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COP30: Latin America and the Caribbean arrive with good intentions but limited climate commitments
- GFLAC
- hace 4 días
- 9 Min. de lectura
COP30 in Belém, Brazil, is set to be a pivotal moment for Latin America and the Caribbean. A decade since the Paris Agreement, the region is attending this summit with a heightened awareness of the climate crisis, yet fiscal systems remain anchored in extractive models that finance crises more than their solutions.
The Sustainable Finance Index (IFS) 2025, with data up to 2024, provides an overview of these partial advances: overall, the 20 countries with the highest emissions in the region continue to receive more revenue and allocate more budget to carbon-intensive activities than to sustainable activities. This contrasts with the commitments made in their Nationally Determined Contributions (NDCs). Many of them have submitted their 3.0 contributions but with limited strategy and financial capacity to implement them.
In this context, COP30, which is a regional summit, will be a summit of truth, as President Lula called it, and therefore a summit of accountability, where the capacity and real interest of Latin American countries to convert their climate goals into concrete fiscal decisions will be put to the test.
What is the outlook for sustainable finance in the region ahead of COP30?
The IFS 2025 shows that the region is making uneven progress toward sustainable public finances. On average, carbon-intensive revenues exceed sustainable revenues by a factor of eleven, and spending on polluting sectors is five times higher than sustainable spending.
Together, the 20 countries analyzed generated USD 199.5 billion in fossil fuel revenues, compared to only USD 17.9 billion in sustainable revenues. In terms of spending, USD 71.3 billion went to carbon-intensive activities, and only USD 13.1 billion to sustainable activities.
These figures reveal a significant gap between rhetoric and the alignment of public finances with climate change concerns.
None of the countries assessed has yet reached a balanced structure in its public finances. In this version of the index, Panama scored 3.5 out of 4.0 points, meaning that its performance and transition toward more sustainable finances improved compared to other years. This can be explained by its low dependence on income from carbon-intensive activities and an increase in the receipt of international sustainable financing.
At the opposite end of the spectrum, Trinidad and Tobago has the lowest scores, although with slight improvements over previous years. In the case of Cuba, it appears in lower categories due to limited information for analysis.
In terms of revenue, the Dominican Republic has the highest percentage of financing for biodiversity and climate change out of the total development financing received, representing nearly 50%. However, countries such as Ecuador, Mexico, Trinidad and Tobago, and Peru continue to rely heavily on revenues from carbon-intensive activities and extractive sectors, which limits their energy and fiscal transition.
In terms of budget, the 20 countries analyzed devote on average less than 1% of their budget to activities related to climate change, energy transition, and biodiversity protection. El Salvador is the country with the highest allocation of sustainable budget from its total budget, exceeding 5%.
Meanwhile, resources allocated to carbon-intensive activities represent on average about 4% of the total budget. Some countries, such as Bolivia and Costa Rica, even exceed 15% of their public spending in these areas.
How are countries in the region progressing in terms of NDCs?
Between November 6, 2024, and November 5, 2025, 15 countries in the region submitted new NDCs to the United Nations Framework Convention on Climate Change (UNFCCC). However, only eight of them correspond to the so-called NDCs 3.0, considered “state-of-the-art” because they integrate broader approaches to equity, adaptation, and climate justice. This partial progress reflects an uneven landscape, marked by institutional and financial constraints that prevent many governments from meeting deadlines or firmly raising their ambition.
At GFLAC, we evaluated these new NDCs under our methodological framework of “10 points to make NDCs financeable instruments.” The results show a mixed picture: there is notable progress in incorporating principles of climate justice, equity, biodiversity, and transparency, and in creating monitoring systems and institutional strengthening. But fundamental challenges remain.
Few countries have defined actual implementation costs, as was the case with Barbados, Bolivia, Nicaragua, and Venezuela. Few countries, such as Belize, Chile, Colombia, and Ecuador, have identified financing gaps in their economies.
Eight of the fifteen updated NDCs (from Barbados, Bolivia, Chile, Colombia, Ecuador, Jamaica, Saint Lucia, and Uruguay) mention the formulation of national climate finance strategies. Uruguay stands out for innovating with sovereign financial instruments indexed to climate and biodiversity indicators, such as climate change-indexed bonds and loans, which link environmental goals to national economic policy.
