Abstract

The article introduces “climate finance justice” as an emerging analytical framework examining how climate finance reproduces or challenges injustice. It reviews rapidly growing capital flows for mitigation and adaptation, largely from the Global North to the Global South, and argues that finance often concentrates power, enables dispossession, and obscures inequities. The paper situates climate finance justice within political ecology and critical geography, using the UNFCCC and voluntary carbon markets as applied cases.

Introduction

Climate justice scholarship frames climate change as a moral and political issue shaped by unequal responsibility, vulnerability, and power. Over the past three decades, justice-based approaches have questioned who benefits from climate responses and who is marginalised. As climate finance has become central to global climate policy, it is increasingly presented as a response to climate injustice. The authors argue this framing requires scrutiny, as financialised solutions may reproduce the same inequalities they claim to address.

Defining climate finance

Climate finance encompasses public, private, and alternative funding supporting mitigation and adaptation, including development funds, insurance, bonds, ecosystem service payments, and carbon markets. The concept is broad and contested, often extending to climate risk pricing and investment decision-making. Estimates place global climate finance at roughly US$630 billion annually, with only a small share reaching developing countries. The authors emphasise that climate finance frequently mirrors international development dynamics, including North–South capital flows and profit-seeking interventions, raising persistent justice concerns.

Climate justice

Climate justice emerged from environmental justice movements and Global South advocacy, grounded in principles of historical responsibility and capacity to act. Dominant approaches focus on distributive justice (who pays and who benefits) and procedural justice (how decisions are made). The paper highlights growing contributions from postcolonial, feminist, Indigenous, and urban scholarship, which challenge narrow economic framings and expand understandings of justice, knowledge, and power within climate finance.

Intersection of critical geography and climate finance

Drawing on political ecology, the authors argue that finance is central to climate governance and conflict. Climate finance can exacerbate marginalisation by prioritising market-based tools and private actors. Universal financial mechanisms often fail to address place-based injustice and accountability. The paper stresses the need for climate finance justice as a coherent field to expose how complex financial architectures obscure responsibility and reinforce elite control.

Spaces of climate finance (in)justice

The article uses two main empirical arenas—multilateral climate governance and private markets—to show where injustices emerge. Based on over 15 years of research, the authors examine how finance mechanisms are designed, who participates, and whose knowledge is prioritised. These spaces reveal tensions between justice objectives and capital accumulation.

UNFCCC

Under the UNFCCC, developed countries pledged to mobilise US$100 billion annually for climate action in developing countries, a target repeatedly unmet. Instruments such as the Green Climate Fund and the Loss and Damage Fund embed justice claims but often rely on profit-seeking finance and bureaucratic allocation. Debates over REDD+ and loss and damage highlight conflicts over compensation, eligibility, and participation. Procedural justice concerns persist, particularly regarding donor control and vulnerability-based allocation.

Voluntary carbon markets (VCMs)

VCMs have grown rapidly, valued at approximately US$1.9 billion in 2023, with projections of US$50–100 billion annually by 2030. They underpin many corporate net-zero commitments but are criticised for delaying emissions reductions and commodifying nature. The paper shows how carbon offset schemes can marginalise communities, concentrate benefits among intermediaries, and fail to address root causes of climate change, despite new integrity initiatives.

Pathways forward for climate finance justice

The authors argue climate finance is an inherently contradictory response to a crisis driven by capitalism and uneven development. Applying a critical political ecology lens, they call for finance approaches that centre frontline communities, value local knowledge, and prioritise procedural and recognitional justice. More just climate finance requires shifting power away from elite institutions towards community-driven decision-making and rethinking finance as a tool for repair rather than accumulation.