At the climate summit in Baku, it was agreed that wealthy nations, including the Netherlands, will provide $300 billion annually in climate aid to developing countries starting in 2035. A new analysis by economists Herman Vollebergh and Asel Doranova, commissioned by the Dutch Parliament, reveals that wealthy countries differ significantly in how they fulfill their climate commitments, with major implications for the effectiveness of this aid.
In 2009, wealthy nations pledged to invest $100 billion annually in climate measures for developing countries, but it wasn’t until 2022 that this goal was actually met. At the recent climate summit in Baku, developing countries pushed for wealthy nations to invest $1.3 trillion per year in climate policies for developing nations starting in 2035. However, the final declaration settled on $300 billion annually.
This increased demand stems from the urgent need not only to combat climate change but also to address its impacts. However, the way this funding is reported raises many questions.
Grant or Loan
Countries vary significantly in how they provide climate financing. While Germany and France primarily offer loans, countries like the Netherlands focus more on grants. At the same time, there remains ambiguity about what qualifies as "climate financing." For instance, loans are often counted as financing, but they also increase the debt burden of poorer nations, even when provided on favorable terms.
Alternative Reporting Methods
The study reveals that wealthy countries have increased their per capita contributions. For instance, Germany raised its per-person contribution from USD 30 in 2015 to USD 50 in 2025. Sweden goes even further, contributing USD 138 per capita, while the UK has pledged to exceed USD 200 per capita by 2026.
Despite these rising figures, it remains challenging to determine the actual amount of climate financing provided, whether it is truly "additional," and if it achieves its intended impact. Measuring contributions is difficult due to varying reporting methods and the absence of crucial data. The Netherlands appears adept at leveraging private funds; in 2022, it secured 72% in additional private investments for every euro of public climate financing. This percentage is significantly lower in countries like France and Germany.
Organizations such as the OECD strive to increase transparency but remain reliant on data supplied by member states, which is often inadequate. There is still a pressing need for clearer insight into how funds are raised and spent to assess whether countries are meeting their commitments and ensuring the poorest nations are not further burdened with debt.
About the Research
This analysis, conducted by Herman Vollebergh and Asel Doranova, was commissioned by the General Committee for Foreign Trade and Development Cooperation of the Dutch Parliament. As part of the Parliament & Science collaboration, the committee asked researchers to deliver a factsheet comparing climate financing approaches in the Netherlands with those of other comparable countries. The first version of this factsheet was completed three years ago and has since been updated to reflect recent developments, including stricter EU requirements for monitoring climate financing under the Paris Climate Agreement.
The documents can be accessed here:
