Can Inclusive Green Finance Transform the Mekong’s Climate Future?
Implications for COP30 and SDG 2030–2050 Roadmaps
By Reni Juwitasari
Researcher
Asian Research Center for International Development
School of Social Innovation, Mae Fah Luang University
As the world prepares for COP30 in Belém, Brazil (2025), global climate discussions are shifting from broad mitigation targets to a more urgent and practical question: how can climate finance reach the communities most affected by climate change? This question is especially important for the Greater Mekong Subregion (GMS), where over 300 million people face increasing threats from heat stress, changing rainfall patterns, hydropower-related ecological disruptions, and advancing saline intrusion across major river basins (ASEAN Secretariat, 2021; UNEP, 2023).
Building on insights from Synergizing Financial Inclusion and Green Finance (Parveen et al., 2025), which is a key focus of the Conference of the Parties (COP) meeting agenda, this paper examines whether inclusive green finance—combining financial inclusion and green finance—can play a transformative role in shaping the Mekong’s climate future. Although GMS governments have improved their Nationally Determined Contributions (NDCs), structural barriers remain; millions of farmers, women, ethnic and Indigenous groups, and rural businesses still lack access to formal banking systems, affordable credit, or digital financial tools (World Bank, 2021). Without these mechanisms, communities cannot adopt renewable technologies, invest in climate-resilient agriculture, or develop adaptive livelihoods.
This paper, therefore, raises a central question: can inclusive green finance bridge the gap between global COP commitments and real climate action in Mekong communities?
Climate Vulnerabilities and Financial Gaps in the Mekong
The Greater Mekong Subregion (GMS) is widely known as one of the world’s most climate-sensitive areas, facing rising temperatures, increased hydrological extremes, and rapid ecosystem decline (ASEAN Secretariat, 2021). Agricultural systems, which are essential to rural livelihoods, are particularly vulnerable, with climate-related shocks accounting for 23% of all disaster-related losses across economic sectors (UNEP, 2023). Projections further indicate that Southeast Asia could face annual GDP losses of up to 6% by mid-century if current warming trends persist (UNEP, 2023). Hydropower projects along the Mekong River, along with severe floods, long-lasting droughts, and rising salinity intrusion in delta regions, aggravate these pressures and threaten long-term food, water, and energy security.
Overlaying these ecological risks is an ongoing issue of financial exclusion. Worldwide, over 1 billion women remain unbanked, highlighting deep structural disparities also seen in Cambodia, Laos, Myanmar, Vietnam, rural Thailand, and rural China (World Bank, 2021). Ethnic minority communities face obstacles to accessing formal credit, identity documents, and digital financial services, while cross-border migrants often stay completely outside national economic systems. Although green finance is growing throughout Asia, capital mainly flows into large-scale national or corporate projects, with limited impact on vulnerable rural or Indigenous communities (ASEAN Secretariat, 2021).
Climate finance has become one of the most essential pillars of the COP process because developing regions cannot implement mitigation or adaptation commitments without predictable, accessible, and equitable financing mechanisms. As highlighted in the Paris Agreement, Parties recognized that achieving global climate goals depends on “making finance flows consistent with a pathway toward low-emission and climate-resilient development” (UNFCCC, 2015, Art. 2.1c). As a result, COP28 established the Loss and Damage Fund (UNFCCC, 2023a); COP29 aims to set a post-USD 100 billion climate finance target (UNFCCC, 2024); and COP30 is expected to focus on fair, inclusive, and transparent financing structures (UNEP-FI, 2025). For Mekong communities, the success of these international commitments will depend on whether finance is accessible, fair, and able to strengthen local adaptive capacity.
Analytical Lens: Governmentality, Environmentality, and Climate Finance
Climate governance in the Greater Mekong Subregion (GMS) often occurs through top-down, technocratic approaches, where national agencies and international donors set adaptation priorities with limited involvement from local communities. This can be understood through governmentality, a concept developed by Foucault (1991), which explains how states govern populations not just through laws but by shaping norms, desires, and “appropriate” behaviors. In the Mekong, the language of sustainability, resilience, and low-carbon development—used in COP decisions and SDG discussions—serves as a way to influence how farmers, fishers, and ethnic as well as Indigenous groups are expected to adapt to climate risks (ASEAN Secretariat, 2021; UNFCCC, 2015).
