The Future is Equal


True value of climate finance is a third of what developed countries report

Reporting international climate finance remains flawed, and profoundly unfair.

Many rich countries are using dishonest and misleading accounting to inflate their climate finance contributions to developing countries – in 2020 by as much as 225 percent, according to investigations by Oxfam.

Oxfam estimates between just US$21-24.5 billion as the “true value” of climate finance provided in 2020, against a reported figure of US$68.3 billion in public finance that rich countries said was provided (alongside mobilised private finance bringing the total to US$83.3 billion). The global climate finance target is supposed to be US$100 billion a year.

“Rich country contributions not only continue to fall miserably below their promised goal but are also very misleading in often counting the wrong things in the wrong way. They’re overstating their own generosity by painting a rosy picture that obscures how much is really going to poor countries,” said Nafkote Dabi, Oxfam International Climate Policy Lead.

“Our global climate finance is a broken train: drastically flawed and putting us at risk of reaching a catastrophic destination. There are too many loans indebting poor countries that are already struggling to cope with climatic shocks. There is too much dishonest and shady reporting. The result is the most vulnerable countries remaining ill-prepared to face the wrath of the climate crisis,” says Dabi.

Oxfam research found that instruments such as loans are being reported at face value, ignoring repayments and other factors. Too often funded projects have less climate-focus than reported, making the net value of support specifically aiming at climate action significantly lower than actual reported climate finance figures. 

Currently, loans are dominating over 70 percent provision (US$48.6 billion) of public climate finance, adding to the debt crisis across developing countries.

“To force poor countries to repay a loan to cope with a climate crisis they hardly caused is profoundly unfair. 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,” said Dabi.

Least Developed Countries’ external debt repayments reached US$31bn in 2020.

For example, Senegal, which sits in the bottom third of the world’s most vulnerable countries to climate change, received 85 percent of its climate finance in form of debt (29 percent being non-concessional loans), despite being at moderate risk of falling into debt distress and with its debt amounting to 62.4 percent of its Gross National Income.       

“A keyway to prevent a full-scale climate catastrophe is for developed nations to fulfil their US$100 billion commitments and genuinely address the current climate financing accounting holes. Manipulating the system will only mean poor nations, least responsible for the climate crisis, footing the climate bill,” said Dabi.

“A climate finance system that is primarily based on loans is only worsening the problem. Rich nations, especially the heaviest-polluting ones, have a moral responsibility to provide alternative forms of climate financing, above all grants, to help impacted countries cope and develop in a low carbon way,” said Dabi.

“At the upcoming COP27 climate talks this November, rich countries must urgently commit to scaling up grant-based support to vulnerable countries and to fixing their flawed reporting practices.”

Notes to the editor

  • Download a full copy of the report, Climate Finance Short Changed Report 2022: The real value of the US$100 billion commitment in 2019-20, here:
  • The 2020 reported climate finance totalling US$83.3 billion included public finance (US$68.3 billion), private finance mobilised (US$13.1 billion) and export credits (US$1.9 billion) in 2020. Oxfam has assessed the value of finance provided, IE the public finance element. OECD (2022), Climate Finance Provided and Mobilised by Developed Countries in 2016-2020: Insights from Disaggregated Analysis, Climate Finance and the USD 100 Billion Goal, OECD Publishing, Paris,
  • Overreporting of loans is incentivising the use of loans which are dominating climate finance provision. According to the latest assessment by the OECD, loans made up 71 percent of public climate finance in 2019-20– a significant share of which were non-concessional – while only 26 percent was provided as grants.[i]  [i] OECD (2022a), Climate Finance Provided and Mobilised by Developed Countries in 2016-2020: Insights from Disaggregated Analysis, Climate Finance and the USD 100 Billion Goal, OECD Publishing, Paris.
  • Oxfam’s US$21-24.5 billion figure includes the estimated grant equivalent of reported climate finance rather than the face value of loans and other non-grant instruments. It also accounts for overreporting of climate finance where action to combat climate change is one part of a broader development project. For more details please check Oxfam methodology note.
  • Senegal’s debt instrument figures are based on 2013-2018 climate finance reports, according to Oxfam “Climate Finance in West Africa” report, 2022. Please also see (2021). Climate Change: OECD DAC External Development Finance Statistics – Recipient Perspective. Retrieved 10 August 2022.
  • Senegal ranks Senegal is 134th out of 182, or in the bottom 30 percent in terms of vulnerability according to the ND-GAIN Index.

