Can Brazil help mobilize $1.3 trillion to address the climate crisis in the Global South? An analysis of the Roadmap from Baku to Belém

By: Dr Sandra Guzmán | Founder and General Director (GFLAC)

You don't have to be a climate activist to know that the climate crisis is increasing financial pressure on many countries around the world, especially those in the so-called Global South, where not only are the most profound effects felt, but where populations are least equipped to deal with the impacts. The historical demand of developing countries, especially small islands and least developed countries, has been for accessible, new, and additional financing to address the challenges posed by climate change and other problems.

However, the growing call for more resources from developed countries has not been heeded. Although this development has been largely made possible by the extraction and exploitation of the resources, populations, and territories of the Global South to enrich their economies, technologies, and services, they have done so under an industrial model that has caused alterations in ecosystems and the emission of pollutants that cause not only climate change but also soil, air, and water pollution, not to mention the huge human rights violations that have resulted from these activities.

It is this legacy of pollution that is the basis for holding developed countries responsible for paying for what they have historically caused. They must pay those populations and territories that, far from contributing to these impacts, have been victims of the consequences. The demand is legitimate.

That is why the outcome of the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) in Baku, Azerbaijan, caused so much anger. Because it resulted in an agreement to mobilize $300 billion for developing countries, replacing the $100 billion target agreed in 2009, i.e., tripling the original commitment over 15 years is both inadequate, and arguably, disrespectful.

It is true that European countries and others in the bloc of developed countries said they had no more public money to commit, but above all, they also referred to the fact that the environment and climate teams within developed countries that have been pushing for more resources have little or no capacity to act in the face of their countries' treasuries.

And so, developed countries came up with an agreement that was "unbelievable" in the eyes of those who see climate change as a daily reality in their territories, but it was "understandable" to those who see that politicians in the so-called first world are not aligned with climate action, much less with the idea of "helping" countries in the Global South, especially those whose emerging economies are transitioning to a model of high greenhouse gas emissions, as is the case of China.

Let's say it loud and clear: developed countries do not want to continue financing the development of countries such as China, which are now their commercial competitors. The underlying problem is that not all developing countries are China. In fact, there are only a handful of countries in the South that could be considered emerging economies today, with growing gross domestic product. However, it should be clarified that this does not mean per capita well-being, nor does it mean that these emerging countries have overcome all their development challenges, as their levels of poverty and unemployment remain high. That is why they are still emerging economies. 

The Baku to Belém Roadmap to mobilize $1.3 trillion: the solution or the problem? 

Faced with the terrible idea of leaving Baku with a target of $300 billion, some countries proposed a course of action that would mobilize another $1 trillion as a desirable goal, so that a more "fair" figure could be aspired to for the countries of the Global South. Some countries, including Colombia, under the leadership of former minister Susana Muhammad, promoted the creation of a Roadmap from Baku to Belém to plan the mobilization of $1.3 trillion. The proposal is that Brazil, as the incoming president of COP30, and Azerbaijan, as the president of COP29, should lead this process to determine how to mobilize this amount of resources.

The idea of coming up with $1.3 trillion instead of $300 billion was undoubtedly better. But the problem was not the amount, but how to define the type of resources that should be part of this route. Therefore, it was established that financing within this route should "increase financing for developing countries to support their emission reduction and climate-resilient development pathways and implement their Nationally Determined Contributions (NDCs) and National Adaptation Plans, including through grants, concessional and non-debt-creating instruments, and measures that expand fiscal space"...  (UNFCCC, NCQG Decision, 2024). 

What the decision that paved the way tells us is that it is not a question of counting every cent that flows around the world in relation to climate change as part of the Roadmap, but rather those funds that meet the above-mentioned characteristics. This means that countries must be clearer about what counts and what does not. Above all, because we are talking about a variety of public and private accounts. But the key adjectives are: "donations, concessional and non-debt-creating instruments, and measures that expand fiscal space"... 

In this context, the Roadmap is a highly desirable document for moving from action to implementation in the Global South, but the underlying question is: can Brazil and Azerbaijan build a roadmap that is capable of meeting the needs of developing countries and responding to the limited expectations that developed countries have of the Roadmap?