Building on this, environmentality (Agrawal, 2005) highlights how communities become “environmental subjects” through their involvement in carbon monitoring, forest patrols, or conservation projects. These interventions are frequently justified with reference to the Paris Agreement and SDG 13 (Climate Action). Yet, they often prioritize measurable emissions outcomes over local priorities and offer limited decision-making power. Under such governance regimes, adaptation may deliver SDG and NDC indicators while functioning as an exercise in discipline rather than empowerment (Agrawal, 2005; Li, 2007).
Inclusive green finance (IGF) offers a fundamentally different approach that can realign COP and SDG frameworks with local capacity. By merging financial inclusion and green finance, IGF enhances households’ and small enterprises’ ability to make adaptive decisions, diversify livelihoods, and actively participate in green value chains (Parveen et al., 2025; World Bank, 2021). When communities gain access to savings, credit, insurance, and green investment tools, they are better equipped to benefit from climate funds linked to COP30 and work toward SDGs 5, 7, 8, 10, 13, and 17 on their own terms (United Nations, 2015). In this way, financial access becomes a tool for climate agency: while COP and SDG frameworks still matter, IGF determines whether they serve as means of control or as infrastructures that support local ownership of adaptation and mitigation outcomes across the Mekong.
How Inclusive Green Finance Works in the Mekong
According to Parveen et al. (2025), Inclusive Green Finance (IGF) combines the strengths of Financial Inclusion (FI) and Green Finance (GF) to enhance climate resilience across the Greater Mekong Subregion (GMS). FI expands household and enterprise access to savings, microcredit, digital payments, and microinsurance—critical tools in a region where women, rural communities, and ethnic minorities face deep structural exclusion from formal finance (World Bank, 2021). For smallholders and fishers facing climate shocks, these financial tools provide the basic enabling conditions for adaptation, allowing them to invest in saline-resistant rice, diversify livelihoods, or access emergency liquidity during extreme weather.
GF complements this by providing the capital backbone for decarbonization, mobilizing funds through green bonds, ESG-linked lending, carbon markets, blended finance, and emerging green fintech ecosystems (ASEAN Secretariat, 2021). GF drives the expansion of renewable energy, resilient agricultural systems, and low-carbon infrastructure. When integrated, FI and GF become mutually reinforcing, creating an Inclusive Green Transition (IGT), a model that democratizes climate finance, supports SDGs 7, 8, 9, 13, and 17, and aligns national development plans with net-zero 2050 pathways (Parveen et al., 2025).
The importance of IGF is clear when viewed through the lens of governmentality and environmentality. In Vietnam’s climate governance, the state has long portrayed farmers as responsible agents of “green modernization,” promoting adherence to low-carbon rice-farming practices through extension services and NDC-linked programs (Sharick & Tan, 2025). This illustrates governmentality—behavior influenced through technical guidance and sustainability discourse. Meanwhile, farmers involved in carbon market pilots in the Mekong Delta become “environmental subjects,” tracking emissions and modifying practices to meet donor or corporate carbon standards (Agrawal, 2005).
IGF has the potential to counteract this disciplinary dynamic by enabling farmers to adopt innovations on their own terms. Mobile banking, crop insurance, and green microcredit allow households to invest in climate-resilient rice without depending solely on state-linked programs. Instead of being disciplined into low-carbon behaviour, farmers gain financial agency to choose adaptation pathways aligned with their needs.
In Thailand, green finance is often part of the Bio-Circular-Green (BCG) economy, where sustainability is seen as a key part of the national competitiveness agenda (NESDC, 2022). Small businesses in rural tourism or community-based farming are encouraged—sometimes pressured—to meet ESG standards to access green credit. IGF can make this process more accessible by allowing women entrepreneurs and village cooperatives to access low-interest loans and digital banking tools, reducing reliance on government-led certification systems.
In Laos, REDD+ programs illustrate environmentality: ethnic communities carry out forest patrols and carbon measurement activities framed as global climate responsibilities (Behr et a;., 2012). Transparent IGF mechanisms—such as direct digital payments, microcredit for forest livelihoods, and climate-risk insurance—can transform these programs from compliance-driven to benefit-sharing systems where communities receive tangible climate dividends.
In Cambodia, microfinance institutions dominate rural credit markets, yet most loans remain focused on consumption and carry high interest rates (Bylander et al., 2018). IGF can redirect these flows toward green microfinance for solar irrigation, drought-resistant seeds, and women-led enterprises, reducing climate vulnerability while enhancing financial independence.
