…Pressure builds on emerging markets
A new United Nations Environment Programme (UNEP) report has warned that the global economy remains off track to meet the Paris Agreement goals, as insufficient investment and weak climate pledges push the planet toward a projected 2.3°C to 2.5°C of warming.
The Emissions Gap Report 2025, released ahead of the COP30 Leaders’ Summit in Belém, Brazil, calls for an immediate, systemic shift in climate finance and energy investment, particularly in emerging markets, which face the dual challenge of economic development and decarbonisation.
Despite marginal improvements in national pledges, UNEP’s analysis shows that global emissions are still rising and that the existing financial commitments from developed economies fall far short of what is needed to align with the 1.5°C target. The world, it says, is currently investing only one-third of the annual $4.5 trillion required to transition to a low-carbon global economy.
“The current trajectory would leave the world facing economic losses of up to $23 trillion by mid-century,” the report warns, adding that high-emitting countries and the financial sector must act decisively to close the gap.
Climate finance failure threatens global economic stability
The report’s findings come as international policymakers prepare for the Leaders’ Summit in Belém this week, a key prelude to next year’s COP30 negotiations. It identifies a widening divide between industrialised and developing economies over how to finance the global energy transition.
Africa and other emerging regions, where the effects of climate change are most pronounced, remain severely underfunded. According to UNEP, the continent receives less than 5 per cent of global renewable energy investment, despite accounting for nearly 20 per cent of the world’s population.
“This report confirms what millions already feel in their daily lives as governments are still failing to deliver on their promises. The window to keep 1.5°C within reach is closing fast. COP30 must be a turning point, where leaders phase out fossil fuels and scale up renewables in a fast, fair, and equitable way,” said Savio Carvalho, head of regions at global climate group 350.org.
Carvalho added that without an increase in concessional financing and private investment, the global South risks being left behind in the clean energy transition, with potentially destabilising economic consequences.
High emitters under scrutiny
The UNEP report places renewed pressure on high-income economies and multilateral lenders to bridge what it calls the “implementation deficit” in climate finance. The long-promised $100 billion annual funding pledge to developing countries, first made at COP15 in Copenhagen in 2009, remains only partially delivered.
Meanwhile, fossil fuel subsidies hit a record $1.3 trillion globally last year, according to the International Energy Agency (IEA), a figure that dwarfs public spending on clean energy.
Economists say the imbalance highlights an urgent need for financial system reform, including changes to the mandates of institutions such as the IMF and World Bank to prioritise climate resilience and transition finance.
“Without support for the Global South, any talk of a just transition is meaningless. Courage and cooperation, not delay and denial, must define the next phase of climate diplomacy,” Carvalho noted.
The stakes are seen to be high for Africa. The continent loses up to 15 per cent of its GDP annually to climate-related impacts, from droughts and floods to crop failures and infrastructure damage. Yet the region also represents one of the most significant investment opportunities in the global transition, given its vast potential in solar, wind, and green hydrogen.
Countries such as Nigeria, Kenya, Morocco, and South Africa are pushing to attract private capital into renewables and climate adaptation projects. However, currency risks, high interest rates, and limited access to affordable finance continue to constrain progress.
At the same time, new climate finance instruments including blended finance vehicles, green bonds, and carbon markets, are emerging as critical tools to mobilise capital. Experts say initiatives such as the African Development Bank’s (AfDB) Sustainable Energy Fund for Africa and Nigeria’s proposed carbon trading framework could help bridge part of the funding gap.
But UNEP warns that such efforts will not be sufficient without a major reallocation of global capital flows away from fossil fuels. The report calls for phasing out coal, oil, and gas subsidies by 2030, while redirecting investment toward renewable energy, energy efficiency, and green infrastructure.
The Belém summit will take place against a backdrop of slowing global growth, rising debt burdens, and geopolitical uncertainty; factors that have complicated the climate agenda. Yet, for many policymakers, the transition now represents not only an environmental imperative but also an economic one.
According to the International Renewable Energy Agency (IRENA), the global clean energy market could generate 85 million new jobs by 2030, offsetting those lost in the fossil fuel sector. For emerging markets, this shift could open pathways to industrial diversification, technology transfer, and green manufacturing.
However, UNEP warns that time is running out. Even under the most optimistic scenario, the report projects that current global pledges would still lead to a temperature rise far above the 1.5°C threshold, intensifying droughts, floods, and heatwaves.
Jacynta Fa’amau, 350.org’s Pacific Campaigner, said: “Our islands are already facing devastating impacts. We cannot accept being on course for 2.5°C as the new normal. Every fraction of a degree counts for the survival of the Pacific.”
The Amazon and the moral case for action
The choice of Belém as the host city is symbolically potent. The Amazon rainforest, long described as the “lungs of the planet”, is seen to be nearing a tipping point, where continued deforestation could turn it from a carbon sink into a carbon source.
Ilan Zugman, Latin America managing director at 350.org, said that Indigenous and civil society leadership must be central to climate negotiations. “In the Amazon and beyond, Indigenous peoples are protecting the ecosystems that keep our planet alive. Their leadership must be at the heart of decision-making in Belém,” he said.
Analysts say that protecting nature-based carbon sinks, including forests and wetlands, must go hand in hand with decarbonising energy systems. Yet funding for conservation remains modest, representing less than 3 per cent of global climate finance.
Investors seek policy clarity
Global investors, meanwhile, are watching closely for signals of stronger policy commitments. The lack of regulatory certainty, particularly around carbon pricing and climate disclosure standards, continues to deter private capital in developing markets.
As leaders converge in Belém, markets will be looking for evidence that climate ambition can translate into policy certainty and investable frameworks.
The UNEP report leaves little room for doubt: without decisive financial and policy intervention, the world risks not only ecological collapse but also long-term economic instability.
As it stands, the question for emerging markets and extensively, for the global financial system, is whether COP30 will deliver the capital, cooperation, and credibility needed to keep 1.5°C within reach.
