Climate finance for developing countries reaches $71 billion
Climate finance provided and mobilized by developed countries for climate action in developing countries reached $71.2 billion in 2017, up from $58.6 billion in 2016, according to new estimates from the OECD.
While the 2016 and 2017 totals cannot be directly compared with earlier years due to improvements in data and methodology relating to private finance, Climate Finance Provided and Mobilized by Developed Countries in 2013-17 shows the overall trend is upwards.
“The goal to reach USD 100 billion in annual climate finance by 2020 is still attainable, but we must urgently step up our efforts to provide public climate finance and improve its effectiveness in mobilizing private finance,” said OECD Secretary-General Angel Gurría.
The report gives estimates for mobilized private finance and public flows (estimates on public flows were already published in November 2018). It shows public climate finance is increasing again, after stalling in 2015, and is consistent with projections made by the OECD in 2016. Estimates of private finance in 2016-17 suggest that more needs to be done.
“Our estimates for 2013-2017 show that developed countries are making progress on climate finance and the indications are that this upward trend will continue. Multilateral development banks are reporting a significant rise in their climate finance outflows in 2018, which we will be analyzing as soon as their activity-level data is available to us,” said Mr Gurría.
The amount of climate finance going to adaptation activities rose to $13.3 billion in 2017 from $9.1 billion in 2013, meaning adaptation now accounts for 19% of total climate finance, up from 17% in 2013. The share of climate finance going to mitigation activities was 73% in 2017, compared to 76% in 2013, with the rest going to crosscutting activities.
For public climate finance, the ratio of grants to loans was relatively stable over 2013-17. Grants made up over a third of bilateral and about 10% of multilateral finance, while loans represented 60% of bilateral and nearly 90% of multilateral finance. The share of grants in public climate finance in 2016-17 is higher for least-developed countries (36%) and small-island developing states (54%) than for developing countries as a whole (24%).
The private component of climate finance consists of private funding for climate projects mobilized by developed countries’ public climate finance instruments. These include investments in companies and special purpose vehicles, loan guarantees, credit lines, loan syndications and co-financing schemes.
The public component consists of bilateral climate finance and multilateral climate finance attributable to developed countries. Officially supported climate-related export credits are accounted for as a separate component.
Climate finance will be among the issues discussed at the upcoming UN Climate Summit in New York and in the run-up to the COP25 climate talks in Santiago de Chile.