CPI: Climate Finance in Latin America Doubled to $108B in 2024, But Gaps Remain

# Background

# What the numbers show

Despite this progress, the region remains heavily exposed to fossil-fuel capital. CPI reports roughly $95 billion flowed into fossil fuels in 2024. By comparison, climate finance aimed at energy systems totaled about $43 billion. Redirecting some fossil-fuel investment toward low-carbon projects is presented as a necessary complement to mobilizing new money.

# Sectoral shortfalls CPI identifies major financing shortfalls in sectors central to decarbonization:

• Industry receives roughly 26 times less climate finance than estimated mitigation needs through 2030.
• Transport receives about 25 times less.
• Agriculture, forestry and other land use receive over seven times less, and excluding Brazil the gap rises to 125 times. That sector accounts for 54% of regional greenhouse gas emissions.

Adaptation remains a clear weakness: it accounted for only 11% of tracked climate finance in 2023–2024, reaching about $12.5 billion in 2024. Mitigation finance was about $85 billion in 2024 and has more than doubled since 2020, while adaptation increased by 56% over the same period. The imbalance leaves infrastructure, agriculture and energy systems increasingly exposed to physical climate risks.

# Domestic capital and private participation

Private capital tends to concentrate in more mature markets. Outside Brazil, Mexico and Chile, public actors funded between 60% and 84% of climate finance in 2023–2024, indicating limited private-sector penetration in many countries.

# What CPI recommends CPI frames the challenge as more than raising new capital: governments and financial institutions must redirect existing capital flows to low-carbon and climate-resilient investment. Barriers cited include high capital costs, political and macroeconomic volatility, fragmented regulation and weak project pipelines. CPI calls for reducing those barriers and better connecting finance with bankable projects to mobilize funding at scale.

# Economic case CPI estimates the climate transition could generate more than $15 trillion in economic co-benefits through 2050, equivalent to about $577 billion annually. That annual figure is more than five times the climate finance CPI tracked in 2024, underscoring the size of the financing gap relative to potential economic gains.

# Short takeaway The region has accelerated climate finance and a strong renewable base, but persistent sectoral gaps, limited adaptation funding, and continued large fossil-fuel investments mean redirecting and scaling finance is necessary to close the transition gap.