Promises and reality of climate finance flows in Latin America and the Caribbean

This briefing by Zero Carbon Analytics examines the gap between climate finance pledges and the actual financial flows into Latin America and the Caribbean (LAC). It highlights that while developed nations eventually met a USD 100 billion annual pledge in 2022, the LAC region remains severely underfunded relative to its climate vulnerability and the investment required to meet its Nationally Determined Contributions (NDCs). The document emphasizes that most finance arrives as loans, exacerbating a regional debt crisis that hinders sustainable development.

• Developed nations met their pledge to mobilise USD 100 billion annually for developing countries only in 2022, two years after the 2020 deadline. However, the Center for Global Development (CGD) suggests this target was partially met by using existing development finance rather than providing "new or additional" funding.
• Latin America and the Caribbean (LAC) is highly vulnerable to climate change, with potential GDP losses estimated between 0.8% and 6.3% by 2030 and up to 23% by 2050. The agriculture sector is expected to be the most affected, which is critical as agriculture, fishing, and forestry represented 5.9% of the region's GDP in 2023.
• There is a massive funding gap in LAC; current climate finance flows are only 0.5% of regional GDP, whereas meeting NDC commitments requires an annual investment of 3.7% to 4.9% of GDP (USD 215 billion to 284 billion) until 2030. This represents a need for an 8 to 10 times increase in current flows.
• Climate finance in LAC is characterized by high concentration and a preference for loans over grants. Brazil, Mexico, Costa Rica, and Colombia receive nearly half of the region's funding, and 81% of international climate finance from 2016 to 2020 was provided as loans, increasing regional debt burdens.
• The region's ability to invest in climate action is constrained by a debt crisis. LAC countries account for 17% of global public debt (which reached USD 97 trillion in 2023), and many developing economies now spend more on debt interest payments than on social and climate expenditures.

APA

Team, Z. (2024). Promises and reality of climate finance flows in Latin America and the Caribbean. Zero Carbon Analytics. https://zerocarbon-analytics.org/insights/briefings/promises-and-reality-of-climate-finance-flows-in-latin-america-and-the-caribbean/

Chicago

Team, ZCA. Promises and reality of climate finance flows in Latin America and the Caribbean. Zero Carbon Analytics, 2024. https://zerocarbon-analytics.org/insights/briefings/promises-and-reality-of-climate-finance-flows-in-latin-america-and-the-caribbean/.

Wikipedia

{{cite report |last1=Team |first1=ZCA |title=Promises and reality of climate finance flows in Latin America and the Caribbean |publisher=Zero Carbon Analytics |date=11 November 2024 |url=https://zerocarbon-analytics.org/insights/briefings/promises-and-reality-of-climate-finance-flows-in-latin-america-and-the-caribbean/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{team2024promises, author = {Team, ZCA}, title = {{Promises and reality of climate finance flows in Latin America and the Caribbean}}, institution = {Zero Carbon Analytics}, year = {2024}, month = nov, url = {https://zerocarbon-analytics.org/insights/briefings/promises-and-reality-of-climate-finance-flows-in-latin-america-and-the-caribbean/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }