Climate finance provided and mobilised by developed countries for climate action in developing countries reached $83.3 billion in 2020, a new OECD analysis said on Friday.
This is a further four per cent increase from 2019 and followed a one per cent increase from 2018 to 2019.
However, it still falls short of the goal for developed countries to provide and mobilise $100 billion a year for developing countries by 2020. The increase in 2020 climate finance was primarily driven by a rise in public flows.
Aggregate Trends of Climate Finance Provided and Mobilised by Developed Countries in 2013-2020 is the OECD’s fifth annual assessment of progress towards the UNFCCC goal.
This year’s Aggregate Trends of Climate Finance Report is being released earlier than in previous years in order to contribute to the UNFCCC Standing Committee on Finance Report, being prepared for COP27, on progress towards achieving the goal.
“We know that more needs to be done. Climate finance grew between 2019 and 2020, but as we had expected, remained short of the increase needed to reach the $100 billion goal by 2020,” OECD Secretary-General Mathias Cormann said.
“While countries continue to grapple with the economic and social implications of the Covid-19 pandemic and Russia’s war of aggression against Ukraine, we are seeing climate change causing widespread adverse impacts and related losses and damages to nature and people.
“Developed countries need to continue to ramp up their efforts in line with their stated commitments in the lead-up to COP26, which would mean the $100 billion goal would be reached from next year. This is critical to building trust as we continue to deepen our multilateral response to climate change.”
Over the 2013-2020 period, public climate finance accounted for most of the total, increasing from $38 billion in 2013 to $68.3 billion in 2020.
Within that overall amount, multilateral flows grew by 138 per cent over 2013-20, while bilateral flows grew by 40 per cent.
Mobilised private climate finance, for which comparable data is only available from 2016, increased by almost 30 per cent over 2016-20, despite a drop between 2019 and 2020. The share of climate-related export credits in the total remains small.
The majority of climate finance in 2020 was directed at climate change mitigation efforts, but finance provided for adaptation action continued to grow, accounting for a third of the total.
Mitigation finance was mainly focused on energy and transport activities, while adaptation finance focused on activities in water supply and sanitation; and agriculture, forestry and fishing.
As was the case in previous years, in 2020 public climate finance mainly took the form of loans, accounting for 71 per cent of the total, which was up eight per cent in volume terms from 2019. The volume of public climate finance provided as grants also grew in absolute terms accounting for 26 per cent of the total.
Developing countries in Asia have been the main beneficiary of climate finance over 2016-20 with 42 per cent of the total on average, followed by Africa (26 per cent) and the Americas (17 per cent).