Billions of euros in aid for the poorest countries are being rerouted into climate finance

John Nordbo is a senior climate adviser at CARE Denmark. He holds a MA in political science and has followed the international climate talks for twenty years, currently specializing in climate finance issues. Before entering the NGO field, John worked as a government official within the Danish Ministry for Environment and Energy. Here he explains where many countries’ climate finance actually comes from.

On the 2009 Copenhagen Climate Change Conference (COP15), developed countries committed to financially supporting climate change adaptation and mitigation activities in developing countries.

This climate finance commitment was not an altruistic pledge by wealthy countries. It was a part of a broader global green deal arising from the UNFCCC’s COP15 negotiation. The deal would help the Global South to step up climate motion despite the pressing need for economic development and poverty reduction.

In recognition of those needs, the G7 and other wealthy countries promised to offer “scaled-up” finance, reaching $100 billion (€96 billion) a yr in 2020. In addition they committed to finding this money from “latest and extra” budgets – not existing ones.

Nonetheless, the most recent report from humanitarian aid organisation CARE Denmark reveals how much public climate finance reported to the UNFCCC by developed countries was really “latest and extra”.

The findings show that the majority of the general public climate finance reported by wealthy countries from 2011 to 2018 was actually taken directly from development aid budgets.

The failures of the G7

Only three of the developed countries assessed consistently surpassed the longstanding UN-sanctioned commitment. 

This commitment involves providing 0.7 per cent of their gross national income as Official Development Assistance while providing large per capita amounts of climate finance on top of that. These countries were Luxembourg, Norway and Sweden.

The G7 countries, in contrast, bear the responsibility for a lot of the failure.

Canada, France, Germany, Italy, Japan, the UK and the US represent among the largest global economies – and the countries reporting large amounts of climate finance.

Collectively, G7 countries account for $186 billion (€178 billion) – or 85 per cent – of the climate finance reported by all wealthy countries from 2011 to 2018.

But despite reporting such large amounts, these economies provide almost no additional climate finance. It’s because they’ve almost entirely failed to offer 0.7 per cent of their gross national income as Official Development Assistance.

Compared, across the identical eight-year period, Luxembourg, Norway and Sweden provided greater than 1 per cent of their gross national income as funds for development and climate change objectives.

Despite having economies 40 times smaller than those of the G7, these small European nations provided substantially more climate finance that’s “latest and extra” to assist commitments.

What’s the impact on development and SDG progress?

In 2015, the UN General Assembly set an agenda to secure sustainable development the world over by 2030.

The agenda requires that 17 Sustainable Development Goals (SDGs) are met, including the eradication of utmost poverty and hunger in addition to achieving gender equality and empowerment of all women and girls.

The investment required to realize these SDGs is vast and urgently needed. This urgency makes the findings from the CARE report particularly damning within the face of current global challenges – including Russia’s invasion of Ukraine, global energy and food insecurity, and the continued effects of the pandemic.

In response to the World Food Programme, a complete of 45 million persons are on the brink of famine across 43 countries, unless they receive immediate life and livelihood-saving assistance.

Recent Organisation for Economic Co-operation and Development (OECD) statistics show that development aid is already spread thin among the many SDGs, humanitarian response and relief, COVID and refugee costs.

For a lot of developing countries, aid stays essential.

The tough realities of climate change will even add substantial costs to the event agendas within the Global South, making a cycle of poverty that further undermines countries’ ability to construct resilience.

This was recognised within the crucial IPCC report from climate scientists in April, which noted that “a key agreement was that climate financing ought to be ‘latest and extra’ and never at the price of SDGs.”

The IPCC articulated what hundreds of thousands of individuals across the Global South particularly are actually experiencing firsthand, that “resources prioritising climate at the price of non-climate development finance increases the vulnerability of a population for any given level of climate shocks.”

In other words, redirecting money from other aid projects to climate finance may very well make countries more vulnerable to the impacts of climate change in the long term.

The injustice of ‘either/or’ funding

The truth is the Global North has failed, and is failing, to chop its own emissions fast enough to bring climate change under control. These countries have gained enormous economic advantages from the near unrestricted combustion of fossil fuels. This has led to each high per capita emissions and incomes.

Meanwhile, there may be a growing need for countries within the Global South to leap-frog fossil fuel intensive processes. Mitigation through the deployment of renewable energy, nevertheless, can carry extra costs in comparison with fossil fuel-based supplies.

Global warming has reached a level that makes costly adaptation to climate change vital.

Diverting funds from poverty, health, and education initiatives in developing countries to climate change mitigation and adaptation strategies in an ‘either/or’ scenario is fundamentally unjust.

This approach will only serve to widen the inequality gap between developed and developing countries, slow the achievement of the SDGs, and – crucially – end in those that have contributed least to the climate crisis paying the best price.

It’s critical that the G7 and other developed countries follow the instance of Luxembourg, Norway, and Sweden. They have to deliver their climate finance on top of the pledge to offer 0.7 per cent of their gross national income as Official Development Assistance.

Countries not yet meeting the 0.7 per cent goal should redouble their efforts to achieve this inside the following few years, ensuring that their climate finance is contributed on top of a growing aid budget.

Otherwise, we’re simply shifting the responsibility for climate motion to the world’s poorest.


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