Climate finance tops $2 trillion but growth slows sharply, CPI report warns

Global climate finance surpassed $2 trillion for the first time in 2024, a milestone that nonetheless masks a troubling slowdown in the pace of investment needed to avert the worst effects of climate change, according to a report released during London Climate Action Week.

Climate Policy Initiative's Global Landscape of Climate Finance 2026, published on June 23, found that while flows are estimated to reach $2.1 trillion in 2025, the annual growth rate has decelerated from a 30% surge in 2021 to 6% in 2024 and an estimated 2–3% in 2025. The report warned that closing the investment gap will require "a step change" involving stronger domestic resource mobilization, deeper capital markets, and more strategic use of public capital.climatepolicyinitiative+2

Private Finance Drives Growth as Public Flows Retreat

The report highlights a structural shift in who is funding the climate transition. Domestic private actors now account for 60% of total mitigation finance and have driven roughly 70% of net growth since 2019. Households alone invested $332 billion in low-carbon solutions in 2024, covering electric vehicles, rooftop solar, and energy-efficient housing.climatepolicyinitiative

International public climate finance, however, is "trending down," according to CPI, creating pressure on least-developed countries that depend heavily on grants and concessional finance. The retreat comes even as the OECD reported that developed countries provided and mobilized $136.7 billion in 2024 toward their $100 billion annual goal.climatenetwork+2

The Gap Remains Vast

CPI's data dashboard estimates that an average of $7.8 trillion in annual climate finance is needed from 2025 through 2030 to avoid the worst impacts of climate change, rising to $9 trillion annually from 2031 to 2035. At the current growth trajectory, those targets appear increasingly out of reach.climatepolicyinitiative

Clean energy investment grew 17% in 2024 and accounts for about half of mitigation finance, buoyed by steep cost declines — solar PV and battery storage costs have fallen roughly 90% and 93% respectively since 2010. Yet adaptation finance plateaued at $64 billion in 2024, well below estimated needs.climatepolicyinitiative

The findings land amid broader fiscal retrenchment by donor governments and what a Climate Action Network statement called developed countries "shirking responsibilities" on climate finance commitments. CPI urged public funders to shift from competing with private capital to creating investment pipelines and de-risking projects where commercial finance has yet to scale.climatenetwork+1