For more than 20 years, WRI has identified annual “stories to watch.” These are the year’s moments, issues and decisions that we believe will shape the future trajectory of the world. In the past, we’ve highlighted things like dangerous heat in cities, major elections and their effects on geopolitics, food system reform and more.
- food system reform and more.
- food system reform and more.
- food system reform and more.
- food system reform and more.
This year is different. There aren’t stories to watch in 2025. There’s just one — but it affects everything from climate action to nature conservation to human rights. It’s a story that too often flies under the radar despite vast implications for the future of life as we know it.
It’s climate finance — and this year is a bellwether of the world’s ability to provide it at scale.
2025 Is the Year to Care About Finance for Climate and Nature
At last year’s UN climate summit (COP29), wealthy nations agreed for the first time in 15 years to increase the amount of money they provide for climate mitigation and adaptation in developing nations. The new target — $300 billion annually by 2035 — is better than the previous goal of $100 billion a year by 2020. But it’s still a far cry from what’s needed. That’s why leaders from all nations also agreed that all actors should work together to mobilize $1.3 trillion per year by 2035 for the countries most vulnerable to the impacts of climate change.
This $1.3 trillion recognizes the gap between what developing nations can realistically provide domestically for things like clean energy development and climate-smart agriculture, and what will be needed from external sources. It will be extremely difficult to secure the $1.3 trillion. But make no mistake: We must do it.
We know what will happen without adequate climate finance: Resource-strapped communities will suffer the most from increasingly devastating droughts, floods, wildfires and heatwaves, even though they’re least responsible for causing the problem. That’s why delivering the $1.3 trillion isn’t just about finance — it’s about justice.
We also know that without significant emissions reductions from all nations — wealthy and developing alike — the world will not meet its decarbonization goals, exposing everyone to the existential crisis that is climate change. Finance from richer countries to developing ones isn’t charity; it’s an investment in a safer world.
Finally, ambition and finance are two sides of the same coin. You can’t get ambitious nature and climate policies without the finance to execute them. Finance and ambition are a virtuous cycle — and this is the year to unlock both.
So let’s dive deep into what’s needed to achieve the $1.3 trillion goal, and what to watch this year to see if it’s coming to fruition.
1) What’s the Money For?
In short, the $1.3 trillion must support two goals: building resilience in developing nations while also securing their low-carbon growth.
The effects of climate change are growing ever-more costly and dangerous, but the risks aren’t evenly distributed. Vulnerable nations — those with the fewest resources to respond — are projected to face more than half a trillion dollars in climate-related damages every year by 2030. Meanwhile, finance for building resilience remains paltry, with a $360 billion gap between what’s needed and what’s provided every year. Of the adaptation finance that is flowing, less than one-fifth reaches the communities who need it most.
