From COP31 to COP32 — climate talks cannot ignore the development crisis

The negotiations at the United Nations Climate Change Conference (COP31) in Antalya, Turkey, expose a fundamental contradiction in international climate policy. Developing countries are being asked to accelerate decarbonisation within a global economic system that systematically disadvantages them in accessing finance, technology and productive opportunities.

This is not simply a dispute about climate finance. It reflects a deeper tension between the environmental imperatives of decarbonisation and the economic structures through which development takes place.

The withdrawal of the US from the Paris Agreement makes these tensions particularly acute. Historically the largest contributor to cumulative carbon emissions, the US has withdrawn from the international framework designed to address their consequences. Although American state and local leaders remain engaged, the federal government’s absence raises fundamental questions about historical responsibility and international burden-sharing.

COP31 president Murat Kurum acknowledged these inequalities at the opening of the conference, declaring that narrowing the divides in access to finance and technology is one of climate diplomacy’s greatest responsibilities.

Yet the negotiations demonstrate how difficult it remains to translate this recognition into substantive commitments. Four issues illustrate the underlying global development tensions of the climate transition.

First: Climate finance is fundamentally a question of distributive justice

The principle of common but differentiated responsibilities has been central to international climate negotiations since the 1992 UN Framework Convention on Climate Change. It recognises that countries have contributed unequally to the climate crisis and possess vastly different capacities to respond.

This principle is reflected in article 9.1 of the Paris Agreement, which obliges developed countries to provide financial resources to developing countries.

At COP31, the G77 and China, including South Africa, have insisted that this obligation remain central to the Climate Finance Work Programme. European governments favour a broader approach, emphasising private investment, multilateral development banks and contributions from a wider range of countries.

European Commission president Ursula von der Leyen has defended Europe’s position: “We are mobilising climate finance so everyone can reap the benefits of the clean energy transition.”

To be fair, Europe has made substantial contributions. The EU and its member states reported €32.3-billion in public climate finance in 2025, alongside €9.3-billion in mobilised private finance. There are, however, serious questions about how much of this finance actually gets to the developing countries.

And, there is an important conceptual distinction between providing public finance and mobilising private investment. The former represents a transfer of resources reflecting differentiated responsibilities. The latter depends on expected financial returns and may do little for countries or activities that cannot attract commercial capital.

There is also a question of additionality. Reclassifying existing development assistance as climate finance risks displacing expenditure on healthcare, education and poverty reduction. Climate change imposes additional costs, which require additional resources.

The underlying disagreement is therefore not simply about the volume of finance, but about the allocation of responsibility, risks and costs.

Second: The international financial system shapes the geography of decarbonisation

The economics of renewable energy illustrate a profound structural inequality.

The sun shines abundantly across Africa, yet the cost of financing a solar installation in many African countries is considerably higher than in Europe. The technology is essentially identical. What differs is the cost of capital, exchange-rate risk and the financial conditions confronting developing economies.

These differences are not incidental. They influence where investment takes place, who owns productive assets and which countries capture the economic benefits of technological change.

UN climate chief Simon Stiell recognised this problem at COP31, warning that developing countries face a cycle of debt, climate disasters and high borrowing costs. “Climate finance must help countries break free,” he argued.

This requires moving beyond the conventional emphasis on increasing aggregate investment flows. The terms on which capital is made available are equally important.

Reforming multilateral development banks, expanding concessional finance, reducing currency risks and strengthening domestic development finance institutions are therefore central to climate policy.

Adaptation makes the limitations of market-based approaches especially apparent. Investments in public health, water infrastructure and climate resilience generate substantial social returns but frequently insufficient private financial returns.

The dispute over adaptation finance, including demands for grants rather than debt-creating loans, reflects this fundamental distinction between social value and commercial profitability.

It also raises questions about what conventional economic accounting fails to recognise. Climate shocks intensify unpaid care responsibilities, disrupt employment and informal livelihoods and place additional burdens on households, particularly women. These costs rarely feature adequately in assessments of climate investment needs, yet they are central to economic and social reproduction.

Third: A just transition is a problem of structural transformation

The concept of a just transition is frequently reduced to compensating workers and communities affected by the closure of fossil fuel industries.

But for developing economies the challenge is considerably broader. Decarbonisation must take place alongside efforts to transform productive structures, raise productivity, create employment and address entrenched inequalities.

At COP31, developing countries, including South Africa, have pressed for a just transition mechanism capable of providing finance, technology transfer and institutional support. South Africa has proposed a dedicated financing facility, while the EU and Japan have questioned the need for additional institutional arrangements.

These differences are consequential.

For South Africa, replacing coal-fired electricity with renewable energy is necessary, but insufficient. The transition must also address unemployment, industrial development and the distribution of economic opportunities.

This raises questions about industrial policy, public investment and the ownership of emerging energy systems. Renewable energy offers opportunities for more decentralised production, but decentralisation does not automatically produce more equitable ownership or control.

Without deliberate public policy, the transition may change the technological foundations of energy production while leaving existing concentrations of economic power largely intact.

Fourth: Green industrialisation may reproduce the international division of labour

The EU wants stronger implementation of the commitment made at COP28 in Dubai to transition away from fossil fuels in energy systems. That agreement was historic, but it explicitly recognised that the transition must be just and equitable and reflect different national circumstances.

The disagreement at COP31 is therefore not simply about whether to reduce fossil fuel dependence, but how quickly different countries should do so, and what financial and technological support developing economies should receive.

Small island states are understandably demanding greater ambition, while some developing-country groups are concerned that sectoral targets and unilateral trade measures could constrain their development prospects.

These tensions extend beyond emissions reductions to the organisation of global production.

Africa possesses substantial renewable energy resources and many of the critical minerals required for clean technologies. Yet the historical experience of commodity-dependent economies suggests that resource endowments do not automatically translate into industrial development.

Without effective industrial policies, technological capabilities and access to affordable finance, African economies risk remaining exporters of raw materials and importers of higher-value technologies.

The transition could therefore reproduce familiar patterns of unequal exchange and technological dependence, even as the global energy system becomes cleaner.

From Antalya to Addis Ababa

There is particular significance in the fact that the next COP, COP32, will take place in Addis Ababa, Ethiopia, in 2027. This offers an opportunity to place the relationship between climate action and economic development more firmly at the centre of international cooperation.

African governments have identified adaptation finance, energy access, green industrialisation and employment as priorities linking the negotiations in Antalya to those in Addis Ababa.

But the significance of an African COP should extend beyond geography and representation. It should provide an opportunity to reconsider the international financial and institutional arrangements through which decarbonisation is being pursued.

The central question is whether developing economies can move beyond being recipients of climate technologies and finance to becoming producers, innovators and owners of the emerging green economy.

COP31 should therefore be judged not only by the agreements reached in Antalya, but by whether it establishes the conditions for a more equitable development agenda in Addis Ababa.

A successful climate transition must do more than change how energy is produced. It must also transform the unequal economic relationships through which energy, technology and wealth are produced and distributed. DM