Rich countries 'short-changing' developing world with financial support to tackle climate change

Rather than the €107bn pledged in climate finance in 2022 to fund projects, the NGO said the true figure was closer to between €26bn and €32bn, given 70% of the money was given as loans provided at profitable market rates.

Oxfam said rich countries were being “duplicitous” around the financial support they were giving to the developing world to help countries cope with the effects of climate change provided at profitable market rates.

“To put this €32bn into perspective, that’s less than oil and gas corporations make in just six days,” said Oxfam Ireland’s head of policy and advocacy Michael McCarthy-Flynn.

Rich countries have been short-changing global south countries for years by doing climate finance on the cheap. Claims that they are now on track with their financial promises are overstated.

Oxfam said low-and-middle income countries were being penalised twice, firstly by the climate harm they did little to cause and then having to pay back interest on the loans they are given to try deal with this damage. It said most of the money should be given as grants instead.

Mr McCarthy Flynn said Ireland had done well in providing grant-based climate finance, but it had a “long way to go” in terms of the quantity of these grants.

He said while 20% of funding had been channelled into support that directly reaches communities, 65% goes to large multilateral organisations and international partnerships.

“In 2022, we paid €120m, when our ‘fair share’ has been estimated as €500m per year,” he said. 

"The Government’s own target was to reach €225m by 2025. We now call on the Government to pay our fair share and for greater transparency in how our contribution is being spent.” 

The claims come just a few months away from the Cop29 climate talks, being held in Azerbaijan this year.

Last month, it was reported countries could not agree on the size of a global funding bill to help the developing world fight climate change. It is hoped the conference will see an agreement on a funding package to fund projects that can help reduce emissions.

Representatives from climate-vulnerable nations said it was frustrating to watch wealthy nations fall late with past payments of climate finance while quickly approving new funds for military responses to war or spending billions subsidising CO2-emitting energy sources.

“It seems like money is always there when it’s a more ‘real’ national priority for the country,” said Michai Robertson, negotiator for the Alliance of Small Island States, which includes Caribbean, Pacific, and Indian Ocean nations. “It’s really tough to see that.”

Oxfam, meanwhile, has said the Cop29 conference and the new climate finance deal will be of critical importance to countries urgently in need of support given the impacts of climate change.

“Leaders must not repeat the mistakes of the previous commitment of $100bn per year but instead ensure that rich countries provide significantly more finance and are made more accountable and their financing more transparent,” it said.