ABSTRACT
This article examines the current status of climate finance and green finance, focusing on their barriers, equity issues, and effectiveness through an extensive review of scholarly literature indexed in the Science Direct database. Studies published between 2009 and 2024 were analyzed using the keywords ‘climate finance’ and ‘green finance.’ The 1.5°C target aims to keep the rise in global temperature below 1.5°C above pre-industrial levels by the end of this century to prevent serious climate disasters. Earlier, a 2°C target was considered acceptable, but small island nations opposed it, warning that even this level of warming threatened their survival through rising sea levels and extreme weather. To achieve the 1.5°C goal, developed countries under the Paris Agreement pledged to mobilize USD 100 billion annually by 2020 to help developing nations mitigate emissions and adapt to climate impacts, though this promise remains largely unmet. The review reveals that complex governance systems, limited private sector engagement, and restrictive funding mechanisms have reduced the effectiveness of climate finance. It emphasizes the need for locally driven approaches that integrate community participation, with civil society playing a key role in ensuring equitable fund distribution. Despite efforts to scale up financing, significant gaps remain in directing resources toward the most vulnerable populations. The study concludes that enhancing transparency, governance reforms, and public–private collaboration is essential to strengthen the efficiency and equity of climate finance, thereby supporting global goals of sustainable development and inclusive climate resilience
AUTHOR AFFILIATIONS
Department of Economics, Babasaheb Bhimrao Ambedkar University, Lucknow, India
CITATION
Gouhar R and Nayak S (2025) Systematic Literature Review on Climate Finance Global Trends, Challenges and Future Directions. Environmental Science Archives 4(2): 818-839.
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