The policy brief examines the evolving role of climate finance in addressing the growing economic and environmental risks associated with climate change. In recent years, climate change has moved beyond the realm of environmental policy to become a systemic challenge affecting macroeconomic stability, financial systems, and long-term development strategies. Global temperature trends and the increasing frequency of extreme weather events demonstrate that countries must accelerate both mitigation and adaptation efforts while mobilising significantly larger volumes of financial resources.
The brief highlights the widening gap between the scale of global climate ambitions and the availability of financing. Achieving climate targets in emerging and developing economies requires approximately $2.4 trillion annually by 2030, yet current financial flows remain far below this level. This shortfall creates growing competition for limited concessional and private capital and underscores the need for new mechanisms capable of mobilising larger investments from both public and private sources.
Special attention is given to Central Asia and Uzbekistan, where climate risks are intensifying despite the region’s relatively modest contribution to global greenhouse-gas emissions. Rising temperatures, increasing water scarcity, and greater variability in river flows create serious challenges for agriculture, energy systems, and economic stability. The policy brief argues that climate finance in the region remains heavily dependent on externally driven, project-based funding and is disproportionately concentrated on mitigation, while adaptation and resilience measures remain chronically underfunded.
The paper concludes by outlining key priorities for strengthening climate-finance systems in Uzbekistan and Central Asia. These include expanding private-sector participation, integrating ESG standards into financial decision-making, improving institutional capacity for developing climate-investment projects, and strengthening transparency and climate-data infrastructure. Together, these measures can transform climate finance from a narrowly defined environmental instrument into a central pillar of economic resilience and sustainable development.
* The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.
