Revealed: US and UK fall billions short of ‘fair share’ of climate funding

Exclusive: Support for developing countries will be critical issue at Cop27 but new data shows rich countries are lagging

The US, UK, Canada and Australia have fallen billions of dollars short of their “fair share” of climate funding for developing countries, analysis shows.

The assessment, by Carbon Brief, compares the share of international climate finance provided by rich countries with their share of carbon emissions to date, a measure of their responsibility for the climate crisis.

Rich countries pledged to provide US$100bn a year by 2020, although this target has been missed. The US share of this, based on its past emissions, would be $40bn yet it provided only $7.6bn in 2020, the latest year for which data is available. Australia and Canada gave only about a third of the funding indicated by the analysis, while the UK supplied three-quarters but still fell $1.4bn short.

The issue of climate finance will be critical to progress at the Cop27 summit, which began on Sunday in Egypt. Developing countries did little to cause the climate emergency, making funding from rich countries vital to create the trust needed for combined global action. The rich countries accept vulnerable countries face a “life or death situation” and need far more than $100bn but delivery of the money has been contentious and slow.

The $100bn was intended to support the cutting of carbon emissions and work to adapt communities to the increasingly extreme weather being driven by global heating. However, a series of reports last week have laid bare how close the planet is to climate catastrophe, with “no credible pathway [of carbon cuts] to 1.5C in place”, the internationally agreed temperature limit to avoid the worst of the climate crisis.

On funding for adaptation, the UN secretary general, António Guterres, said on Thursday: “We need a global surge in adaptation investment to save millions of lives from climate carnage.” However, some climate impacts are so severe they cannot be adapted to, and at Cop27 vulnerable nations will demand progress on “loss and damage” funding to rebuild after disasters. Rich countries have rejected such appeals in the past, fearing unlimited liability.

The new analysis covers the 24 “Annex II” countries that account for 40% of historical emissions and are obliged to give climate finance under the UN climate treaty, including all of the G7 large economies. It shows some countries gave more than the share of the $100bn indicated by their past emissions.

Switzerland’s funding was more than four times higher, and France and Norway’s was more than three times the amount. Japan, one of the largest providers of funding, supplied $13bn, more than double the amount indicated. However, the funding from Japan and France was largely in loans, whereas that from the US, Canada, Australia and the UK were mostly grants. Grants are strongly preferred by developing countries, which often already carry high levels of debt.

Mohamed Nasheed, the former president of the Maldives, said: “Basic justice demands that those most responsible for causing the climate crisis should financially support those who are suffering most on the frontline of climate change. Every year we see the storms get stronger and the waves get higher.”

“Our analysis for the V20 group of most climate-vulnerable nations finds that our countries have already suffered $500bn in losses because of climate impacts,” Nasheed told the Guardian.

“Currently we face a debt crisis because so many of the assets that we took loans to pay for are being destroyed by climate change. Ease the debt burden and we can all play our part.” The V20 represents 1.5 billion people in 58 vulnerable countries.

Eddy Pérez, a director at Climate Action Network Canada, said: “Canada, the US and Australia have accumulated a huge debt to developing countries. This is an absolute scandal. These wealthy polluters have not only contributed very little to climate finance but are also partly responsible for the increase of international fossil fuels finance.”

Nafkote Dabi, the climate change policy lead at Oxfam International, said: “This new analysis shows rich countries continue to fail to deliver their long-standing pledge of $100bn a year. The failure is all the more stark when you consider that the $100bn is minuscule compared to what is required to address the climate crisis.

“Rich countries are largely responsible for the climate crisis – they must be held accountable for providing their fair share of climate finance.”

A progress report on delivery of the $100bn was published in the run-up to Cop27 by the governments of Germany and Canada. “It is abundantly clear that the global investments needed to respond to the climate change threat are much larger than $100bn and that we need to turn our attention to setting an effective post-2025 climate finance goal,” say Germany’s special envoy for international climate action, Jennifer Morgan, and Canada’s climate change minister, Steven Guilbeault, in the foreword.

“There is no question that the needs are immense and that for the most vulnerable countries averting, minimising and addressing loss and damage is not an option, it is a life or death situation,” they say.

The progress report found only five countries – Japan, Italy, the Netherlands, Norway and Sweden – had increased their funding pledges since 2021. The Cop26 president, Alok Sharma, who commissioned the report, said trillions of dollars would be needed overall.

Responding to the analysis, a spokesperson for the Canadian government said: “Canada remains steadfast in its commitment to work with others to reach the collective US$100bn goal as soon as possible and through to 2025. Canada recognises the urgency of scaling up climate finance. That is why Canada is doubling its international climate finance to $5.3bn over the five-year period, starting in 2021.”

The US, UK and Australian governments did not respond to requests for comment. The UK government was recently criticised for failing to pay $300m in promised climate funds before Cop27.

“As has always been the case since this [UN] process started in 1992 in Rio, the critical enabling factor for delivery on climate promises is finance,” said Alden Meyer, at the E3G thinktank.

Rachel Simon, at Climate Action Network Europe, said: “The world is watching and the clock is ticking. We will be holding governments to account at Cop27 to ensure they get on the right track. The money is there – it’s a question of political will.”

cover photo: Avaaz activists at Cop26 in Glasgow, Scotland, last year. The group promotes global activism on various issues including the climate crisis. Composite: Guardian Design/Reuters