SYSTEMIC ANALYSIS OF CLIMATE FINANCING PROBLEMS
Abstract
This article presents a systemic analysis of the fundamental causes and mechanisms underlying the persistent underfinancing of climate action despite international awareness and commitments. Identification and systematization of the mentioned causes and mechanisms constitute the aim of the article. The research methodology is based on systemic analysis, structural-logical modeling, and interdisciplinary synthesis. The study identifies two key categories of systemic barriers to the efficient climate action and climate financing: structural discrepancies between individual and collective interests, and temporal conflicts between short-term benefits and long-term sustainability goals. Drawing on concepts from behavioral economics and game theory, the paper explores the cognitive and psychological limitations that hinder effective global cooperation in climate finance. A matrix of systemic interest balancing is proposed to conceptualize the relationship between individual behaviors and long-term collective outcomes. The analysis highlights the insufficiency of voluntary actions and market incentives alone, emphasizing the role of regulatory mechanisms, fiscal instruments, and institutional frameworks that internalize environmental externalities and align short-term motivations with long-term global needs. Empirical data from recent climate finance reports have been analyzed to demonstrate the scale of the investment gap and the economic losses associated with climate inaction. Contrary to the perceived conflict between economic and environmental goals, the article argues that climate investments are not only ecologically necessary but also economically rational in the long run. Thus, the challenge lies in creating systems that effectively transmit long-term collective interests into present-day decisions of individuals, institutions, and governments. The findings provide the conceptual groundwork for the design of integrated policies and financial tools to enhance the efficiency and sufficiency of climate financing, ensuring a coordinated global response to climate change.
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