• Several nations have proposed specific innovative funding mechanisms: Mexico proposed a 'green fund' generating at least US$10 billion annually; Switzerland proposed a global carbon levy of US$2 per tonne of CO2 to raise US$48.5 billion per year; and Norway proposed auctioning 2% of assigned amount units (AAUs) to generate US$5 billion to US$6.5 billion annually for adaptation.
• The Group of 77 and China have proposed that developed countries contribute 0.5% of their GDP for climate change, which would amount to nearly US$170 billion per year.
• There is a fundamental disagreement regarding the governance of climate funds. Developing countries generally favor a new institutional framework under the UNFCCC to ensure direct access and avoid the perceived donor-dominated influence of existing institutions like the World Bank and the Global Environment Facility (GEF), while developed countries prefer utilizing these existing institutions.
• The European Commission proposed a blueprint for Copenhagen where international public finance from industrialized and advanced developing countries would range from €22 billion to €50 billion per year by 2020, with the EU contributing between 10% and 30% of the global total.

APA

International Institute for Sustainable Development (n.d.). Financing for Developing Countries. https://www.iisd.org/system/files/publications/financing_developing_countries.pdf

Chicago

International Institute for Sustainable Development. Financing for Developing Countries. n.d. https://www.iisd.org/system/files/publications/financing_developing_countries.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title= Financing for Developing Countries |url=https://www.iisd.org/system/files/publications/financing_developing_countries.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopmentndfinancing, author = {{International Institute for Sustainable Development}}, title = {{ Financing for Developing Countries}}, institution = {International Institute for Sustainable Development}, url = {https://www.iisd.org/system/files/publications/financing_developing_countries.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }