Rich countries overestimate the real value of climate finance

Rich countries say they mobilized nearly $116 billion for climate finance in 2022 - reaching for the first time the $100 billion a year target they pledged to help countries in the Global South cope with the impacts of the climate crisis. But Oxfam can show that almost 70% of this money was again given in the form of loans. Many of these loans require little or no financial effort from rich countries - they are provided at profitable market rates, adding to the debt of already vulnerable countries.

Oxfam estimates that the "real value" of climate finance given by rich countries in 2022 is only between 28 and 35 billion dollars.

Climate finance is a loaded issue in international climate negotiations. The gap between promise and reality continues to undermine the trust that countries need from each other. Finance itself is also vital - in many countries, it is what makes climate action possible in the first place.

"To put $35 billion into perspective, that's how much money fossil fuel companies make in just six days."

Nafkote Dabi, Climate Change Policy Manager Oxfam International

"Low- and middle-income countries should instead get most of the money through grants. Right now they are being doubly penalized. Firstly, by the consequences of the climate crisis that they have done little to cause, and secondly, by being forced to pay interest on the loans they have received to deal with them."

Nafkote Dabi, Climate Change Policy Manager Oxfam International

Governments meeting at COP29 in Azerbaijan later this year to adopt a new global climate finance agreement must not repeat the mistakes of the previous commitment, but instead ensure that rich countries provide significantly more finance and are made more accountable and their financing more transparent.