Rich nations use ‘dishonest’ climate finance claims, Oxfam says

RICH countries are falling well-short of their climate finance commitments to poor countries and are using “misleading” and “dishonest” accounting to inflate how much they are providing, just weeks before key talks, according to a new report.

Wealthy nations provided less than US$25 billion in public finance in 2020, compared with the almost US$70 billion they announced, Oxfam International said. The non-profit found that much of the money is being delivered through loans, which force countries further into debt, while the funds that are provided often have less of a climate focus than stated.

“Rich country contributions not only continue to fall miserably below their promised goal but are also very misleading,” Nafkote Dabi, Oxfam’s climate policy lead, said in a statement. “Instead of supporting countries that are facing worsening droughts, cyclones and flooding, rich countries are crippling their ability to cope with the next shock and deepening their poverty.”

With rich countries still falling short of their pledge to provide US$100 billion of climate finance a year – a goal that was supposed to be achieved in 2020 – the report’s findings have the potential to further erode trust with poor nations who are bearing the brunt of extreme weather events. Finance to help island states and least-developed countries is set to be one of the major issues at the COP27 climate summit in Egypt next month.

Oxfam’s report highlights the case of Senegal, which is one of the most vulnerable countries to climate change, yet it received 85% of its finance in the form of debt. Overall, debt repayments by least developed nations climbed to US$31 billion in 2020, according to the non-profit.

At the climate talks in November, countries are set to grapple with how to boost finance goals from billions of dollars to the trillions that developing nations say are needed to really deal with the impacts of climate change. Developing nations also want a designated fund to address the loss and damage caused by increasingly extreme weather, which have largely come about due to historic emissions of rich countries.

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Mia Mottley, the prime minister of Barbados, has been leading calls for debt forgiveness to help poorer countries deal with the effects of climate change.

Dabi said a “climate finance system that is primarily based on loans is only worsening the problem.”

“Rich countries must urgently commit to scaling up grant-based support to vulnerable countries and to fixing their flawed reporting practices,” she said. BLOOMBERG