Donors raiding development aid to pay for climate, report warns

High-income countries are far behind on their international climate finance obligations, but that hasn’t stopped them from taking money from development aid budgets, according to a new analysis launched ahead of the United Nations General Assembly taking place in New York this week. A failure of high-income countries to deliver on a 2009 promise to mobilize $100 billion a year in climate finance — on top of aid — to lower-income countries vulnerable to the effects of global warming has long soured climate negotiations, causing mistrust and impeding progress in climate talks. While that target is expected to be met this year, the focus of many climate experts is already moving to the post-$100 billion target, known as the New Collective Quantified Goal, or NCQG, due in 2025 and is expected to run into the trillions. However, two recent reports have added to extensive concerns about existing climate finance, including its overlap with traditional official development assistance. A report by international NGO CARE released this month has found that 93% of the climate finance reported by high-income countries between 2011 and 2020 was taken directly from development aid budgets, which CARE placed at 0.7% of gross domestic product though that amount has been inconsistent across donor countries despite their support for it. “The majority of climate finance is development finance in disguise. Money is being diverted towards climate change action, but at the expense of financial support for health, education, women’s rights, and poverty alleviation,” report co-author John Nordbo, senior climate adviser at CARE Denmark, said in a statement. “This was not the agreement in 2009, when it was clearly stipulated that climate finance was meant to be additional to existing funds for development,” Nordbo said, adding that substituting development aid for climate funding was “dysfunctional, deceitful, and unjust.” U.K. International Development Minister Andrew Mitchell came under fire in May after he suggested to Devex that some humanitarian funds should be used for climate adaptation after a crisis. Another scathing report by the think tank Overseas Development Institute found many high-income countries have failed to meet their climate finance targets for 11 years in a row, with the United States, Spain, and Australia the biggest laggards. According to ODI, just eight of 23 high-income countries have paid their fair share. The ODI report stressed the importance of funding for climate adaptation, a broad category that refers to preparing countries to adjust to the effects of global warming. Despite its importance — and a donor commitment to double funding for it made at the U.N. climate summit, or COP 26, in 2021 — climate adaptation financing still lags way behind climate mitigation funding, which is aimed at reducing carbon emissions and, unlike adaptation projects, usually provides a clear return on investment. In climate-vulnerable Kenya, the climate finance that reaches the country is heavily skewed, at 80%, toward mitigation, according to Jackson Mekenye, Concern Worldwide’s food security and livelihoods coordinator. Mekenye said: “Greater levels of investment targeted at adaptation efforts, including improved agricultural practices and watershed management, hold the potential to build resilience to flood and other hazards over the long term.” “It’s a total failure of responsibility by developed countries who bear historical responsibility for climate change,” said ODI’s Laetitia Pettinotti, lead author of the report.