In a first, $100 bn climate finance goal by developed nations breached: OECD

Developed countries provided and mobilised $115.9 billion in climate finance for developing countries in 2022, exceeding the annual $100 billion goal for the first time and reaching a level that had not been expected before 2025, a report said on Wednesday.

According to new figures from the Organisation for Economic Co-operation and Development (OECD), in 2022, climate finance was up by 30% from 2021, or by $26.3 billion. This is the biggest year-on-year increase to date and means that the 100-billion mark was reached a year earlier than the OECD had previously projected, albeit two years later than the initial target of 2020.

Environment activists question the financial support, saying much of the funding is repackaged as high interest loans rather than grants.

“While developed countries claim to meet the target of providing $100 billion annually in climate finance to developing nations, the process is riddled with ambiguity and inadequacies. Much of the funding is repackaged as loans rather than grants and is often intertwined with existing aid, blurring the lines of true financial assistance,” said Harjeet Singh, Climate activist and Global Engagement Director, Fossil Fuel Non-Proliferation Treaty Initiative.  

Climate finance provided and mobilised by developed countries in 2013-2022 is the OECD’s seventh assessment of progress towards the UNFCCC goal, agreed in 2009, of mobilising $100 billion a year by 2020--a commitment later extended through to 2025--to help developing countries mitigate and adapt to climate change.

It comes as United Nations Framework Convention on Climate Change (UNFCCC) discussions are underway to set a New Collective Quantified Goal (NCQG) on climate finance for the period after 2025, taking into account developing countries’ needs and priorities as well as the evolving global economic landscape.

“It is good to see that developed countries have exceeded the $100 billion goal in 2022. Exceeding this annual commitment materially by more than 15% is an important and symbolic achievement which goes some way towards making up for the two year delay, which should help build trust. We encourage developed countries to keep up the momentum, also to leverage it further with additional policy efforts to boost private climate finance,” OECD Secretary-General Mathias Cormann said.

However, Singh says it not just about the numbers; it’s about integrity and genuine support and as we stand today, the financial needs of developing countries for transitioning away from fossil fuels and dealing with climate impacts have skyrocketed into the trillions.
“This isn’t the time for creative accounting or fiscal loopholes. Rich countries urgently need to step up, clear these smokescreens, and deliver real, substantial financial support. The clock is ticking, and our actions now will determine the fate of countless lives and ecosystems that depend on this support,” says Singh.

The OECD figures also show an uptick in climate finance destined for adaptation action. Following a small drop in 2021, adaptation finance reached $32.4 billion in 2022, three times the 2016 level.

The amount of public adaptation finance tracked by the OECD in 2019 was $18.8 billion and $20.3 billion with mobilised private finance included. Based on these figures, in 2022, developed countries were about halfway towards meeting the 2019 COP26 Glasgow Climate Pact’s call to double the provision of adaptation finance by 2025.