The impacts of climate change are intensifying, and countries most vulnerable to its effects face mounting damages in the absence of robust resilience measures. By some estimates developing countries will require between US$200–300bn in adaptation investments by 2030, and at least $250bn to address losses and damages – figures expected to rise further by 2035. Some estimates put the real costs even higher.
Investing in adaptation, however, offers not only protection from future shocks but also substantial economic returns. Each dollar spent on adaptation is estimated to generate $10.5-12 in economic benefits, and results in additional jobs and GDP growth. Most of these adaptation investments will need to be financed by the public sector, as private returns are still limited outside sectors like water, sanitation and agri-food systems.
However, many developing countries lack the fiscal space to make these investments. High debt burdens, coupled with competing development priorities such as education and health, leave little room for climate spending. Many are caught in a vicious cycle: climate disasters trigger new borrowing, which deepens indebtedness and raises future borrowing costs.
Consequently, developing countries will continue to rely heavily on highly concessional international finance to finance adaptation and respond to loss and damage. With official development assistance under strain and concessional finance lagging far behind needs, innovative sources of finance are now essential to bridge the widening gap in adaptation and loss and damage funding.
Cop30 and the Baku-to-Belém roadmap
At Cop29 in Baku, countries agreed on new global climate finance targets – the new collective quantified goal (NCQG). By 2035, $1.3tn per year should flow to developing countries from all sources. Of that, at least $300bn is to be provided and mobilised by developed countries – with voluntary contributions from others and from multilateral development banks. Within this $300bn, the UNFCCC climate funds are to at least triple their outflows by 2030 compared to 2022 levels.
To clarify how to achieve this scale of finance, the Cop29 and Cop30 presidencies were tasked to prepare the Baku-to-Belém Roadmap to 1.3T. In developing the roadmap, the presidencies established a circle of finance ministers, and gathered submissions from and consulted parties. Finance ministers in their report – as well as those countries most vulnerable to the impacts of climate change, from least developed countries (LDCs) and small island developing states (SIDSs) – emphasised the potential of solidarity levies as a vital tool to mobilise concessional finance.
Accordingly, the roadmap identified solidarity levies – taxes collected nationally and earmarked for shared international goals such as climate adaptation – as a suitable action to unlock new predictable and concessional climate finance toward the $1.3tn goal.
Levies and the ‘polluter pays’ principle
The idea of solidarity levies is grounded in the “polluter pays” principle. This approach is both fair and logical. Those most responsible for climate change should also shoulder the costs of its impacts. For too long, the opposite has been true. Profits have been privatised while losses are socialised. Many of the most profitable companies have emitted freely, without paying for the damages they have generated.
With rising climate costs and tightening public budgets, this imbalance can no longer stand. With levies as the instrument of choice, contributions may be collected at the national or supranational level depending on the sector. In the case of solidarity levies, the proceeds should be directed at least in part towards adaptation measures and responding to climate-related losses and damages in developing countries.
Ultimately, it comes down to the political will to take on the most polluting sectors and individuals to make them cover at least part of the bill. The moral and economic foundation is clear. The recent legal case brought against RWE – which aimed to hold the German energy company liable for its contribution to climate change – and the advisory opinion from the International Court of Justice on governments’ climate liability provide additional tailwind for countries to implement instruments that will hold polluters accountable for their emissions and pay for the associated damages.
Shipping and aviation levies for climate finance
The first set of solidarity levies is beginning to emerge. The first supranational one, the International Maritime Organisation’s (IMO) net-zero framework, would have introduced a tax on shipping emissions but is facing delays following an unprecedented lobbying push by a few countries against adopting the measure.The framework was expected to allocate part of its revenues to support vulnerable countries, especially SIDSs and LDCs, to address disproportionately negative climate impacts and out-of-sector activities.
Meanwhile, a coalition of countries is preparing to launch a levy on private jets and premium-class flights, with an announcement expected at Cop30. This levy would be implemented domestically but coordinated internationally, with participating high-income countries committing to direct a significant share of revenues toward climate action in developing countries.
By focusing on premium flying, this coalition will target societal groups that cause the largest climate damage who also have the capacity to incur the levy’s extra costs. Therefore any potential political costs will be minimised while generating significant revenues. Ideally, the coalition would channel the proceeds through UNFCCC climate funds – both to contribute to the third quantitative NCQG goal but also to be more resilient against political shifts in individual countries.
Future opportunities
Beyond aviation and shipping, the Global Solidarity Levies Task Force has identified a range of additional potential solidarity levies, including on fossil fuel extraction, on the energy use linked to cryptocurrencies, and on plastic polymers which cause so much pollution. Some countries are also exploring taxes on ultra-high net-worth individuals, whose carbon footprint is many orders of magnitude higher than the poorest in society. Brazil, the host of COP30, is among these countries. Asking the wealthiest to contribute more for fighting climate change impacts is just logical.
Innovative mechanisms are also emerging beyond the UNFCCC sphere and can provide further inspiration. Under the Convention on Biological Diversity, parties agreed to create the Cali Fund which will receive a share of large entities’ revenues or profits across sectors benefiting from genetic resources, for example pharmaceuticals.
In the US, New York’s Climate Change Super Fund requires companies that have contributed significantly to climate change to cover some of the infrastructure costs necessary for the city to adapt to climate change. These examples offer design elements and demonstrate that sub-national actors are equally well placed to act.
It is evident that the resources to provide finance for adaptation and loss and damage are available among those that contribute the most. The mechanisms are emerging and the political momentum has never been stronger. What remains is the will to act.
By joining the premium flyers coalition, ensuring the adoption of the IMO’s net-zero framework, and advancing additional coalitions of the willing, for example on taxing the ultra rich, countries can take decisive steps towards a fairer, more sustainable system. One where polluters finally pay their share for dealing with the climate crisis they helped create and accelerate.
This page was last updated November 7, 2025
Written by
David Ryfisch is co-head of division for international climate policy at Germanwatch with focus on public and private climate finance. He has longstanding experience in the alignment of bi- and multilateral development banks with climate change issues, processes in international fora on climate change as well as transparency especially of climate finance. Before joining Germanwatch, he worked as advisor on climate finance for the Gesellschaft für Internationale Zusammenarbeit.
