The Climate Promise That Won T Survive Geopolitics

Every climate conference promises finance. Every time, the money arrives in the wrong form, in the wrong channel and in the wrong magnitude. Now the world is trying again. Last month, the G7 finance ministers reaffirmed their unwavering commitment to climate finance. But the real question isn’t whether climate finance can be raised. It’s whether climate finance can survive a world falling apart.The escalating tensions in West Asia involving Iran, Israel and the US is entering its third month, the surge in defence spending in Europe post-Russia-Ukraine was unprecedented since the Cold War and India’s quiet recalibration of its energy import strategy post reciprocal tariff regime by the US brought with it significant geopolitical implications. None of these events are classified under climate policy. Yet together, they expose a fatal flaw in the world’s newest climate finance goal by proposing a $ 300 billion annual floor situated within a broader mobilisation effort of $ 1.3 trillion per year by 2035 under the New Collective Quantified Goal (NCQG), centred around COP29 in Baku in November, 2024.However, geopolitical dynamics are inherently uncertain and often transient. Consequently, commitments that may initially appear credible may lose their viability when conditions change. Climate money expands in periods of cooperation. But it contracts under geopolitical stress. And right now, stress is all we have.The NCQG, which replaces the failed $100 billion commitment from Copenhagen 2009, aims to mobilise $1.3 trillion per year by 2035 from public, private, and multilateral sources. On paper, this is pragmatic. Fiscal constraints mean public money alone cannot bridge the gap. Private capital must be crowded in. Multilateral development banks must lend more. But pragmatism becomes delusion when it ignores how finance actually behaves under pressure.Here is the uncomfortable truth that no COP communiqué admits: Green finance is neither recession-proof nor war-proof. When geopolitical tensions rise, capital flees to safety. Governments reallocate budgets toward defence, energy security and industrial policy. Long-term climate commitments which require stable, predictable finance over decades compete with immediate political priorities. And they lose. The $ 100 billion goal was undermined by inconsistent definitions, inflated accounting and uneven allocation. The $1.3 trillion goal faces something more dangerous: A world where the rules of cooperation are breaking down.The NCQG’s reliance on private finance assumes that public interventions can reliably crowd in capital at scale. But developing economies face persistent regulatory uncertainty, currency volatility and weak institutional frameworks all of which translate into higher risk premiums. Capital flows where returns are predictable, not where climate needs are most urgent. This is the mobilization trap: Finance gets counted, but not delivered in forms that are accessible or affordable. The $ 100 billion experiment proved that. There is no reason to believe $ 1.3 trillion will be different.Even if the money arrives, it arrives skewed. Historically, climate finance has concentrated on mitigation through renewable energy, where revenue streams are clearer, while adaptation remains chronically underfunded. The NCQG does not fix this imbalance, rather, it risks widening it. Worse, by expanding the pool of contributors to include private actors and multilateral banks, the new framework dilutes accountability. The $300 billion floor is tied to developed countries. The remaining $1 trillion depends on mobilisation, a word that has historically meant less scrutiny, not more.For India, this is not an abstract debate. The country’s development trajectory demands a delicate balance between rapid growth and deep decarbonization. According to estimates from the NITI Aayog report, the financial requirements may reach approximately $ 6.5 trillion over the coming decades to realise the critical double pivots. But access to affordable, reliable finance is precisely what the NCQG cannot guarantee. If climate money retreats during the next global crisis and there will be a next crisis, India will be left holding a transition plan without the capital to execute it. Rather than identifying the issue as a funding gap, it is wise to address this as a design flaw.The NCQG was supposed to be the moment climate finance grew up moving from billions to trillions, from aid to investment, from developed-country charity to global mobilisation. But scale without resilience is just a larger target to miss. The test is not whether $1.3 trillion can be pledged. It is whether those pledges can survive the next war, the next recession, the next realignment of alliances. Without institutional arrangements that lock in commitments beyond political cycles, the world will repeat the same mistake: Scaling ambition and scaling the gap between promise and delivery.(The views expressed are personal)This article is authored by Suvajit Banerjee, fellow, National Council of Applied Economic Research (NCAER), New Delhi and Stutii Srivastava, financial analyst, University College London.