Climate aid: Tories “changing the goalposts” to meet funding targets

Development minister Andrew Mitchell meets with prime minister Rishi Sunak.
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Over 70 non-profits have called out the UK government for “changing the goalposts” to meet its climate aid targets. Specifically, it has relabelled parts of its aid budget as international climate finance (ICF), typifying the Tories’ approach to supporting poorer climate-vulnerable countries.

Playing fast and loose with climate aid definitions

On 31 October, over 70 non-profit organisations from across multiple sectors – including environment, development, trade union, and disability rights bodies – penned a letter to the prime minister. In particular, the coalition’s demands pertained to the government’s recent announcement of changes to what it counts as part of its international climate finance (ICF).

The government provides ICF through three departments. It’s intended to help poorer countries mitigate or otherwise adapt to the impacts of the climate crisis.

On Friday 17 October, development minister Andrew Mitchell made a statement to outline the government’s progress on its ICF commitments. It demonstrated that instead of ramping up its climate finance, the government has redefined what it classes under its ICF.

Specifically, the government will now include climate-linked contributions to multilateral development banks (MDBs) in its accounting. Development minister Andrew Mitchell has defended the change by pointing out that other countries already count climate loans to MDBs among their ICF.

Climate Action Network UK’s (CAN-UK) executive director, Catherine Pettengell, branded it “an accounting exercise” that:

relabels existing spending instead of actually increasing the amount of money going to climate vulnerable countries.

Read on...

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CAN-UK added that it encourages a “race to the bottom on climate finance”, and stated that:

Justifying the change on the grounds that other countries count climate finance differently, exposes a failure of UK leadership.

International climate finance for private profits

A Canary investigation previously found that MDB-supported renewable energy projects have harmed communities. Specifically, they have caused displacement, land dispossession, and a host of other social and environmental issues. In particular, we identified this for over 40 wind, solar, and hydropower projects spanning the 20-year period between 2002 and 2022.

Crucially, the Canary noted that since the funding for MDBs like the World Bank:

is not earmarked, it isn’t possible to track which projects these funds support. The degrees of separation make it difficult to identify if the UK has funded these MDB-led projects that have violated human rights, or that local communities have resisted.

Given this, the government’s inclusion of its MDB financing in its ICF could raise serious accountability concerns.

What’s more, Mitchell laid out the government’s plans to funnel more ICF through British International Investment (BII), the UK’s national development finance institution. The Foreign and Commonwealth Development Office (FCDO) owns 100% of the shares in the company. The new ICF approach will include BII climate-related funding in its ICF spend.

Mitchell stated that the government will:

ensure that we maximise the opportunities presented by increasing climate investments through British International Investment (BII) and other private finance mobilisation programmes.

In other words, it plans to increase the amount of ICF benefitting the private sector – go figure.

Two separate Canary investigations have exposed BII projects for violating the human rights of communities in the Global South. Additionally, in September, the Canary’s Steve Topple highlighted an IDC report which found that:

BII’s investments sometimes conflict with the Paris Climate Change Agreement and the UK’s Sustainable Development Goals (SDGs).

In essence, the government’s new move will lavish the private sector with climate aid meant for poorer countries. Of course, the private sector’s pursuit of profits will likely eclipse its role in assisting communities address the challenges of climate breakdown – as previous cases have repeatedly shown.

Aid for ‘climate vulnerable communities’?

The government has implemented its classification changes to claim that it will meet a previous funding pledge. In 2019, at the United Nations (UN) general assembly in New York, Boris Johnson committed to double the UK’s ICF investments. Specifically, Johnson boasted that the Tories would boost their ICF spend to at least £11.6bn between 2021 and 2026.

However, according to a recent Carbon Brief analysis, the UK is £2bn – nearly 40% – off track of meeting this target. It attributed this to the Tories tampering with their Official Development Assistance (ODA) – otherwise referred to as ‘foreign aid’. ICF falls under the ODA umbrella, but is specifically directed towards climate challenges. Notably, the impact on ICF was felt because the government cut its overall foreign aid budget in 2020. It cited the need to redirect funds to address the at-home costs of the Covid-19 pandemic recovery.

On top of this, the Tories diverted a significant portion of their ODA to the UK government itself. In 2022, they funnelled 28.8% (£3.7bn) of their total ODA to housing refugees, directing funding for oversees aid into domestic budgets. A report by the parliamentary International Development Committee (IDC) in February noted that the government had channelled the bulk of this to its asylum hotel accommodation – the same hotel asylum housing scheme that has come under repeated fire for its inhumane conditions.

Moreover, a separate Guardian investigation in June found that the government has funded Turkey’s brutal border regime using ODA. In 2022 alone, it handed £3m in UK ODA to Erdogan’s oppressive government for its violent border security forces.

Far from fulfilling climate pledges

To make matters worse, the Tories have withdrawn ICF funding from communities on the frontlines of the climate crisis. Carbon Brief highlighted that the average annual spend over the 2021-2026 period would need to amount to £2.32bn to meet Johnson’s £11.6bn target. Instead, the government spent £1.46bn in 2021, and just £1.36bn in 2022. To date then, it’s far off hitting its ICF pledge.

Predictably, the Tories’ dubious accounting solution has gone some way to resolving this. It has meant that the government has piled on hundreds of millions of pounds to its reported spend for the past two years.

The 2021 ICF figure now sits at nearly £1.65bn. Meanwhile, the government announced its 2022 spend at £1.63bn. Using its new classification system, it has therefore added approximately £190m in 2021 and a staggering £270m in 2022 to its ICF spending – and all without raising its funding in real terms.

Ultimately though, the new ICF classifications will only serve to enrich corporations at the expense of poorer countries and international climate goals – just another day in private profiteer Britain. As ever, it’s frontline communities and people from the Global South who will lose out.

Feature image via UK Government/Wikimedia, cropped and resized to 1910 by 1000, licensed under CC BY 2.0

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