The climate crisis is not just an environmental problem; above all, it is a political and economic one. Confronting it requires redefining how development is produced, consumed, and, above all, financed on a global scale. The discussion on climate finance cannot be reduced to technical instruments or voluntary promises of “green” investment; it must be embedded in a broader agenda of wealth redistribution, capable of correcting historical inequalities and of acknowledging that those who contributed most to environmental degradation are also those who concentrate the greatest economic capacity to reverse it.
Recently, the international debate has recognized—at least at the discursive level—that the transition to low-carbon economies requires unprecedented volumes of financing. However, the gap between what is needed and what is actually mobilized remains enormous, especially for countries in the Global South, which face the most severe impacts of climate change with fewer fiscal resources, high levels of indebtedness, and limited political room for maneuver. The central question is no longer whether more financing is needed, but who pays, how it is paid, and according to what criteria of justice.
The climate crisis as a systemic risk
Mainstream thinking among global economic elites, expressed each year in forums such as Davos, increasingly recognizes the climate crisis as a long-term systemic risk. The World Economic Forum’s global risk surveys show that, beyond short-term concerns over geopolitical conflicts or financial tensions, extreme climate events, biodiversity loss, and ecosystem collapse rank among the top risks when projecting ten years into the future. This perception, however, does not translate into structural transformations of the very economic system that those same elites defend and reproduce.
The problem is that risks are not distributed equitably, either in their causes or in their consequences. Consumption patterns among the wealthiest sectors account for a disproportionate share of greenhouse gas emissions, while the costs of climate change fall overwhelmingly on impoverished populations, rural communities, Indigenous peoples, and peripheral countries. One inequality feeds the other: the concentration of wealth deepens the environmental crisis, and the environmental crisis reinforces existing social gaps.
The data are telling. Recent OXFAM reports, published with the Davos meetings, show that the richest 1% of the planet generated in the first 10 days of 2026 the CO₂ emissions that would correspond to them for the entire year and has accumulated 63% of the global wealth generated since 2020, while one in four people worldwide suffers from food insecurity and nearly half of the global population lives in conditions of poverty. The wealth accumulated by billionaires reaches figures that far exceed the resources needed to finance the energy transition, climate adaptation, and biodiversity protection. This is not a matter of scarcity, but of a profoundly unequal allocation of available resources.
This extreme concentration of wealth has not only distributive effects, but also political ones. Economic power translates into influence over decision-making processes, regulatory capture, and the systematic blocking of reforms that would affect corporate interests, particularly those linked to extractive industries and fossil fuels. It is no coincidence that climate denialism and delays in the energy transition find allies both in sectors of the far right and in economic actors seeking to preserve extraordinary rents.
The need for redistribution
In this context, speaking of climate finance without discussing redistribution is insufficient. Current fiscal austerity schemes, promoted as dogma by international financial institutions and adopted by numerous governments, restrict public investment precisely when it is most needed. At the same time, progressive taxes are replaced by increased indebtedness, shifting costs into the future and consolidating a financial outlook that ignores ecological limits and social demands.
The prevailing extractive model aggravates these tensions. The expansion of mining, hydrocarbons, and monocultures—presented as a fast track to obtaining foreign exchange—deepens territorial conflicts, displaces populations, degrades ecosystems, and criminalizes social protest. Few sectors have contributed as much to the twin crises of climate change and global inequality as extractive industries, which also tend to benefit from generous state subsidies and lax regulatory frameworks.
In this scenario, climate justice appears inseparable from economic justice. Financing the transition implies redefining who appropriates natural resources, who assumes environmental costs, and who benefits from growth. In this regard, the recent United Nations report on the state of nature financing is relevant, warning about the structural bias of the global financial system toward environmentally harmful activities. The magnitude of flows allocated to fossil fuel subsidies and harmful investments contrasts with the scarcity of resources directed toward productive projects in harmony with nature.
Redirecting subsidies toward the energy transition
Transforming this framework is not easy, but neither is it impossible. Redirecting subsidies that currently benefit the oil industry toward the energy transition would free up significant resources. This process must be gradual and socially just, avoiding regressive impacts on energy prices that, as experiences in France or Ecuador have shown, can trigger strong social resistance. But political difficulty cannot be an excuse for inaction.
Changes in financing also require deep regulatory reforms. Monetary and financial authorities must incorporate climate criteria into their decisions, aligning the financial system with sustainability objectives. Some countries in the region have begun to move in this direction: central banks such as those of Brazil, Colombia, Chile, or Uruguay have introduced green guidelines, and Brazil’s capital market has developed regulations requiring greater transparency on climate risks. These initiatives, still incipient, recognize that climate change is not a problem external to the economy, but a central factor of financial stability.
Not all governments share this view. In Argentina, for example, the current administration denies the existence of the climate problem, downplays biodiversity loss, and dismisses inequality as a political issue. The deepening of an extractive model oriented toward a few sectors, combined with an obsession with exchange-rate stability at any cost, shapes an enclave economy that erodes the productive and social fabric. The absence of an environmental and social agenda not only compromises the present, but mortgages the future.
Ultimately, financing the fight against the climate crisis requires far more than green funds or sustainable bonds. It demands a reconfiguration of the global economic contract, based on wealth redistribution, differentiated responsibility, and the democratization of economic decision-making. Without fiscal justice, without progressive taxation, without capital regulation, and without a drastic reduction in inequalities, the climate transition will remain an empty promise. The challenge is political: to decide whether financing is directed toward sustaining privileges or toward guaranteeing a habitable future for the majority.
Autor
Associate Researcher at the Center for the Study of State and Society - CEDES (Buenos Aires). Author of "Latin America Global Insertion, Energy Transition, and Sustainable Development", Cambridge University Press, 2020.