In the case of Small Island Developing States (SIDS), such as Barbados and Belize, the NDCs present a good level of technical and financial detail: Barbados has mobilized resources through debt swaps for nature and resilience, and Belize quantifies its financing gap at USD 1.3 billion, equivalent to 85% of its total needs.
In most cases, access to resources remains conditional and dependent on international support, which limits the autonomy to advance the just and sustainable transition that the region needs. The region arrives in Belém with progress in discourse, but still with a need for international climate finance, which is why the discussion of Article 9.1 of the Paris Agreement, which addresses the financial commitments of developed countries, is very relevant for the region.
It is also important to advance the transformation of public finances, as suggested by Article 2.1.c, which is also under discussion at COP30. This article calls for all financial flows to be consistent with low-carbon development, and although some countries in the region are already on track, they will depend on various factors to achieve this at a pace compatible with the climate crisis.
How is Brazil doing in terms of sustainable finance?
Brazil comes to COP30 with a central role in the global climate finance agenda. According to the Overview of Climate Finance in Brazil (iCS, 2025), the country mobilizes an average of USD 208 million annually for mitigation, concentrated mainly in the Amazon (80%) and in the land use sector (76%).
Although it depends on a small group of international donors (75% of the total) and allocates only 1.5% to institutional strengthening, Brazil has launched innovative initiatives such as the Ecological Transformation Plan, the Brazil Investment Platform (BIP), and the Tropical Forest Forever Fund (TFFF), which seek to connect sustainable projects with national and international capital.
The IFS 2025 shows that Brazil has an average level of sustainable finance performance with a rating of 1.9 out of 4.0 points. The country earned 11 times more revenue from carbon-intensive activities (USD 36.1 billion) than from sustainable financing (USD 3.2 billion), and allocated four times more budget to carbon-intensive sectors (USD 12.1 billion) than to sustainable initiatives (USD 2.9 billion).
In its first subnational edition in Brazil, the Subnational Sustainable Finance Index (IFSS) from GFLAC (2025), with data from 2024, reveals that Brazilian states generate 13 times more revenue from carbon-intensive sources (R$18.5 billion) than from sustainable revenue (R$6.2 billion), mainly from oil royalties and vehicle taxes. In contrast, they allocate 1.5 times more resources to carbon-intensive sectors (R$32.6 billion) than to sustainable activities (R$21.1 billion).
In terms of sustainable revenues, Pará (3.3%) and Rio de Janeiro (2.4%) stand out. In the case of Pará, this is due to its high collection of environmental taxes and fines, while Rio de Janeiro obtained significant revenues from compensation related to the use of water resources.
However, Rio de Janeiro also has a particularly high level of carbon-intensive revenue (26.9%), mainly linked to the oil industry, followed by São Paulo (8.3%) and Espírito Santo (6.7%). In terms of spending, Alagoas (6.2%), Ceará (3.7%), and Bahia (2.9%) allocate more to sustainable sectors, but the amounts remain small
Brazil updated its Second NDC in 2024, raising its emission reduction target to 53% by 2030 and reaffirming carbon neutrality by 2050. However, the document lacks a detailed financial plan. The absence of a national climate finance framework with clear governance limits the possibility of turning this ambition into measurable results.
In summary, Brazil arrives at COP30 with political leadership and a key role in the global climate finance architecture, but with a persistent gap between ambition and execution.
How is Mexico doing in terms of sustainable finance?
For Mexico, COP30 comes at an important moment. According to the IFS 2025 results, the country has a low-medium level of performance in sustainable finance, with a score of 1.3 out of 4.0 points. Mexico earned 85 times more revenue from carbon-intensive activities (USD 117.1 billion) than sustainable financing (USD 1.3 billion), and allocated 15 times more budget to carbon-intensive sectors (USD 44.4 billion) than to sustainable activities (USD 2.8 billion).
For its part, the results of the Subnational Sustainable Finance Index (IFSS) 2025 confirm that fiscal sustainability is still in its infancy in Mexico. In 2024, the 32 federal entities generated 24.1 billion pesos in sustainable revenues, compared to 117.8 billion pesos from carbon-intensive sources, a ratio of almost five to one.
