Climate Finance in 2026: From the Baku Unity Pact to a Tripled Adaptation Target

Professor Tommy Bang Sup Keum, Tech University of Korea

A New Collective Goal, Set in Baku

COP29, held in Baku, Azerbaijan, produced a new collective quantified goal (NCQG) built on two tiers. The first is a floor: developed countries, "taking the lead," committing at least $300 billion a year by 2035 in public climate finance. The second is an aspirational goal of $1.3 trillion a year by 2035 from all sources combined — public, private, and multilateral. The $300 billion floor triples the prior 2020–2025 target of $100 billion a year; the pathway to the larger $1.3 trillion figure is left to a "Baku to Belém Roadmap," which the COP29 and COP30 presidencies (Azerbaijan and Brazil) were mandated to jointly produce.

Adaptation Finance Still Lags

Implementation, however, continues to trail ambition. Total climate finance reached a record $136.7 billion in 2024, yet funding directed at adaptation remains persistently behind funding for emissions mitigation. At COP26 in Glasgow (2021), developed nations pledged to double adaptation finance by 2025 relative to 2019 levels of roughly $20 billion. Data released since then indicates that target was not met.

In response, governments meeting at COP30 in 2025 agreed to urge developed countries to triple adaptation finance by 2035 — an acknowledgment, at the highest diplomatic level, that adaptation has been structurally underfunded relative to need.

The Loss and Damage Fund's Reality Check

The Fund for Responding to Loss and Damage (FRLD) — agreed in principle at COP27 (2022) and formally operationalized at COP28 (2023) — exists to support countries that are particularly vulnerable to both sudden climate disasters and slow-onset impacts such as sea-level rise, covering both economic and non-economic losses.

Pledges at COP28 totaled roughly $700 million. Set against estimates of the annual losses developing countries actually incur, that sum represents less than 0.2 percent of need. The gap between the fund's symbolic significance and its operational scale remains the central point of contention in the loss-and-damage debate.

The Green Climate Fund's Persistent Imbalance

The Green Climate Fund (GCF) illustrates why the accounting basis matters. According to the Fund's own portfolio data (as of 7 July 2026), the nominal split between mitigation and adaptation financing is an even 50/50. On a grant-equivalent basis, however, the picture flips: adaptation accounts for 60 percent and mitigation for 40 percent. That is because mitigation projects (renewable energy, efficiency) draw more heavily on non-grant instruments such as loans, while adaptation projects (disaster-resilient infrastructure, agricultural resilience, water-resource management) rely proportionally more on outright grants. The common claim that adaptation is systematically underfunded relative to mitigation therefore depends heavily on which accounting basis — nominal or grant-equivalent — is being used, and the two bases do not always point in the same direction.

What This Means for Green ODA Programming

These trends carry several concrete implications for Korean ODA implementing and research institutions.

• Growing opportunity in adaptation-sector programming. The international community's formal acknowledgment of the adaptation financing gap suggests that KOICA, EDCF, and Korea's GCF-accredited intermediaries (including the Export-Import Bank) are likely to expand adaptation-oriented calls in the coming cycles — particularly in agricultural resilience, water management, and disaster-risk reduction, where early capacity-building now will pay off later.
• Designing programs that connect to loss-and-damage financing. While the FRLD's current scale remains small, institutions that build anticipatory-action design capability now — shifting from post-disaster recovery toward pre-emptive loss reduction — are positioned to benefit disproportionately as the fund grows.
• Mitigation–adaptation co-benefit design. Program designs that simultaneously target mitigation (for example, carbon reduction through mining-waste repurposing) and adaptation (local economic resilience) merit particular attention, since they tend to score favorably under both the nominal and grant-equivalent accounting bases described above.

The gap between pledged climate finance and actually disbursed, adaptation-weighted finance remains wide. But as the Baku and COP30 agreements make clear, adaptation and loss-and-damage financing are expected to be the fastest-growing segments of the global development-finance architecture over the next decade. Korea's ODA ecosystem has a window to position itself ahead of that curve.

Sources - Climate Funds Update — Global Climate Finance Architecture (2024) - Climate Home News — Rich countries "not on track" to meet adaptation funding goal - Climate Funds Update — Fund for Responding to Loss and Damage - Council on Foreign Relations — Understanding the Global Push for Climate Finance - International Relations Review — Loss and Damage Funds and Climate Justice - UNFCCC — COP29 UN Climate Conference Agrees to Triple Finance to Developing Countries - Green Climate Fund — Portfolio: Adaptation (as of 2026-07-07)