Seeing Double 2023: The Failed Promises of Wealthy Nations in Climate Finance

Cyclone Idai, Mozambique 2019, Photo: CARE/Josh Estey

At COP15 in Copenhagen, developed nations pledged to support climate action in developing nations with ‘new and additional’ finance. The support should grow to USD 100 billion annually by 2020. The 100 billion goal has not been met yet, but some climate finance has been provided.

An important question is to what extent this finance has really been extra support, i.e. additional to official development assistance (ODA). Therefore CARE has analyzed data on all climate finance so far reported to the United Nations Framework Convention on Climate Change (UNFCCC) by rich countries and matched the amounts with data on each country’s ODA. Our research was recently published in the report Seeing Double 2023.

Strong and weak additionality

As there is no internationally agreed definition of additionality, the report utilizes two definitions, one in line with other UN commitments, and a more lenient one. ‘Strong additionality’ requires that climate finance is provided on top of the long-standing UN commitment to provide 0.7 percent of rich countries’ Gross National Income (GNI) as ODA. ‘Weak additionality’ refers to climate finance above the level of development finance a country provided in 2009.

Threats to development aid

The report reveals that only 7 percent of climate finance from 2011 to 2020 is strongly additional. Regarding weak additionality, 48 percent of reported climate finance exceeded the level of development finance in 2009. This means that over half of the reported climate finance does not genuinely contribute to extra support for the Global South. Instead, development aid has been diverted to support climate activities. This diversion of funds from addressing poverty, health, education, and women’s rights jeopardizes progress towards the Sustainable Development Goals (SDGs). Allocating development finance to climate change actions is unjust and increases the burden on the world’s poorest, who have contributed the least to the climate crisis.

CARE has looked into the climate finance reported by each developed country, revealing three broad groups in terms of contribution.

Only three countries are consistently good

Despite the many handshakes over the years from wealthy countries to support development in the Global South, only seven countries managed at some point during the decade 2011-20 to provide 0.7 percent of GNI as ODA. Of these, just three nations – Luxembourg, Norway, and Sweden – consistently surpassed the 0.7 percent GNI ODA commitment, and provided all their climate finance on top of meeting the ODA goal across the ten years.

Eleven countries provide a little additional climate finance

Countries like Germany, Denmark, the United Kingdom, and Canada, among others, provided lower shares of their GNI as ODA. While Germany increased its development support, it failed to deliver additional climate finance consistently. Denmark and the Netherlands occasionally exceeded the 0.7 percent target, but their overall support decreased.

Nine countries are lagging far behind

A further nine countries, including such nations as the United States, Australia, and France, provided less than USD 10 annually per capita in additional climate finance – and that only under the weak defniition. Notably, the United States, historically the largest emitter of greenhouse gasses, reported a mere 0.01 percent of GNI as climate finance from 2011 to 2020. Despite being the world’s largest economy, the United States falls short of shouldering its responsibility for international climate finance.

The next climate finance target must lead to real support

The report reveals the glaring gaps in developed nations’ contributions to climate finance and highlights the urgent need for transparent and effective financial commitments. Next year the New Collective Quantified Goal will be negotiated and set at COP29. This goal shall succeed the USD 100 billion target and cover climate finance for the years from 2026 onwards. In this connection it is crucial to secure that the practice of diverting much-needed development assistance to climate finance ends to agree upon a clear requirement and definition of additionality.

Guest post by Signe Kaldahl and John Nordbo, CARE Denmark