Wealthy nations are expected to fall up to $75 billion short of fulfilling their long-standing pledge to jointly mobilize $100 billion a year from 2020 to 2025 to support the most vulnerable countries to adapt to the dangerous effects of climate change and reduce their emissions, according to estimates released by Oxfam today.
This analysis comes ahead of informal climate talks between world leaders at the UN General Assembly later today – a key moment to get the target back on track ahead of the landmark COP26 UN Climate Summit in Glasgow in November. The Organization for Economic Co-operation and Development (OECD) released new data on Friday showing that developed countries provided only around $80 billion in climate finance in 2019.
Based on current pledges, Oxfam estimates that wealthy governments will continue to miss the $100-billion goal and reach only $93 to $95 billion per year by 2025, five years after the goal should have been met. The shortfall means that climate-vulnerable countries will have missed out on between $68 billion and $75 billion in total over the six-year target period.
Extreme weather is already killing five million people every year – accounting for more than nine per cent of global deaths – and this is expected to increase as heat-related deaths rise due to climate change. Climate change could trigger economic losses double that of the pandemic, but it is not being treated with the same urgency as COVID-19. In 2020, the EU, UK, US, Canada, Australia and Japan spent more than $15 trillion on COVID-19 recovery packages ―equivalent to meeting the climate finance goal 151 times over.
Canada has invested over CAD$397 billion in COVID-response measures since January 2020, equating to over three times the annual global commitment to climate finance. By comparison, Canada pledged CAD$5.3 billion over five years in climate finance to help developing countries address climate change and support a green recovery. While Canada was among the few countries to increase its pledge in recent months, total funding commitments still fall short of closing the gap on climate finance as G7 leaders promised to do at the G7 summit in June.
At the request of the COP26 Secretariat, Canada agreed to co-lead work on building a climate finance action plan ahead of COP26 in November that would see developed countries deliver on their commitment of $100 billion per year through 2025. Yet with the outcome of Canada’s election to be determined and political leaders focused on Canadian voters rather than partner nations, it remains to be seen if Canada will deliver on this commitment.
Anya Knechtel, Oxfam Canada’s Climate Policy Specialist, said: “For those whose livelihoods and futures are most at risk from climate change, equitable access to promised climate finance is critical to supporting their efforts to adapt to increasing climate impacts. Our next government should step up in its role to co-lead the push for climate finance. It should also stand up for Canada’s feminist principles by calling on all countries to deliver gender- and youth-responsive finance and support for local organizations that can lead on initiatives that address the diverse needs of their communities.”
Oxfam has already raised serious concerns about how wealthy countries are currently allocating climate finance:
- While the UN, Oxfam and others have called for half of climate finance to be spent on adaptation, based on existing pledges by donor countries, only about a quarter ($26-27 billion) of total climate finance in 2025 will be spent helping developing countries build resilience and adapt to worsening climate impacts.
- In 2019, 70 per cent of public climate finance was given out as loans instead of grants. This seems set to continue through to 2025, which will push developing countries further into debt at a time when the pandemic has pushed an additional 150 million people into extreme poverty.
Climate finance is a key pillar of the Paris Agreement that can help to deliver on an agenda of climate justice for vulnerable countries and people who are on the frontlines of a crisis for which they bear little responsibility. The climate crisis has been fuelled by carbon emissions of wealthy nations and individuals, yet its impacts are shaped by intersecting injustices and inequities. Women, young people and Indigenous peoples in all their diversity – especially those living in poverty – are disproportionately affected by climate change in terms of its impacts on health, education, livelihoods and well-being. Yet their voices remain underrepresented in climate policy negotiations, and their access to resources limited.
