Key messages

• The funding and distribution of climate finance are predominantly controlled by the Global North and powerful entities less affected by climate change. Thus far, the existing climate finance mechanisms have been unsuccessful in raising sufficient funds and distributing the funds to those that need it the most.

• Calls for “decolonizing” climate finance are gaining traction in order to embed the Global South, Indigenous Peoples and marginalized communities in decision-making around climate finance, including: who contributes towards climate finance; the instruments used to distribute climate finance; who receives the funds; how it is accessed; and the projects and initiatives it goes towards.

• The Bridgetown Initiative proposes a set of reforms targeting the international financial architecture – particularly the World Bank, the International Monetary Fund and multilateral development banks –to make them more fit-for-purpose through reducing the debt crisis in Global South countries and enabling them to better respond to the climate crisis.

• Despite being led by Global South priorities, the Bridgetown Initiative has been criticized for not including sufficient measures for debt cancellation or scaling up grants-based finance, placing too much emphasis on the private sector for providing climate finance and ignoring both the role of public climate funds and the need for climate finance to adhere to principles of historical responsibility.

• In addition to existing proposed reforms, measures such as debt cancellation, scaling up grants-based public finance, implementing tax and trade reforms, and channelling increased finance to the local level are needed to tackle the coloniality of the international financial architecture.