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Rich nations ‘hugely exaggerate’ climate adaptation funding for developing nations

Funding for climate adaptation projects to help vulnerable communities cope with climate change impacts was inflated by 42 per cent, translating to US$20 billion over 5 years, a report by CARE International has revealed.

Rich countries and institutions have over-reported funding to help developing countries adapt to the impacts of climate change, leaving vulnerable communities underfunded, a report by non-profit organisation CARE International has found 

In 2009, developed countries pledged to scale up financial resources for developing nations by providing $100 billion annually by 2020—to be split evenly between mitigation and adaptation projects. 

According to Organisation for Economic Co-operation and Development (OECD), a group of wealthy countries, donors had only committed $16.8 billion in 2018 to annual climate adaptation finance, a far cry from the original goal of $50 billion. 

Not only have rich nations let countries in the Global South down by failing to deliver enough adaptation finance, but they have tried to give the impression that they are providing more than they do. It is truly embarrassing.

John Nordbo, senior advocacy adviser, CARE Denmark

The report found that in the true figure is even lower. After factoring in inflation by developed nationsonly $9.7 billion was donated that year.

“The world’s poorest people are not responsible for the climate crisis yet are the hardest hit. Not only have rich nations let countries in the Global South down by failing to deliver enough adaptation finance, but they have tried to give the impression that they are providing more than they do. It is truly embarrassing,” said John Nordbo, senior advocacy adviser at CARE Denmark and co-author of the report.  

CARE International and its partner organisations in Southeast Asia and Africa assessed 112 climate adaptation projects funded by 25 donor nations, representing 13 per cent of total global adaptation finance between 2013-17. 

The research found that funding for these projects was over-reported by 42 per cent, which applied to the remaining projects across the world, would result in over-reporting by $20 billion during the same period.  

Donors over-reported their climate finance in several ways—by including projects not related to adaptation at all and by exaggerating the adaptation component of their projects. 

For example, Japan—the worst offender—over-reported its climate adaptation finance by over $1.3 billion by including construction projects such as the ‘Nhat-Tan Friendship Bridge’ and the ‘North-South Expressway Construction Project’ in Vietnam. 

Instead of climate adaptation, the aims of these projects were to ease traffic congestion and improve logistical efficiency.  

The World Bank also over-reported its funding by $832 million in total, by including an Earthquake Housing Reconstruction Project’ in Nepal. Although the project is primarily a response to a geohazard unrelated to climate change, 86 per cent of its budget was reported as finance for climate adaptation. 

Gender equality and poverty reduction mere rhetoric 

While climate adaptation is inherently interconnected with broader development goals and poverty alleviationthe report found that gender and poverty considerations were largely symbolic in many projects.  

Although research has shown that empowering women could help societies adapt more quickly and easily to the impacts of climate change, the report revealed that 47 per cent of adaptation projects in the countries assessed did not consider gender equality. 

Of further concern is that the largest financial provisions often failed to consider the poorest in society. The report found that many development projects were financed in the form of loans with interest rates that profited the providers, rather than grants. 

For projects assessed in Ghana and Ethiopia—both at high risk of debt distress—28 per cent and 50 per cent of total finance contributions, respectively, were provided as loans. 

“This is not just about the numbers. It’s about millions of vulnerable people risking their lives in ever more frequent climate disasters. It’s about restoring people’s faith in climate governance. $50 billion or more is really not a high price to pay for this – if we do this together,” said Bart Weijs, programme manager at CARE Netherlands and co-author of the report.  

Earlier this month, the United Nations Environment Programme warned that annual adaptation costs in developing countries could reach $300 billion in 2030

The report calls on donors to stop the over-reporting of adaptation finance, to ensure loans for adaptation do not exacerbate debt distress and to increase transparency of adaptation finance reporting, with gender equality and poverty reduction integrated in adaptation activities. 

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