The world is poised to invest trillions to guard its borders, military bases and strategic interests, but is not ready to invest in an adequate amount of resources to guard the land, infrastructure and economies those troops are supposed to protect. That paradox has come to the fore as a major issue before the COP31 climate summit in Antalya, Turkey, where the money for climate action and the survival of states is becoming one and the same.

Minister of Environment and COP31 President Murat Kurum has called on governments to be as committed as they are to spending on military.COP31 President and Environment Minister Murat Kurum has urged governments to be as committed as they were to spending money on military to fight climate change. During preparatory talks in Fiji, Kurum raised the question of the strategic significance of defending a state when its territory will become uninhabitable because of climate change.

His intervention follows the work of NATO members in their efforts to agree to dedicate 5% of their GDP to defence and defence-related security spending by 2035. Of this, 3.5% is dedicated to core military needs, and another 1.5% to investments related to overall security. In the meantime, developing economies are still facing difficulties in obtaining financing for flood protection, coastal infrastructure, drought resilience and energy transition.

There's a huge money gap. By 2035, the United Nations Environment Programme (UNEP) projects that developing countries will need $310 billion to $365 billion per year to adapt to the increasing effects of climate change. International public adaptation finance fell 2023 to $26 billion and was lower in 2022.

This is an additional funding needs of about 12 to 14 times current flows. It also highlights a basic flaw in global climate diplomacy: Governments make ambitious pledges without robust financing frameworks to back them.

Recently, the conflict has taken on new meaning after EU officials reported on October 12 that they were moving toward imposing tougher emissions reductions at COP31, but making no significant new climate-finance pledges. The European negotiating strategy reportedly involves chasing targets until 2040 under the United Nations (UN) mitigation work programme, and speeding up electrification and fossil fuel cutbacks.

In other less affluent countries, however, more stringent environmental requirements without financial support could lead to a second international inequality. The wealthier countries have the resources financial, technological and institutional to fund energy transitions. Along with the expansion of electricity access, developing countries need to create industrial capacity and jobs, and to safeguard vulnerable groups.

Perhaps the best example of this imbalance is the Pacific islands.

Emerging threats to freshwater resources, coastal erosion and rising sea levels are a growing concern in countries like Tuvalu. They emit very little CO2 relative to the other big economies, but are exposed to disproportionately high levels of climate damage.

The Pacific Resilience Facility, set up to boost regional disaster preparedness and climate protection while not burdening the region with unsustainable debt, has asked for initial pledges of $500 million and eventual $1.5 billion. Fiji has committed $10 million, Britain $13 million and the Netherlands about $1.12 million, and Denmark and Ireland have pledged more in the past.

These are important, but limited contributions in the face of the challenge. The previous Australian contribution of A$100 million for the facility is a sign of deeper regional involvement, but the amount of funding for the facility itself is still not decided.

The effects are far beyond vulnerable island-states for the international financial system. Climate hazard events inflict harm on transport infrastructure, food production, power lines, ports, and industrial plants. The higher the cost of rebuilding, the higher the cost of insurance and the greater the demand for government borrowing, as well as the deterioration of public finances.

A climate event is thus not simply an environmental emergency. It can be a Fisherman's Ruin, a supply-chain disruption and, in highly indebted economies, a sovereign-credit shock.

The geopolitical side is also of interest. Prolonged disaster events could lead to a greater reliance on external infrastructure financing, concessional loans and emergency support in the country. Such dependence can lead to new potential diplomatic weaknesses and strategic leverage for great powers.

In this way, climate finance is further turning into a tool of international influence, such as development lending, energy agreements and defence cooperation.

This debate is of special economic importance for India. India is one of the world's biggest developing economies and has to strike the balance between industrialisation, energy security and job creation with climate resilience. It has a clear vision of how environmental policy can boost industrial competitiveness, with a significant investment in renewable electricity, electric mobility and local manufacturing.

However, there is no way to assess India's transition based on the economic conditions of the rich nations that industrialized over centuries by consuming fossil fuels.

India should have cheap energy for its manufacturing needs, digital facilities, transport upgrades, and increased consumption by households. Any climate commitments which have an adverse impact on energy affordability or industrial competitiveness would be unfairly levied on business and consumers.

The more effective strategy is to increase the potential of renewable sources of energy with adequate electricity supply, upgrading electricity grids, improving clean-tech domestic production, investing in water management, agriculture, and infrastructure that is resistant to disasters.

But there is a crucial difference between climate investment and climate spending. Investment in early-warning systems, in roads which are resistant to flooding, in irrigation systems (including flood control) can limit future economic losses. Avoiding damage, protecting productivity and long-term financial benefits should be considered, not just as a subsidy for the environment.

COP31 will also examine whether or not international institutions can help make climate finance more accessible. The existing global objective is to mobilise at least $1.3 trillion annually for developing countries by 2035 from public and private sources. To provide such level of finance, the development banks, institutional investors, governments and commercial lenders have to overcome foreign exchange risks, financing expenses and project viability.

But using climate finance as an alternative to defence spending should not be a justification for reducing resourcing of legitimate national security needs. It is not possible for countries facing military threats to simply shift defence spending to environmental programs. National security and climate resilience are not mutually exclusive functions, but are concurrent functions.