The collapse of negotiations at the 2009 United Nations climate conference in Copenhagen, Denmark, had repercussions that have shaped international climate finance to this day. Rich countries like the United States and much of Europe, which are responsible for the vast majority of historical carbon emissions, refused to back a strong commitment to limit global warming, despite the furious objections of poorer nations who were already suffering from the effects of climate change. 

Instead, as a kind of consolation prize, then-Secretary of State Hillary Clinton made a vague promise to ramp up aid for decarbonization and disaster response in less fortunate countries around the world. She proposed that wealthy nations would send $100 billion in climate finance to poorer nations every year by 2020. The $100 billion number was far below the true need in those poorer nations, but it was adopted by negotiators and today is still the largest-ever financial commitment for climate change.

More than a decade later, developed countries only now seem to be fulfilling that promise. Preliminary data revealed this week in a new report by the Organization for Economic Cooperation and Development, or OECD, indicate that the $100 billion goal may have finally been met in 2022. However, this comes after the countries blew through their initial 2020 deadline; in 2021, wealthy nations only provided around $90 billion of climate finance to the developing world, even as climate-driven disasters wreak havoc on poorer nations in Southeast Asia and sub-Saharan Africa.

The United States in particular is lagging behind. If it was to pay a share equivalent to its historical carbon emissions, the country would be responsible for nearly half of the $100 billion; it has contributed just a fraction of that.

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The majority of the funding provided still comes in the form of loans that developing nations must repay. Wealthy nations have also spent far more money on climate mitigation projects like solar farms than they have on adaptation projects to protect against floods and famines, leaving poor countries vulnerable to climate disasters even as they take steps to emit less than countries that developed earlier. Adaptation funding decreased in 2021 by 14 percent compared to 2020 and made up just a quarter of the $90 billion, according to the OECD report. Critics also say that some money tagged as climate aid has in fact funded projects that have nothing to do with climate change.

“We are very disappointed with the ambition from richer nations,” said Isatou Camara, a development planner for the finance ministry of the Gambia and a climate negotiator for a coalition of the least economically developed countries. “What we’ve been hearing from them was that they don’t have the resources to actually fulfill this commitment, but really there’s a lack of political will.” She pointed out that wealthy countries spent billions of dollars on domestic relief at the outset of the COVID-19 pandemic, even as they were lagging behind on their international commitments.

The shortcomings of the $100 billion pledge have eroded trust between the developed world and the developing world, altering the tenor of conversations about climate aid. Even with indications that the goal was likely met in 2022 — two years behind schedule — wealthy nations have a long way to go to rebuild trust with countries in the Global South. 

“Showing that we have met [the $100 billion] goal is an important milestone, but that’s what it is — it’s a milestone,” said Steven Guilbeault, Canada’s climate minister, at a press conference discussing the report. “It doesn’t solve all of our problems. The conversation needs to shift. We’ve mobilized $100 billion. How do you mobilize a trillion dollars?”

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Negotiators are now trying to work out a new and more ambitious funding pledge, one that would funnel much more money to developing countries and would guarantee grant support for climate adaptation projects, but mistrust is making it more difficult than ever to reach a consensus. The deadline for agreeing on a new goal is next year, and the progress of negotiations at COP28, the United Nations climate conference later this month in Dubai, will have huge implications for developing countries’ efforts to survive climate change.

Grants are still a small portion of the funding available to poorer nations, according to the OECD, which maintains the most comprehensive accounting of international climate finance. In 2021, wealthy nations provided about $20 billion in grants and nearly $50 billion in loans. The largest recipients of this funding are middle-income countries like India, Bangladesh, and Turkey, where fossil fuel consumption is rising — and where rich countries are investing in renewable energy projects. A much smaller share of money went to countries in sub-Saharan Africa or island states in the Pacific, which emit less carbon but suffer billions of dollars in damages from climate disasters each year, thanks to extreme weather, drought, and sea-level rise.

This lopsided aid landscape is due to the vagueness of the original Copenhagen pledge from 2009. The language of the treaty called for funding to be “new and additional,” but there was no clarity on what that meant, raising the risk that countries would reclassify existing aid to meet their obligations. Nor was there any mechanism for keeping track of who had donated what, or confirming whether a given contribution was “new and additional.” 

Furthermore, there were few guidelines about how countries should send money or what kinds of projects they should fund. The pledge said that money should “come from a wide variety of sources” and “address the needs of developing countries,” but there was almost no detail beyond that. Many countries ended up tagging donations as climate-related when they had nothing to do with addressing global warming, and a good deal of obligated money never funded climate projects at all. A Reuters investigation earlier this year found that money tagged toward the $100 billion goal had helped open a new coal plant in Bangladesh; other funds had financed the expansion of an Italian gelato chain.

“There’s a lot of mistrust that they over-report,” said Pieter Pauw, a climate finance expert at the German Institute of Development and Sustainability, a think tank focused on international development. “I’ve heard of a basketball field in the Philippines being accounted for as climate finance, and you really wonder: How?” 