Oxfam reacts to Government’s farmgate emissions pricing system

In reaction to the Government’s farmgate emissions pricing system, Oxfam Aotearoa climate justice lead Nick Henry says: 

“A system for pricing agricultural emissions is starting to shape, but there are some major holes that need filing if Aotearoa is to do its part in keeping global warming to 1.5 degrees. Farming is responsible for almost half of New Zealand’s emissions. The system must be transparent, fair and effectively reduce emissions. 

“The governments proposed cautious approach does little to help people across the Pacific and beyond to keep their homes and their livelihoods. This is not a business deal; this is our future.   

“We already know what it is going to take to tackle agriculture emissions: we need an effective system to price and reduce emissions, with support to turn around the farming sector from being Aotearoa’s biggest polluter, into a solution for tackling climate change and restoring nature. That involves a phase out of synthetic nitrogen fertiliser, and investing billions to support agriculture to transition to low emissions and regenerative agriculture.” 

Oxfam responds to New Zealand International Climate Finance Strategy – Tuia te Waka a Kiwa

In response to Foreign Minister Nanaia Mahuta and Climate Change Minister James Shaw’s Aotearoa New Zealand International Climate Finance Strategy – Tuia te Waka a Kiwa, Oxfam Aotearoa Communications and Advocacy Director Dr Jo Spratt said:

“This is a substantial piece of work that was well-consulted, carefully considered and provides a solid framework to guide significant investment from the New Zealand Government. We are pleased to see a Pacific-led approach that makes way for our Pacific whānau to build climate resilience on their own terms.

“We are also pleased to see the Government acknowledge that too often communities are not included in how climate finance is allocated, and Minister Mahuta and Minister Shaw’s willingness to make sure communities are able to benefit from it. It is good to see a focus on equity and inclusion for the people who are so often left out and left behind.

“It is excellent to see recognition of both the economic and non-economic costs of climate destruction that communities cannot adapt to and the willingness of Aotearoa to promote countries’ access to finance to address loss and damage. We look forward to engaging with the Government on this in the lead-up to COP27 where loss and damage will be a focus. Other mechanisms, not just mitigation and adaptation, will be necessary to address the unavoidable loss and damage people in the Pacific and beyond face every day.”

Oxfam reacts to Commission’s advice on the New Zealand Emissions Trading Scheme

Oxfam Aotearoa welcomes the latest advice from the Climate Change Commission to the Government calling for an urgent decision about how it will prioritise emissions reduction in the New Zealand Emissions Trading Scheme (NZ ETS). Oxfam Aotearoa Interim Executive Director Dr Jo Sprat said: 

“The Commission is on the right track: All sectors of Aotearoa’s economy, including agriculture, need to do their fair share in reducing climate pollution. 

“Aotearoa can’t just rely on planting permanent pine forests, or paying other countries to reduce emissions for us. The role of international carbon credits and carbon off-setting, including whether these will be integrated into the ETS or kept separate is as clear as mud. The Government must urgently provide clarity, just as the Commission recommends.  

“What also concerns us is how the Government will make sure human rights are upheld, including indigenous and community land rights. If it is not done right, using international credits as an alternative to reducing our own carbon emissions from industries like agriculture could do serious harm to communities – especially those on the frontlines, such as our Pacific friends and family who experience the worst impacts of climate destruction every day. 

“The Commission’s advice underscores the urgent need for a comprehensive plan for a just transition, in consultation with tangata whenua and all communities, to support a move to a less polluting and more equitable economy in Aotearoa. We couldn’t agree more. A just transition would make sure the rising cost of carbon pollution in the NZ ETS doesn’t unfairly fall on those least able to pay.” 