In Myanmar, political instability has pushed many communities outside formal institutions, making remittances and NGO-led finance the most practical channels for climate-related investment (UNDP, 2022). Humanitarian-aligned IGF—delivered through digital wallets or community renewable energy funds—can offer climate resilience without strengthening state coercion.
Finally, in Yunnan, China, the state's developmental governmentality drives large-scale green innovation, cross-border hydropower projects, and regional economic corridors (Hennig et al., 2013). IGF can ensure that these transitions produce shared benefits across borders, supporting renewable energy spillovers and community-level green enterprises throughout the Mekong Basin.
COP30: A Critical Moment for the Mekong
As the international community approaches COP30 in Belém, Brazil, the conference is expected to emphasize climate justice more than ever, focusing on operationalizing loss and damage finance, nature-based solutions, and including women, ethnic, and Indigenous communities (UNFCCC, 2025). A key focus will be on making climate finance more transparent and accessible, especially for regions facing structural vulnerability, such as the Greater Mekong Subregion (GMS). These priorities directly align with the needs of Mekong countries, where financial exclusion and climate exposure reinforce each other.
Inclusive Green Finance (IGF) strongly supports COP30’s agenda. Since IGF combines financial inclusion and green finance, it can help Mekong communities access global climate funds directly, benefit from gender-sensitive financing tools, and use digital financial inclusion mechanisms to promote fair participation in climate investments (World Bank, 2021; Parveen et al., 2025). At the regional level, IGF can help develop transboundary Mekong climate finance facilities and improve coordination among ASEAN, the Mekong River Commission, and ACMECS. By linking national finance systems with the Sustainable Development Goals (SDGs), IGF enhances alignment between climate initiatives and development planning (ASEAN Secretariat, 2021).
IGF directly advances SDG 5 (Gender Equality), SDG 7 (Clean Energy), SDG 8 (Decent Work), SDG 9 (Industry, Innovation, and Infrastructure), SDG 10 (Reduced Inequalities), SDG 13 (Climate Action), and SDG 17 (Partnerships). Looking toward 2050, IGF underpins transitions to low-carbon agriculture, green infrastructure systems, renewable energy adoption, inclusive carbon markets, and community-led nature-based solutions, ensuring that climate action is both practical and socially just across the Mekong.
Conclusion and Policy Implications
Inclusive Green Finance (IGF) presents a crucial opportunity for the Greater Mekong Subregion as it faces increasing climate risks and growing financial inequalities. With COP30 raising the global focus on climate justice, loss and damage finance, and transparent climate mechanisms, Mekong countries need to shift from viewing climate finance as a top-down tool to integrating it as a foundation for community empowerment. Combining financial inclusion with green finance enables farmers, women, and Indigenous groups to access savings, credit, insurance, and green investment tools that allow them to craft their own adaptation strategies rather than follow externally imposed resilience plans. In a region where vulnerability is closely tied to limited financial access, IGF functions not only as a financing model but also as a driver of governance change.
To move in this direction, Mekong states need to weave IGF into national climate policies—NDCs, NAPs, and green growth strategies—so that financial access becomes an explicit mechanism for delivering adaptation and mitigation outcomes. Expanding digital financial services, community cooperatives, and gender-responsive lending in rural and Indigenous areas will be essential to ensuring that climate funds reach those most exposed to risk. Regional institutions such as ASEAN, the Mekong River Commission, and ACMECS should collaborate to establish transboundary climate finance platforms that support nature-based solutions, renewable energy integration, and equitable carbon markets. At the same time, banks and fintech innovators must expand ESG-linked lending, green microcredit, and microinsurance products tailored to smallholders and micro-enterprises. Ensuring transparent benefit-sharing and community participation in climate finance, especially within carbon market and REDD+ schemes, will be critical to preventing elite capture and strengthening local trust.
If implemented cohesively, IGF can accelerate progress on the SDG 2030 agenda while laying the groundwork for net-zero transitions by 2050. More importantly, it can help the Mekong move from a model of climate vulnerability to one of climate agency, where local communities, supported by accessible finance and regional cooperation, become central actors in building a just and sustainable future.
Thanks to Assistant Professor Maya Dania, Assistant to the Dean of Research, School of Social Innovation, Mae Fah Luang University, for supervising this article.
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