Let's start by saying that the Roadmap, given the way in which the decision that gives life to the process is worded, does not determine that it will be an element of negotiation. In other words, once constructed, there appears to be no provision requiring formal adoption by the countries. This reduces the political burden, but increases the uncertainty of what the document, report, or whatever deliverable is to be presented at COP30 may be.

The truth is that Brazil has started a consultation process to request inputs that can help design this roadmap. They began with a call for submissions from countries and non-governmental actors, receiving 191 inputs, but only 19 from countries. This was followed by informal meetings on the sidelines of other events, such as the World Bank meetings and others. However, it was in Bonn, Germany, at the 62nd session of the UNFCCC subsidiary bodies, that "formal" consultations were held to receive views from stakeholders.

However, there was limited time for consultations in Bonn. This and other factors have led to uncertainty about the process and the deliverable to be presented at COP30. Governments and organizations left Bonn with more questions than answers about the capacity of Brazil (and Azerbaijan) to lead a process that could be decisive for developing countries.

There is a perception that this Roadmap not only lacks a formal process, but there are also doubts about its content and whether it is truly implementable or just another diagnosis, with data already known from well-known agencies and organizations, whose recommendations have not changed the course of action.

But there are not only doubts about the content, but also about its implementation points. For example, to what extent will the Roadmap be able to distinguish between the 300 billion and 1 trillion targets, or to what extent will it be able to address real needs such as significantly increasing financing for adaptation, or even to what extent will it be able to strengthen a series of financing mechanisms that provide certainty and predictability, seeking clear participation between the public and private sectors? On this and other points, there are clear tensions that require special treatment.

For these reasons, it is difficult to determine today whether the Roadmap is a solution or an instrument that, due to its lack of clarity, is becoming a problem and a distraction.

Brazil: From internal coordination to international mobilization  

The high expectations generated by Brazil's arrival as president of COP30 are due to the country's well-known diplomatic skills in other forums, such as the G20, the BRICS group, and others. There is no doubt that Brazil could have the capacity to build a bridge between developed and developing countries. However, it is important that expectations are translated into national alignment that will enable them to achieve the global mobilization that is required. 

On the Road from Baku to Belém, this coordination is key. On the one hand, because the process has been led by the Ministry of Finance, which is recognized for its management within the G20, a forum that is not quite similar to the discussions and aspirations of the UNFCCC. While the Ministry has demonstrated significant capacity for dialogue, its vision for the involvement of external actors such as the private sector in order to make the Roadmap implementable is important and pragmatic, but it ignores the reality and origin of the Roadmap, which is based on the understanding that this financing is intended to address the needs of developing countries, especially those that are most vulnerable, i.e., countries where the private sector has no interest or a predominant role.

That is why the UNFCCC has been the ideal forum for addressing these needs, and although it requires external action, the Roadmap cannot ignore what must happen within the Convention.

In this sense, the path requires two interactive processes, one that connects with the realities "outside," such as international financial institutions, other United Nations processes such as the development financing conversation itself, the fiscal convention, the possible debt convention, and others; but it also requires a clear connection and interaction with processes within the Convention, such as the global adaptation goal, long-term financing, the Standing Committee on Finance, the Global Stocktake, climate funds, and others that are part of the official process and require clear alignment so that the money mobilized within this new climate finance goal truly has an impact and is effectively accountable.

 In other words, the Ministry of Finance should focus its efforts not only on the quantity but, even more importantly, on the quality of financing. Let us remember that the key points are: "grants, concessional and non-debt-creating instruments, and measures that expand fiscal space".

In this constructive spirit, the Brazilian Ministry of Finance has created a Circle of Finance Ministers to draft a document setting out proposals, the first of which was presented in Seville, Spain, at the Financing for Development Conference, during a closed doors event.

So far, five priorities have been identified for this document: 1) Concessional financing and optimization of climate funds; 2) Reform of multilateral development banks to scale up sustainable financing; 3) Boosting domestic capacities and voluntary national platforms for climate investments; 4) Developing innovative financial instruments to mobilize private capital; and Strengthening regulatory approaches to climate finance.

However, in recent consultations with civil society, it has been clarified that this document (which is not public and to which only some participating countries have had access) is not the Roadmap from Baku to Belém and is only a contribution. In other words, if the work promoted by the Ministry of Finance is not the Roadmap, the question is: what is the Roadmap and who is drafting it?