The larger problem for developing countries is that rich countries have sent most of their aid through interest-bearing loans, albeit often at “concessional” interest rates that are lower than they would be on the private market. Japan, for instance, has been one of the largest contributors of climate finance to the developing world, far surpassing the United States, but almost all its donations have been loans rather than grants.

“It’s because they’re not really committed,” said Iolanda Fresnillo, a finance expert at the European Network on Debt and Development, an organization that advocates for debt relief. “If you’re not really committed, then you will choose loans, because that will have a smaller impact on your fiscal indicators. It’s an asset, it’s not a loss.” 

Poorer countries have no choice but to take these loans if they want to invest in crucial projects to protect against disasters, but many of these countries are already overwhelmed by debt, and they often have to constrain domestic spending in order to service their loans, cutting funding for infrastructure or public services. Mia Mottley, the prime minister of Barbados and a leading advocate for climate-vulnerable countries, has made the loans issue a centerpiece of her advocacy at recent United Nations talks, arguing that rich countries should provide climate money through no-strings-attached grants. 

Avinash Persaud, Mottley’s climate envoy, said that Barbados’ climate costs are roughly 100 percent of the country’s gross domestic product. “We can’t increase our debt by 100 percent,” he said. “We need every way of raising affordable finance.”

Developed countries’ reliance on loans has also resulted in a bias toward decarbonization projects rather than adaptation projects. When a rich country lends money to a poor country for a solar farm or a carbon sequestration project, it can expect that the project will generate financial returns, and that those returns will help the poor country repay the loan with interest. Private companies and lenders are also more likely to support projects that offer an investment return, allowing rich countries to mobilize more funds by blending public and private money. Even though an adaptation project such as a sea wall or a reservoir can help avoid economic damages from future disasters, the avoided damages don’t translate into a financial return for the borrowing country. 

“If you look at the number of climate-related disasters we’ve been experiencing in our countries, it’s basically due to the inadequate resources we have to respond to the effects of climate change,” said Camara. “We’ve over and over been saying that adaptation is a key priority, and what we’ve ended up believing is that adaptation is not profitable.”

Regardless of how close countries have come to meeting their commitments from 2009, the $100 billion pledge is nearing the end of its life. Back in 2018, before wealthy countries had even come close to meeting the Copenhagen promise, international negotiators agreed to start drafting a new goal that would funnel even more money to decarbonization and disaster response. 

This revised goal, which negotiators need to finalize by next year’s United Nations conference, will likely set a much higher target for annual funding. In the years since Copenhagen, scientists have gotten much better at estimating future costs of climate-related losses, and most experts now believe that annual financing needs should be measured in the trillions rather than the billions of dollars.

But just raising the target number on this “new collective quantified goal” (the United Nations’ terminology) may not be enough to ensure funding reaches those who need it. Developing countries and climate advocates are calling for a more structured commitment that would fix the vagueness of the Copenhagen pledge. This new goal would mandate that developed countries provide some portion of their funding through grants rather than loans, and would also set a minimum amount of funding for adaptation projects, which aren’t as attractive for lenders. 

“There’s a push to provide more money than was provided in the past,” said Jan Kowalzig, a researcher at Oxfam who follows climate finance. “The amount depends on how you design it. We are arguing that there should be a sub-goal on adaptation, that would be about grant money only, but developed countries are very unlikely to accept that.”

Developed countries have countered that they shouldn’t be the only ones sending money. The Copenhagen pledge applied only to the wealthiest and most developed countries, most notably the United States and the European Union, and it omitted fast-developing and high-emitting countries such as China and India, as well as petrostates like Saudi Arabia and the United Arab Emirates. The U.S. and other wealthy contributors are now pushing to include more countries in the donor pool, arguing that they have both the means and the moral responsibility to contribute, given the emissions increases that come as countries industrialize.

These same questions are also looming over parallel talks over a separate “loss and damage” fund to compensate countries for losses incurred due to climate change, which is the other main focus of COP28. This fund, which negotiators agreed to create at last year’s climate conference in Sharm el-Sheikh, Egypt, would offer compensation and rebuilding aid for unavoidable climate damages, rather than aid to help prepare for future disasters or ditch fossil fuels. 

Here, too, developing countries are seeking strong financial guarantees from wealthy countries, and these states in turn are advocating for loans and other financial instruments rather than direct grants. The less money countries receive for adaptation funding to prevent future disasters, the more loss and damage funding they will need to recover from those disasters.  

It remains to be seen how both sets of negotiations will shake out at COP28, but negotiators and outside observers say that developed countries are entering the conference with less leverage than ever. As Pauw sees it, wealthy nations’ failure to make good on their Copenhagen promise has all but ensured that they will end up paying enormous amounts of money in future years as climate impacts worsen.

“I think failure backfires on developed countries,” said Pauw, of the German Development Institute. “It gives developing countries a lot of ammunition to demand more.”

Naveena Sadasivam contributed reporting to this story.