Hurricane Melissa Highlights Inadequacies in Global Climate Finance

As Hurricane Melissa unleashed its fury across the Caribbean in October 2025, its path of devastation was unmistakable. This Category 5 hurricane left significant damage in its wake, impacting Jamaica, Haiti, and Cuba, disrupting power lines, and isolating entire communities from essential services such as hospitals and aid.

The economic impact on Jamaica was particularly severe, with the storm causing damage estimated between US$6 billion to $7 billion. This figure accounts for roughly 30% of the country’s gross domestic product, compounding the challenges faced by industries such as tourism, fishing, and agriculture, which were already recovering from a previous disaster, Hurricane Beryl.

Recovery from such massive destruction and the ability to adapt to future climate threats without incurring crippling debt is a daunting task for Caribbean nations. Much of this burden hinges on the international commitment to climate finance.

Developed nations, which have historically contributed to climate change through the burning of fossil fuels, have pledged substantial annual financial support to vulnerable countries like Jamaica, Cuba, and the Philippines. This funding aims to aid these nations in adapting to the increasing threats of climate change and in rebuilding after disasters that are exacerbated by these environmental changes.

In 2024, a commitment was made to increase climate finance from $100 billion a year to at least $300 billion annually by 2035, with aspirations to reach $1.3 trillion through a broad range of public and private contributions.

Nevertheless, questions arise as to why developing nations continue to grapple with recovery costs despite the influx of billions in climate finance.

Researchers in global environmental and climate politics, including those studying United Nations climate negotiations, have been tracking the flow of climate finance. The discussions at the U.N. climate conference in Brazil focus on strategies to achieve the ambitious $1.3 trillion target by 2035 and to streamline access to these funds for developing countries.

Challenges in Climate Finance Accountability

Since 2009, wealthy nations have pledged to raise $100 billion annually for climate finance by 2020. However, debates persist regarding whether this target was genuinely met in 2022. Reports indicate that some figures were inflated, primarily due to the reclassification of existing aid as “climate aid.”

For instance, the United Kingdom has claimed progress towards its £11.6 billion commitment by rebranding existing aid as climate finance, a practice that conflicts with the principle of additionality, which dictates that climate finance should supplement, not replace, traditional aid.

Analysis by Carbon Brief suggests the U.K. would need to increase its contributions by 78% to meet its target genuinely.

Similar practices are seen globally. The Center for Global Development estimates that a significant portion of new climate funds in 2022 originated from existing aid budgets, with projects often relabeled as climate finance without substantive changes.

Scrutinizing Project Impact

Examining specific projects reveals the complexity of classifying climate finance. In 2020, Japan’s state-backed financial institution funded a coal plant in Vietnam under an environmental initiative, despite the plant’s potential for high emissions.

Other projects, such as airport expansions in Egypt and Papua New Guinea labeled as climate finance, have raised concerns about their actual impact on emissions reduction.

Further complicating matters, some projects increase emissions, such as the airport expansion in Papua New Guinea, expected to boost emissions by 90% if passenger targets are met.

Additionally, unusual projects have been labeled as climate finance, including Italy’s funding of a chocolate and ice cream company’s expansion and a U.S. hotel development in Haiti, raising questions about the genuine impact of these investments.

With reports indicating billions of dollars in climate finance allocated to questionable projects, the need for a clear and agreed-upon definition of climate finance is more pressing than ever. The objective is to ensure that funds are directed towards genuinely mitigating and adapting to climate change, rather than being mired in misclassification or profit-driven lending.

University of Southern California environmental science students Nickole Aguilar Cortes and Brandon Kim contributed to this article.