Climate finance is yet to deliver for the most vulnerable people

Climate change threatens the goal to sustainably end poverty. This is a well-recognised fact, and in 2015, the UN’s vision for the future, Agenda 2030, brought together sustainability and development, with SDG 13 requiring signatories to take urgent action to combat climate change and its impacts.

More and more people are negatively impacted by climate-related events, and almost half of the global population living in extreme poverty are in countries vulnerable to climate change. The world’s poorest people are too often the first and worst victims of climate change, and the least resilient to its effects. Climate change not only puts progress towards ending extreme poverty at risk by undermining development gains and programmes, but also threatens to create new forms of poverty, particularly for vulnerable or marginalised people: for example, women are disproportionally affected by both poverty and by the effects of climate change.

However, while there is much talk about putting the most vulnerable people front and centre, action on climate change is not clearly delivering on the ambition to reach the most vulnerable and to leave no one behind. One area where more could be done is climate finance – the investments we make for adapting to and mitigating the worst effects of climate change. In 2017 (the latest year for which there is data) climate finance from developed countries to fund climate action in developing countries reached US$71.2 billion, according to the Organisation for Economic Co-operation and Development (though that includes some US$15 billion of ‘mobilised’ private finance). This remains some way off the US$100 billion a year by 2020 promised at COP 15 in 2009. Meeting this commitment is critical, and targeting and using that money effectively and efficiently will maximise it’s impact. And there are some serious issues to consider there.

Climate finance globally is not targeting the most vulnerable people and places

We know from Development Initiatives’ previous in-depth analysis on the allocation of international public climate finance that investments did not prioritise the most vulnerable people and places, nor did it prioritise the greatest need. Key takeaways from that analysis were that:

• Allocation of climate finance was highly concentrated: 36% of support to developing countries went to just five – India, Turkey, Morocco, Brazil and Bangladesh.
• Allocation of adaptation finance did not prioritise the countries most vulnerable to the impacts of climate change: in 2014, total adaptation approvals (finance that has been officially approved, though not necessarily disbursed) were highest to the 49 countries with mid-range vulnerability scores. Some of the most vulnerable countries, such as Eritrea, Guinea-Bissau, Sierra Leone and Liberia, received particularly little (and all were fragile contexts – highlighting the particular challenges of overlapping vulnerabilities and forms of crisis).
• The 14 countries with the deepest levels of poverty (over 20%), received among the lowest amounts of adaptation finance – an average of US$56 million per country, compared to an average of US$73 million in 67 countries with poverty depths of less than 5%. Support was especially low to Micronesia, Lesotho and Togo.

Investing in data will allow climate finance to have greater impact for those most in need

To get climate finance investments right, we need much better data on vulnerable people and what will make them more resilient.

The first requirement involves making sure vulnerable people are counted. We know that those most vulnerable to the negative impacts of climate change are often the least likely to be officially counted. Even the most basic information on the poorest populations is lacking: 55% of the poorest 20% of people globally do not have their birth registered, and so often cannot access even basic healthcare, education, services and support. More specifically, we know that the most vulnerable subsections of society are the least likely to be included and yet the hardest hit; for example, data on people with disabilities is often lacking, yet people with disabilities are far more likely to be adversely affected by crisis.

The second requirement for better data is around what investments work. Flexible support in the form of cash transfers and remittances has been proven to help recipients better meet their basic needs, diversify their incomes and invest in assets that enable them to cope far better when facing climate-related challenges. Key informant interviews performed as part of DI’s study on resilience in Somalia highlighted that during the 2019 drought, individuals’ resilience was enhanced by the ability to access alternative forms of income. Increasing the data available about how people seek alternative income during crisis, and knowing what support they require to do so, could have a huge impact on the population during future crises.

So, we have a big task at hand. Climate finance needs to target the most vulnerable people, and it is likely that this will require refocusing current spending. Urgent and significant investment in data on people, and in the support and interventions that have the best impact on building their resilience, will help ensure this funding is spent well. With the right action from those who are committed to combatting climate change and its effects, there are huge gains to be made in a relatively short space of time.

Photo: Olaf Zerbock, USAID. Women fishing in the Terai region of Nepal. The USAID Paani program will enhance Nepal’s ability to manage water resources for multiple uses and users through climate change adaptation and the conservation of freshwater biodiversity.