Oxfam’s verdict on the COP26 outcome

Gabriela Bucher, Oxfam International Executive Director said:

“Clearly some world leaders think they aren’t living on the same planet as the rest of us. It seems no amount of fires, rising sea levels or droughts will bring them to their senses to stop increasing emissions at the expense of humanity.

“Punishing, extreme weather is already wrecking the lives of the most vulnerable. People are barely clinging on, having little resources to cope with the constant threat of losing all that they own. The world’s poorest have done the least to cause the climate emergency, yet are the ones left struggling to survive while also footing the bill.

“The request to strengthen 2030 reduction targets by next year is an important step. The work starts now. Big emitters, especially rich countries, must heed the call and align their targets to give us the best possible chance of keeping 1.5 degrees within reach. Despite years of talks, emissions continue to rise, and we are dangerously close to losing this race against time.

“Developing countries, representing over 6 billion people, put forward a loss and damage finance facility to build back in the aftermath of extreme weather events linked to climate change. Not only did rich countries block this, all they would agree to is limited funding for technical assistance and a ‘dialogue’. This derisory outcome is tone deaf to the suffering of millions of people both now and in the future.

“For the first time, a goal for adaptation finance was agreed. The commitment to double is below what developing countries asked for and need, but if realised it will increase support to developing countries by billions.  

“It’s painful that diplomatic efforts have once more failed to meet the scale of this crisis. But we should draw strength from the growing movement of people around the world challenging and holding our governments to account for everything we hold dear.  A better world is possible. With creativity, with bravery, we can and must hold onto that belief.”

Oxfam Aotearoa: Fossil of the Day award “embarrassing”

Oxfam Aotearoa has criticised the New Zealand government for winning the runner up for the “Fossil of the Day” award that Minister James Shaw received at COP26 overnight. The award, presented by the Climate Action Network (CAN), is given to the nation who has hindered COP26 negotiations the most. Oxfam Aotearoa Campaign Lead Alex Johnston said:

“It is embarrassing that our government is receiving such an ‘award’ on a global stage. This is not a good representation of Kiwis; this is not our kaupapa.”

CAN pointed out that the New Zealand government put out a revised Nationally Determined Contribution (NDC) the night before COP, which Oxfam Aotearoa and other organisations said was inconsistent with the Paris Agreement due to its unambitious 2030 target. Oxfam previously reprimanded the updated NDC saying that it relies heavily on paying other countries to do the work for us. As CAN said in their release put out today:

“[Minister Shaw] said that just because a refreshing of the NDC has been asked of countries ‘it doesn’t mean we have to’. This comes from a country that gives off the ‘greener than thou’ vibe at the drop of a hobbits hat. Maybe we shouldn’t be surprised when it was brought to our attention that he’s also the guy who put out a revised NDC the night before COP. That one wasn’t worth the wait, unfortunately.  Civil society commentators widely regarded it as a Grade A hatchet job, inconsistent with Paris temperature goals, wholly unambitious on 2030 target and relying heavily on carbon markets.”

Johnston says that the New Zealand government can’t tell other countries to close the ambition gap for 1.5 degrees if we are not willing to do that ourselves:

“The government’s delay to the Emissions Reduction Plan means we are falling further and further behind. We also can’t call for transparency when our NDC hides the fact that domestic emissions will only be cut by around 7-9% below 2005 levels by 2030 on a net-net basis.

“For Minister Shaw to undermine the encouragement to return with greater NDCs in 2022 before the final text has been agreed is extremely disappointing. It’s a reflection of the laggard pace of our domestic action. Each day we delay bolder action means more people go hungry, lose their homes and die.

“Minister Shaw needs to come back from Glasgow with the clear message: Aotearoa New Zealand must scale up our domestic response and increase ambition each year until we are doing our fair share to keep global heating to 1.5 degrees.”