Climate Finance in a Multipolar Era: What’s Changing

Geopolitics, energy security, and climate damages are reshaping how climate finance is planned and deployed, moving away from consensus targets toward fast, security-driven investments.

Climate finance is entering a new phase, and it looks less like a slow-moving global agreement process and more like a scramble to manage risk in a fractured world.

As conflict continues in the Middle East, geopolitical power shifts accelerate, and U.S.. policy changes reverberate through global forums. climate funding is being pulled in directions shaped by energy security and mounting climate impacts rather than multilateral consensus alone.. The argument is that the forces governing capital are changing faster than the institutions designed to coordinate it.

The report points to a deeper break in the policy architecture underpinning international climate cooperation.. It notes that the U.S.. withdrawal from the Paris Agreement. alongside wider shifts in international institutions and the role of the Sustainable Development Goals (SDG) agenda. signals a move away from shared rules that had helped organize climate finance and policy.. In Davos earlier this year. Canadian Prime Minister Mark Carney described the situation as a “rupture” in the rules-based order. and the piece frames this as the start of a more fragmented landscape for the UN-centered climate finance regime.

In this environment, the article says a coherent new system is unlikely to appear quickly.. It cites Gordon LaForge’s view that the emerging order may be defined by “connectivity without hegemony. ” in which state and non-state actors align fluidly around specific issues.. For collective action problems such as trade. public health. and climate change. the report suggests this could even lead to faster movement in some areas. even if the process becomes messier.

For climate finance. that shift could mean less dependence on broad consensus forums such as the UNFCCC regime and more reliance on “coalitions of willing partners” operating where security and economic interests overlap.. The First Conference on Transitioning Away from Fossil Fuels in Santa Marta. Colombia—drawing ministers from nearly 60 countries but excluding China. India. Russia. Saudi Arabia. and the United States—stands as an example of both the promise and limits of coalition-building under today’s geopolitical constraints.

Energy security is also rising sharply as a lens for climate-related investment decisions.. The piece highlights the Strait of Hormuz as emblematic of the new type of risk. with the International Energy Agency’s Executive Director Fatih Birol calling it “the greatest energy security threat in history.” It also notes scenario work from Goldman Sachs describing the possibility of prolonged disruptions and “scarring” to long-run supply. implying that governments may treat fuel access and infrastructure stability as priorities that sit alongside—or even ahead of—climate ambition.

In practical terms. the report says energy policy will increasingly be framed through secure access to fuels. critical minerals. suppliers. and trade routes.. Instead of evaluating climate investments primarily by emissions reduction goals or Nationally Determined Contributions (NDCs). governments are expected to view emissions cuts more as co-benefits that emerge from projects designed first to protect continuity of supply.

The piece then connects that security-first framing to a rapid technological shift that is already changing the economics of power in vulnerable countries.. It points to “electrotech”—especially solar. storage. and electric end-use technologies—and argues that steep cost declines are reshaping investment incentives in low-income. climate-vulnerable regions.. It cites an observed pattern in which. in eight of 10 climate-vulnerable countries. cumulative solar imports since 2017 are at least three times higher than official installed capacity. and it predicts that the trend will accelerate as renewables continue to outcompete fossil alternatives that are portrayed as more expensive. volatile. and less secure.

The report also describes the emergence of technology-aligned blocs.. It says Nils Gilbert sees two broad coalitions forming: a “Green Entente” led by China and an “electrostate” bloc built around solar. batteries. and mineral supply chains; alongside an “Axis of Petrostates” centered on the United States under Trump. Russia. and the Gulf monarchies.. In this view. countries’ technology and infrastructure choices will increasingly align them with one side or the other. shaping the direction of climate finance flows.

Beyond where money goes. the piece argues that how climate finance is delivered is falling behind real-world needs—especially for adaptation.. It cites BloombergNEF estimates that adaptation will require “hundreds of billions—and possibly trillions—of dollars. ” while current spending is around USD 65 billion per year.. It also notes that delays in delivering the USD 100 billion goal have worsened mistrust. contributing to pressure for funding that is faster and more reliable. even if it comes on less concessional terms.

At the heart of the argument is a call for a change in financial engineering.. The report says “climate finance as we know it” has reached the end of its usefulness and that the priority should be an execution-oriented model—described as “transactions to transitions”—that turns plans into investable pipelines.. Rather than emphasizing compliance-driven workflows, it argues for shifting toward risk-management-driven investment that can move from strategy to deployment.

The piece also underscores a more prominent role for defense and security institutions in evaluating climate-related investments.. It says finance. planning. and defense ministries will increasingly assess climate investments based on how they reduce strategic vulnerabilities. including securing water. protecting food systems. and ensuring energy supply and grid stability.. In this framework. NDCs are portrayed as sitting beneath broader national strategies for water. food. and energy security. with emissions trajectories becoming derivative outcomes rather than binding constraints.

Technology choices are portrayed not only as engineering decisions but as geopolitical signals—particularly in sectors like power. transport. and digital infrastructure.. The report highlights the role of AI. arguing that it can reduce the cost and time needed to model scenarios and optimize renewable energy systems.. At the same time. it notes that data center build-outs drive massive electricity demand. and whether that demand pushes emissions up or down will depend on whether it is met with fossil generation or with accelerated deployment of renewables and storage.

Security timelines are another driving factor in the shift from long-horizon planning to faster implementation.. The report argues that governments confronting imminent water scarcity. harvest failures. or grid instability cannot wait for the next COP or for complex capital-blending structures.. Instead, it says they need financing in weeks or months, not years, and therefore prioritize speed, reliability, and control.

It describes a set of solutions that can address multiple risks at once—examples include solar-powered irrigation. grid-connected cold chains. and desalination backed by renewables.. The central idea is that in a high-risk environment. projects that simultaneously improve resilience and protect critical systems are more likely to win political and financial support.

The article then lays out how mounting climate impacts could redirect investment toward new priorities.. It anticipates that. as climate threats become more immediate—including the prospect of El Niño—climate-aligned investment is likely to grow in ways tied to resilience needs rather than purely decarbonization targets.

In electricity planning, the report says utility operators will treat power systems as resilience infrastructure.. Grid expansion. reliability. and flexibility—especially through storage and demand response—are described as core resilience assets. particularly in places where countries depend heavily on imported primary energy.

In transport, the piece argues that electrification can create strategic lock-in. It says EV ecosystem choices—charging infrastructure, grid upgrades, local assembly, and fiscal measures—will shape industrial bases, supply chains, and geopolitical alignment, not only emissions outcomes.

Food and water security, meanwhile, is framed as a national security issue with political consequences.. The report argues that climate impacts on water and food are central to political stability. yet agrifood systems still receive a small share of climate finance.. Under a security-driven lens, it suggests investment would need to scale up for resilience and for supply chain diversification.

Overall. the report’s conclusion is that climate finance in the multipolar era will be driven less by collective targets and more by the need to manage geopolitical security risks in an increasingly unstable world.. The crucial question it raises is whether a fragmented financing system can still “bend” investment toward decarbonization—needed to prevent further climate breakdown—rather than simply entrench vulnerability.

Misryoum

This piece was originally published on CCSI Investment Perspectives as a guest column by the Columbia Center on Sustainable Investment. part of a series of short think pieces exploring global investment challenges across law. policy. economic. finance. and technology.. The views and opinions expressed in the column are those of the authors and do not necessarily reflect the official position of the Columbia Climate School. Earth Institute. or Columbia University.

climate finance multipolar world energy security adaptation funding renewables storage AI in energy planning EV electrification