The trend is repeated in spending: 30.3 billion pesos in sustainable budgets compared to 105.1 billion pesos in polluting and carbon-intensive activities.
No state has yet reached a balanced allocation of its public finance. Overall, Zacatecas (2.4 points) and Oaxaca (2.3) performed above average, while Sinaloa, Aguascalientes, Baja California, Colima, and Chihuahua ranked at the bottom, with low sustainable finances.
In terms of sustainable revenues, Yucatán (3.69%) and Mexico City (3.29%) are in the upper-middle range, reflecting progress in diversifying their sources of financing. In contrast, states such as Chihuahua (11.08%) and Campeche (8.05%) remain heavily dependent on revenues from carbon-intensive activities.
In terms of sustainable spending, Mexico City (4.59%), Jalisco (2.19%), and Tabasco (1.93%) top the list, although no entity has yet exceeded the threshold of 5% of its total budget for sustainable spending. In contrast, when looking at spending on carbon-intensive activities, Mexico City once again stands out, this time as the entity with the highest proportion of spending on carbon-intensive sectors (15.53%), followed by Nuevo León (6.35%) and Chihuahua (6.22%).
Mexico has not yet formally submitted its NDC 3.0. In preparation for this process, the Ministry of Environment and Natural Resources (SEMARNAT), in collaboration with GFLAC, carried out a participatory process: the National Dialogue on Climate Finance and NDC 3.0, held on August 12, 2025. This meeting brought together actors from the public and private sectors, academia, international cooperation, and civil society, with the aim of fostering a technical and strategic meeting space between key actors linked to the provision, mobilization, and management of climate finance. Its purpose was to identify viable financial and economic mechanisms and instruments that would inform the design of NDC 3.0.
Throughout the dialogue, key elements for strengthening the country's financial architecture were addressed. Among the topics discussed were: the need to build economic and financial instruments that support the climate transition; improving inter-institutional coordination to avoid fragmentation of efforts; strengthening access to, management and use of international climate finance; and moving towards monitoring and evaluation systems that allow for greater clarity, transparency and traceability of climate finance. These reflections made it possible to identify progress, challenges, and opportunities to guide NDC 3.0 toward clearer, more coherent, and more sustainable implementation mechanisms.
The relevance of this process becomes evident when considering the outlook presented by the IFS and IFSS for Mexico, where significant gaps persist in the country's financial, budgetary, and institutional conditions. Against this backdrop, the national dialogue generated inputs and points of convergence that can contribute to a more realistic reflection on the financial challenges facing NDC 3.0. The participation of multiple sectors made it possible to identify commonalities, gaps, and needs, reinforcing the urgency of moving toward sufficient and sustainable financial mechanisms, reducing institutional fragmentation, and strengthening intersectoral coordination. Only through a more solid and coherent financial architecture will Mexico be able to turn its NDC 3.0 into an applicable instrument with real implementation capacity.
Conclusions
Latin America and the Caribbean arrive at COP30 with progress in climate planning, but with significant delays in the alignment of their public finances. The results of the IFS and national IFSS confirm that the region continues to finance the crisis more than its solution. This scenario will be key in the COP negotiations, because while more and better international climate finance must be demanded, progress must also be made in making financing flows more compatible with low-carbon and climate-resilient development.
In this regard, countries must translate their commitments into comprehensive financial strategies, with coherent budgets, robust monitoring systems, and participatory governance.
Brazil and Mexico, the two largest economies in the region, have a strategic responsibility: to lead with consistency. Brazil must consolidate its climate finance framework; Mexico must close the gaps between subnational planning and execution. Subnational analyses of both countries reveal that there is still a strong dependence on carbon-intensive revenues and that budget allocations do not yet prioritize sustainability, which slows down the consolidation of a just transition in the territory.
COP30 in Belém is a historic opportunity to redefine regional financial architecture. Latin America and the Caribbean can—and must—turn their finances into allies for climate action, not only to meet their international commitments, but also to ensure a more just, resilient, and sustainable future for the next generations.
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