We are just a few months away from the COP, and the lack of clarity about the Roadmap is causing disappointment and frustration, because even if the Roadmap is a "non-negotiable" element, it is essential to determine what it is, what it contains, and above all, to guarantee a transparent space and process. Otherwise, there is a risk that whatever is presented will be born and die at the COP itself.

What does the success of the Roadmap depend on?

Given this level of uncertainty, there are some key points that can help to amend the path and move forward:

·      Clarity in the process: the Roadmap represents a strategic opportunity to guide the mobilization of resources towards meeting the needs of developing countries, including immediate and medium-term needs. This means that it is crucial to have a clear plan for reaching $300 billion and a plan for reaching $1.3 trillion. However, its non-negotiable nature and the lack of transparency in the process limit the possibility of substantive interaction that would allow for its adoption and implementation to be visualized. There have been rumors that there will be a draft roadmap by September and perhaps a final draft in October, for official presentation during COP30. In this context, it is essential that the presidencies of Azerbaijan and Brazil provide clarity on the process, as well as on how the various inputs will be processed and incorporated into the Roadmap.

• Clarity of objectives: in the absence of an initial draft, it is unclear how the Roadmap will be consistent with the provisions of the Paris Agreement. In particular, it should clearly state its objective within the framework of Article 9, emphasizing how it will comply with the aspects included in Article 9.1 and others. This will be key to providing certainty about what type of resources will be integrated and accounted for, where the definition of what will come from developed countries as part of their commitments is at the center of the discussions.

• Adaptation at the center: The Roadmap must incorporate adaptation as a priority, ensuring that all, or at least most, of the $300 billion per year is allocated to this purpose. It is important that these resources come mainly from public sources, in the form of grants and other non-debt instruments, as established in the decision. The Brazilian government and the parties must consider that there is no other space in the negotiations where the issue of financing for adaptation will take center stage. If this Roadmap does not put adaptation at the center, it will be a failed effort by the presidencies and the climate system as a whole, because it is in adaptation that the needs of developing countries.

• Clarity of sources: One of the main limitations of the new collective and quantifiable financing goal has been the lack of definition of the proportion of resources from public versus private sources, especially those that will come from developed countries. The ministers' circle includes issues such as innovation for mobilizing private capital, but this distinction needs to be addressed more precisely and strategically integrated into the Roadmap in order to provide certainty to developing countries and ensure transparency in the monitoring of financial commitments. This has a key bearing on the type of measures to be addressed. In other words, adaptation cannot depend on private resources, and if this is not recognized in the Roadmap, there is a risk of replicating and perpetuating past problems and delaying adaptation processes, which will generate more losses and damage and, with them, more costs.

• Clarity of instruments: in this regard, it is crucial to clearly establish what types of instruments will be considered in the Roadmap. Similarly, the circle of ministers refers to concessional resources, the role of multilateral development banks, and others, but does not make clear how this feeds into the Roadmap and its objectives. The quality of financing must comply with the provisions of the NCQG decision, which promotes non-debt-generating resources that expand the fiscal capacity of developing countries. Therefore, greater precision is required regarding the debt-free financial instruments that will be considered, in contrast to those that could be leveraged through other mechanisms. The call to Brazil and the rest of the world is to be cautious and avoid counting all possible resources, as the Roadmap is not about the quantity of resources. For that, we have Article 2.1.c, which calls for all flows to be compatible with low-carbon development. This Roadmap is to ensure quality financing for developing countries.

The Brazilian Presidency must be able to understand the gaps and mistakes that have been made in the past, in order to integrate this learning into the Roadmap and thus avoid dragging along the problems we already know about and which we know have prevented progress in the adequate provision and mobilization of financing for developing countries. And we must not forget that the Roadmap must consider aspects to be worked on within the Convention, while continuing to send clear messages to processes outside it, such as the reform of the international financial system, the Fiscal Convention, and other forums. This coordination is key to ensuring a significant impact on the global financial ecosystem as a whole.

We ask the Brazilian presidency for transparency, and we ask the rest of the world for consistency. We cannot allow 2025 to be another lost year for the climate. We can no longer afford that luxury. Allowing the Roadmap to be born and die at the COP is negligence towards present and future generations.

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