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Select members of the Under2 Coalition have today urged global leaders to grant subnational governments greater authority and resources to accelerate climate finance and action.

Their joint statement, released as world governments and finance leaders gather for the Fourth International Conference on Financing for Development (FfD4), also calls for the introduction of global solidarity levies on high-emitting sectors to improve access to climate finance for developing economies.

Co-signed by 15 subnational governments, the statement highlights the urgent need for innovative and localized financing solutions, especially as global climate pledges, including the US$300 billion commitment at COP29, remain well below what is required to cover the costs of mitigation, adaptation, loss and damage, and nature protection.

“Local governments are leading on-the-ground climate action but lack the financing and policy tools to scale their efforts,” the statement reads. “Innovative finance models and global solidarity are essential to close the funding gap.”

According to Dr. Champa Patel, Executive Director for Governments and Policy at Climate Group, 44% of all new carbon pricing instruments implemented in the past three years have been led by state and regional governments.

“These include carbon taxes, cap-and-invest programs, and new levies, reflecting bold local leadership. But to scale these efforts, subnational actors urgently need national and international support through financing, policy alignment, and technical assistance,” she said.

Examples of subnational climate finance innovation include:

• Washington State’s Cap-and-Invest Program
• Catalonia’s carbon tax on fossil-fuel vehicles
• California’s hybrid cap-and-trade system

These initiatives are generating billions to fund climate resilience and transition efforts at the local level.

Solidarity in Action

Subnational governments are also extending their efforts beyond their borders:

• Québec has committed over CAN $100 million of its carbon revenues to support climate-vulnerable nations.
• Scotland pledged £10 million for loss and damage initiatives, marking the first such commitment from a developed subnational government.

Despite such progress, many regional and state governments, especially in the Global South, face structural barriers: limited authority, constrained resources, and lack of access to international finance mechanisms.

“We know that subnational governments are uniquely positioned to accelerate climate solutions that work for people and planet,” added Dr. Patel. “They are proving that climate action and development go hand-in-hand. What they need now is support, investment, and a seat at the global table where financing decisions are made.”

Key Demands Ahead of FfD4 Outcomes

The Under2 Coalition signatories are urging the FfD4 conference to:

• Recognize the leadership of subnational governments in delivering climate results.
• Support scalable, localized finance models driven by states and regions.
• Advance global solidarity levies on aviation, shipping, and financial transactions as new concessional finance sources.
• Ensure fair and equitable distribution of international levy revenues to local governments.
• Enhance direct access for subnational governments, especially in developing economies, to international climate finance mechanisms.

Signatories of the Statement:

• Government of the State of Aguascalientes (Mexico)
• State Government of Baden-Württemberg (Germany)
• Government of Catalonia (Spain)
• Government of Córdoba (Argentina)
• Gauteng Provincial Government (South Africa)
• Government of the State of Minas Gerais (Brazil)
• North Bank Region, Kerewan (The Gambia)
• Government of Pernambuco (Brazil)
• Government of Piauí (Brazil)
• Government of Québec (Canada)
• Government of the State of Rio de Janeiro (Brazil)
• Government of the State of Rondônia (Brazil)
• Government of Santa Fe (Argentina)
• Scottish Government (United Kingdom)
• Government of Taraba State (Nigeria)