Delivering on climate finance commitments is imperative. According to the UN Environment Program (UNEP), developing countries’ annual adaptation costs alone could reach $140 billion to $300 billion per year by 2030 and $280 billion to $500 billion by 2050 as climate-related risks and disasters increase. In 2020, which tied for the hottest year on record, 98.4 million people worldwide were affected by floods, storms and other climate-related disasters, and economic losses totalled at least $171 billion. Yet while high-income countries turn their attention to accelerating their COVID-recovery, developing countries are left struggling to address the impacts of both COVID-19 and climate change – with insufficient resources to manage either.
Nafkote Dabi, Oxfam International’s Global Climate Policy Lead, said: “The pandemic has shown that countries can swiftly mobilize trillions of dollars to respond to an emergency — it is clearly a question of political will. Let’s be clear: we are in a climate emergency. It is wreaking havoc across the globe and requires the same decisiveness and urgency. Millions of people from Senegal to Guatemala have already lost their homes, livelihoods and loved ones because of turbo-charged storms and chronic droughts, caused by a climate crisis they did little to cause. Wealthy nations must live up to their promise made twelve years ago and put their money where their mouths are. We need to see real funding increases now.”
With the COP26 UN climate talks in Glasgow just over a month away, Oxfam Canada and Oxfam-Quebec are calling on wealthy countries to urgently increase their pledges of climate finance to deliver on their target. At least 50 per cent of climate finance should be spent on adaptation in developing countries, and targeted funding should be directed to local women’s rights and youth organizations undertaking gender- and youth-responsive initiatives to ensure climate finance helps to build resilience to climate change across all communities.
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Notes to editors:
- Unless indicated, all dollar values are in US currency. Oxfam’s methodology note and datasheet are available on request.
- In 2009, developed countries agreed to contribute $100 billion a year in climate finance to poorer countries by 2020. At the Paris climate summit in 2015 (COP21), this goal was extended to last through to 2025. Under the 2015 Paris Agreement, they agreed to negotiate a yet-higher amount that would kick in from 2025.
- Climate Week NYC is taking place 20-26 September. UN Secretary-General António Guterres and UK Prime Minister Boris Johnson will convene a closed-door meeting of world leaders at the UN General Assembly later today (Monday).
- A study led by Monash University and published in the Lancet Planetary Health estimates that more than five million extra deaths a year can be attributed to abnormal hot and cold temperatures. The study found deaths related to hot temperatures increased in all regions from 2000 to 2019, indicating that global warming due to climate change will make this mortality figure worse in the future.
- The economies of the G7 nations could see an average loss of 8.5 per cent annually by 2050 ―equivalent to $4.8 trillion― if leaders do not take more ambitious action to tackle climate change, according to Oxfam’s analysis of research by the Swiss Re Institute.
- The IMF’s Fiscal Monitor Database summarizes the key fiscal measures governments have announced or taken in selected economies in response to COVID-19.
|Country||Total spending on COVID-19 fiscal measures (US$ billion)||Equivalent to meeting the $100 billion climate finance goal X times|
|EU (national spending)||4,166.02||42|
|EU (central funds)||1,361.38||14|
|EU, UK, US, Canada, Australia & Japan||15,118.50||151|
- The Stockholm International Peace Research Institute (SIPRI) reported that total military expenditure rose to $1,981 billion in 2020 (nearly $2 trillion or $2,000 billion), an increase of 2.6 per cent from 2019.
- Oxfam’s Climate Finance Shadow Report 2020 estimates that 80 per cent ($47 billion) of all reported public climate finance (2017-18) was not provided in the form of grants, but mostly as loans and other non-grant instruments. Around half of this ($24 billion) was non-concessional, offered on ungenerous terms requiring higher repayments from poor countries. Oxfam calculated that the ‘grant equivalent’ ―the true value of the loans once repayments and interest are deducted― was less than half of the amount reported.
- According to NASA, 2020 was the hottest year on record, effectively tying 2016, the previous record.
- The UN Environment Program (UNEP) estimates that annual adaptation costs in developing countries are expected to reach $140-300 billion in 2030 and $280-500 billion in 2050.