Financing justice? UK climate finance and how to increase ambition at COP26
In 2010, rich countries pledged to provide $100 billion a year in climate finance to the global south by 2020, but fell well short. Official estimates suggest that rich countries provided $78.9 billion in 2018, but Oxfam estimates that the net value of government financing for climate specific projects could be as low as $19–22.5 billion a year.
The UK is estimated to have provided the equivalent of just $1.1 billion in climate finance grants in 2017/18. The Prime Minister has announced an increase to $3.22 billion a year (2021/22-2025-26), but this remains insufficient when the UK is responsible for 6% of historic carbon emissions.
Questions have also been raised about the quality of climate finance from rich governments, particularly the “low levels and declining share of grant finance, the underfunding of adaptation” and “lack of adequate finance for Least Developed Countries (LDCs) and Small Island Developing States (SIDS)”.
This briefing summarises the key issues with climate finance at present, argues for what good climate finance should look like, and echoes global south demands for a rapid increase in climate finance at COP26.
- The UK must use its COP26 Presidency to rapidly scale up grant-based climate finance from rich countries and establish a pathway to $400 billion a year;
- The UK must increase its own commitments and meet demands from global south leaders to provide at least $46 billion a year (less than 1.5% of national income) in grant-based climate finance;
- New commitments should prioritise support for adaptation, particularly for LDCs and SIDS, while a new international mechanism should be established to compensate for loss & damage;
- The UK should also support a process, led by frontline communities and social movements, to assess the climate debt that it owes (in compensation for cumulative historical greenhouse gas emissions) to the global south and to establish an appropriate amount of climate reparations to be paid each year (in addition to climate finance and international development commitments).