Climate finance by rich countries surges 2% in 2019 but set to miss $100bn target

More needs to be done to help poor countries fight climate change, OECD secretary general says

OECD secretary general Mathias Cormann on Friday said wealthy nations must do more to help poor countries fight climate change. Getty Images

Finance provided and mobilised by developed countries to help poor countries tackle climate change rose 2 per cent annually in 2019 to $79.6 billion but is expected to fall short of the target of $100bn by 2020, according to a report from the Organisation for Economic Co-operation and Development (OECD).

The data has yet to be calculated for 2020.

“Climate finance continued to grow in 2019 but developed countries remain $20bn short of meeting the 2020 goal of mobilising $100bn,” OECD secretary general Mathias Cormann said on Friday.

“The limited progress in overall climate finance volumes between 2018 and 2019 is disappointing, particularly ahead of Cop26. While appropriately verified data for 2020 will not be available until early next year, it is clear that climate finance will remain well short of its target,” Mr Cormann said.

The report comes as UN chief Antonio Guterres urged developed countries to do more to help poor countries fight the adverse effects of the climate change and make the upcoming Cop26 conference a success.

The UN Cop26 conference in Glasgow, Scotland, in November aims to bring much more ambitious climate action and mobilise funds from participants around the globe to tackle climate change.

“More needs to be done. We know that donor countries recognise this, with Canada and Germany now taking forward a delivery plan for mobilising the additional finance required to reach the $100bn a year goal,” Mr Cormann added.

Asia has been the main beneficiary of climate finance over 2016 to 2019 period, receiving 43 per cent of the total on average, followed by Africa on 26 per cent and the Americas at 17 per cent, according to OECD data.

Climate finance for Least Developed Countries rose strongly in 2019, up 27 per cent compared to the previous year, but funding for Small Island Developing States (SIDS) fell back to 2017 levels, after an increase in 2018.

“SIDS face specific challenges in accessing climate finance. The international community needs to consider financing for climate that is appropriate for the challenges that SIDS face, less fragmented, easier to access, predictable and long-term,” the OECD report said.

Public climate finance from developed countries accounted for the lion's share of the 2019 figure, amounting to $62.9bn, while government-backed export credits reached $2.6bn. The rest, about $14bn, came from private investment mobilised by public mechanisms.

The public grant financing jumped 30 per cent year-on-year to reach $16.7bn in 2019, after having remained stable during the three previous years, according to the data. The volume of public loans, on the other hand fell by 5 per cent in 2019.

The report also shows more than half of total climate finance targeted economic infrastructure, mostly energy and transport, with much of the remainder going to agriculture and social infrastructure – notably water and sanitation.

“It is more urgent than ever that developed countries step up their efforts to deliver finance for climate action in developing countries, particularly to support poor and vulnerable countries to build resilience against the growing impacts of climate change,” Mr Cormann said.

The EU this week committed more climate funds for developing countries and urged the US to step up, according to Reuters.

US President Joe Biden in April committed to double US public climate finance by 2024, compared to average levels during former president Barack Obama's administration. Experts and campaigners are urging the world's biggest economy to do more.