Report: Richer nations providing one-fifth of promised climate finance to poorer countries

Wealthy nations are giving too little assistance to poorer countries to help them cope with the effects of climate change and transition to cleaner economies, Oxfam has said. In its Climate Finance Shadow Report 2023 , published on Monday to coincide with the Bonn Climate Change Conference , the aid organisation said the real value of climate finance from richer countries each year was, at most, $24.5 billion, a fraction of the $83.3bn said to have been delivered. The organisation also said that more than half of all climate finance received by the poorest nations was in the form of loans, which risked adding to the burden of debt faced by impoverished countries. Nafkote Dabi, climate change policy lead for Oxfam International, branded the situation “deeply unjust”. “Rich countries are treating poorer countries with contempt. In doing so, they are fatally undermining crucial climate negotiations. They’re playing a dangerous game where we will all lose out,” she said. Oxfam called for a “massive” scale-up in efforts and said more money should be provided as grants rather than loans. “International climate finance offers essential support to communities and countries on the front lines of climate change – to address climate damages, to adapt to unavoidable climate change and to advance low-carbon development pathways,” the report said. At the Cop15 United Nations climate change summit in Copenhagen, Denmark, in 2009, developed nations agreed to collectively provide $100 billion per year for climate action by 2020. Figures from the Organisation for Economic Co-operation and Development indicated that $83.3 billion was mobilised in 2020, most of it public finance, while $14.5bn was private finance and $3bn was export credits. Oxfam said that the $83.3bn figure was an overestimate because with some projects the climate objective was overstated or loans were included at face value. Instead of providing additional money, donor countries are thought to be repurposing up to one-third of aid contributions as climate finance. The actual amount of funds mobilised by wealthy nations in 2020 to support climate action in poorer countries – what the report described as the “real value” of funds – was between $21bn and $24.5bn. Oxfam calculated that the amount directed to help nations adapt to the effects of climate change was between $9.5bn and $11.5bn, which it said was too little given that the world is already experiencing the effects. “Don’t be fooled into thinking $11.5bn is anywhere near enough for low and middle-income countries to help their people cope with more and bigger floods, hurricanes, firestorms, droughts and other terrible harms brought about by climate change,” Ms Dabi said. The $14.5bn from private investors, mostly for mitigation, was less than the amount the private sector had been expected to provide for climate projects in poorer nations, the organisation said. Dr Ajay Gambhir, a senior research fellow at the Grantham Institute on Climate Change and the Environment, part of the London School of Economics, said: “It’s always been known” and the OECD figure is “the most generous one”. “There are significantly lower legitimate interpretations,” said Dr Gambhir, who cautioned that he had not read the Oxfam report. “Whatever way you look at it, the developed countries aren’t living up to their commitments. If you look at the scale of the challenge in decarbonising and adapting, there needs to be much more finance.” Dr Gambhir said funds were needed for everything from building sea walls to adding reflective surfaces to buildings to help developing nations adapt to climate change. “We’re starting to see some severe droughts – agricultural droughts and river flows [being affected] and so on. There’s a lot of irrigation investment that needs to be done,” he said. The other key issue – helping developing nations limit their contribution to climate change, known as mitigation – involves helping them move away from fossil fuels, whether in transport or power generation. “Countries are starting to see finance as part of a just energy transition,” Dr Gambhir said. “There needs to be financial support to help them switch away from [fossil fuels]. “Renewable costs are coming down but there are infrastructure and grid connections and backup issues that need to be paid for. “There are options to switch from polluting coal power to renewables that need to be helped through finance.” Oxfam’s report comes in the wake of warnings by Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and Cop28 President-Designate, that the limited availability of climate finance was putting the world’s climate goals in jeopardy Speaking at the African Development Bank 2023 Annual Meetings in Egypt, Dr Al Jaber called for an increase in public and private finance to help low-carbon growth and development in Africa. He said there was a “lack of available, accessible, affordable finance” for the continent. “This lack of finance is putting the world’s climate goals and Africa’s sustainable development at risk,” he told UAE news agency Wam. Those comments were made just weeks after, at the Joint meeting of G7 Ministers of Climate, Energy and the Environment in Japan in April, Dr Al Jaber urged the world’s wealthiest nations to increase the accessibility and affordability of climate finance. Oxfam said the UN Framework Convention on Climate Change offered the chance to set new goals for climate finance for 2025 onwards, but “past mistakes” should not be repeated.

Report: Richer nations providing one-fifth of promised climate finance to poorer countries

Oxfam research shows the real amount each year is a fraction of the $83.3 billion stated by the OECD