Oxfam International's latest report reveals a vast disparity between reported and actual climate finance, showing that developed nations fell significantly short of their $100 billion annual commitment in 2022
A new report from Oxfam International has highlighted a substantial shortfall in climate finance provided by developed nations to developing countries in 2022. While the
Organisation for Economic Co-operation and Development (OECD) claimed that developed countries met their $100 billion annual climate finance commitment by mobilising nearly $116 billion, Oxfam's analysis suggests that the actual support was closer to $35 billion.
In 2009, at the UN climate conference in Copenhagen, wealthy nations pledged to deliver $100 billion annually from 2020 to aid developing countries in mitigating and adapting to climate change. However, delays in fulfilling this promise have undermined trust and caused friction during subsequent climate negotiations.
Oxfam’s analysis exposes a significant discrepancy between the reported figures and the real financial support provided. The organisation noted that nearly 70 percent of the purported $116 billion was given in the form of loans, many at market rates, thereby worsening the debt burden for already indebted nations. The developed nations have been accused of short-changing lower-income countries by approximately $88 billion in 2022.
Oxfam’s figures are based on research by INKA Consult and Steve Cutts, which utilised the most recent OECD climate-related development finance datasets for 2021 and 2022. The organisation recalculated climate-related loans to reflect their grant equivalents, adjusting for differences between market-rate loans and those offered on preferential terms.
The urgency for substantial climate finance is greater than ever.
According to the United Nations Environment Programme (UNEP), developing countries need between $215 billion and $387 billion annually this decade just for adaptation efforts.
As the world approaches the UN climate conference in Baku, Azerbaijan, where the New Collective Quantified Goal (NCQG) will be discussed, reaching a consensus on climate finance remains challenging.
Developed nations argue that high-emission countries with significant economic capacities, such as China and oil-rich states classified as developing under the Paris Agreement, should also contribute to climate finance. Conversely, developing countries emphasise Article 9 of the Paris Agreement, which asserts that climate finance should flow from developed to developing nations.
Oxfam insists that climate finance should prioritise grants over loans and target genuine climate-related initiatives to support vulnerable nations in adapting to climate impacts and transitioning away from fossil fuels.
The upcoming COP29 conference will be crucial in addressing these issues and establishing a new financial framework to support climate action in developing countries. As negotiations proceed, the emphasis will be on securing a robust and fair agreement that honours the promises made over a decade ago.