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A global climate conference in Santa Marta, Colombia, put financial obstacles at the center of discussions on how to accelerate the transition away from oil, gas and coal. Organizers said the meeting is aimed at helping governments move beyond pledges and begin outlining how to phase out fossil fuels—pressures that are growing as countries face mounting scrutiny to turn climate commitments into practical plans.
Officials and experts at the conference said financing shortages remain a key constraint. They pointed to the scale of investment required for the transition, including new infrastructure such as power grids and storage, as governments work to replace existing oil and gas systems that still underpin many national economies. In developing countries, speakers said clean-energy projects can become more expensive to build because of limited access to financing and high borrowing costs.
Amiera Sawas, head of research and policy at the Fossil Fuel Non-Proliferation Treaty Initiative, said many countries and regional governments are not opposed to shifting away from fossil fuels but are constrained by debt, limited fiscal space and the cost of capital. “They aren’t wedded ideologically to fossil fuels,” Sawas said, adding that “They can access financing for fossil fuels more easily.”
The conference also addressed how the global financial system can lock in fossil-fuel dependence. Speakers said borrowing costs for renewable energy can be several times higher in some developing regions than in wealthier economies—citing an average about 15% in parts of Africa versus roughly 2% in Europe and North America. That dynamic, experts said, can help create what researchers describe as a “debt–fossil fuel trap,” where countries rely on oil and gas income to service debt and keep energy access stable.
Some officials at the conference described using fossil-fuel revenues to finance parts of the shift. In Brazil’s Espírito Santo state, officials said money earned from oil and gas production is being used to help pay for the transition to cleaner energy, including projects that reduce emissions and attract private investors. Officials also cited a new fund intended to attract private investment into emissions-reduction projects, as an example of how some governments are using fossil fuel revenues to fund parts of the transition away from them.
Speakers cautioned that the approach has limits. They said fossil fuel revenues can be volatile, tied to global energy prices, and are expected to decline over time as countries reduce production and consumption. Nicolas Lippolis, founder and executive director of the Centre for Energy, Finance and Development, moderated a panel about the use of royalties for the energy transition and said, “Climate finance is a challenge all over the world, but at the subnational level, it’s even bigger.”
Wealthier regions discussed policy and market tools they say can help fill financing gaps. In the United States, California’s approach was cited as an example of how carbon markets and low-carbon fuel standards can generate investment and guide emissions reductions. Sarah Izant, deputy secretary for climate policy at the California Environmental Protection Agency, said, “We remain steadfast in our commitment to carbon neutrality by 2045,” and added that the transition brings public health and economic benefits. Izant also said California remains a “stable and reliable partner” on climate action and pointed to coalitions of U.S. states continuing emissions cuts even as federal policy at times moves away from international climate commitments and fossil-fuel regulations.
Speakers in Santa Marta also described challenges that come with closing fossil-fuel infrastructure. California’s transition, Izant said, includes disruptions in fuel supply as refineries close and a need to supplement with imports in the short term. But the conference also included criticism of some finance mechanisms: Indigenous groups released a declaration Monday evening saying efforts to phase out oil, gas and coal must not rely on carbon markets or offset schemes, arguing such approaches fail to address the root causes of climate change.
The conference’s participants also contrasted the pace of action across regions. The organizers said the Trump administration was not among those invited to the Santa Marta meeting, which they described as focused on governments seeking to accelerate a transition away from fossil fuels. In Canada, Quebec was highlighted for a more direct approach: the province passed a law to halt new fossil fuel exploration and production altogether. “We decided, with a consensus, to say no to fossil fuel in Quebec,” said Jean Lemire, the province’s climate envoy, while acknowledging pressure over costs and energy policy.
Lemire warned that efforts to coordinate the transition remain slow at the international level. “Right now, at the U.N., we will not make big advancement on anything … because we are under the rule of consensus,” Lemire said, describing a system where countries must all agree before decisions are adopted. He warned that the inertia at the U.N. is leaving momentum to build through other avenues.
Outside formal U.N. talks, organizers said some countries are trying to maintain momentum through smaller gatherings. Tuvalu, a low-lying Pacific island nation vulnerable to rising sea levels, announced at a side event during the conference that it will host the next meeting. Dr. Maina Vakafua Talia, Tuvalu’s minister of home affairs, environment and climate change, said, “Tuvalu is not waiting for the rest of the world to act, we are leading the way,” and described the initiative as “a matter of survival.”
Speakers said the discussion in Santa Marta reflects a broader shift in how the energy transition is framed—from primarily a technological challenge to a largely economic one, focused on mobilizing investment and reshaping economies long dependent on fossil fuels. However, participants said the core financing problem remains unresolved, with Lemire saying, “There’s a lot of money for war,” and adding that “there’s one common enemy — climate change — and we don’t find that money.”