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In March 2021, the UK Government said “tackling climate change and biodiversity loss is its number one” international priority in 2021 and beyond. It says it intends to apply its diplomatic, development, and economic efforts to secure reductions in global emissions and support lower-income countries adapt to climate change. The forthcoming climate conference, COP 26, which the UK will host, offers an opportunity to advance these goals.

This briefing summarises the potential effects of climate change on the development needs of lower income countries. It also looks at the prioritisation of climate change in UK aid policy, aid spending, and its effectiveness in helping vulnerable states respond to climate change.

How climate change affects development goals

In August 2021, the Intergovernmental Panel on Climate Change (IPCC) published its latest report on the physical science of climate change. It concluded that climate change is already affecting every inhabited region in the world. Its effects depend on the extent of temperature rises. The IPCC said that, with high confidence, these were likely to include more intense flooding in Africa and Asia, increased aridity (degree of dryness) in the Amazon, and sea level rises threatening delta areas in Asia as well as small islands.

How climate change affects the development needs of countries will also vary. The poorest and least-developed countries (as defined by the UN) are considered among the most vulnerable to climate change. Potential challenges include greater water scarcity and lower crop yields, leading to 1-183 million additional people being at risk of hunger by 2050. The World Bank has estimated that up to 132 million will be pushed into extreme poverty by climate change by 2030.

While lower-income countries are among the most vulnerable to climate change, it is middle-income economies that currently have the largest per capita increases in CO2 emissions (though these are still below emissions per capita seen in higher income countries). According to the International Development Committee’s UK aid for combatting climate change report, this creates a tension in aid spending: Whether to prioritise countries most vulnerable to the effects of climate change, or those that need support to lower their carbon emissions.

UK aid priorities on climate change

Tackling climate change and biodiversity loss is one of the seven Foreign, Commonwealth and Development Office (FCDO) priorities for UK aid spending in 2021/22. The Department has allocated £534 million for climate change and biodiversity in 2021/22. The final figure is likely to be higher, with £3,159 million of its budget allocated to cross-cutting themes.

In 2019, the Government announced that all UK ODA would be aligned with the objectives of the 2015 Paris Agreement on climate change. This means, for example, that all ODA spending will contribute to the stabilisation of greenhouse gas emissions at a safe level. In October 2021, the Independent Commission for Aid Impact’s rapid review said there had been a lack of progress towards this goal, and recommended targets be set in the forthcoming aid strategy, which is expected later in 2021.

ODA refers to aid intended to promote the economic development and welfare of developing countries. This aid must be reported to the Organisation for Economic Cooperation and Development. 

UK aid spending

There are no specific data for UK ODA spending on climate change. This is because it is treated as a cross-cutting theme for data reporting. Below are two methods used. Both provide only a partial view.

From 2013 to 2019, the UK reported to the EU its level of climate-related aid.  This was £1,184 million in 2019. The highest was £1,254 million in 2015. Alternatively, using statistics published by the FCDO relating to “general environmental protection” and “energy sources, renewable sources” for 2015 to 2020, spending on these two issues was highest in 2015, at £540 million. Spending was lowest in 2020, at £306 million.

Climate finance to developing countries

In 2009, developed countries with high greenhouse gas emissions jointly committed to mobilise at least US$ 100 billion a year from public and private sources by 2020. This is to help developing countries adapt to climate change. Known as ‘climate finance’, this could be as loans, grants, and export credits. The Library’s COP 26: Delivering on $100 billion climate finance provides more information.

From 2015/16 to 2020/21, the UK committed at least £5.8 billion in international climate finance (ICF). In September 2019, the Government said funding will double to £11.6 billion between 2021/22 and 2025/26.

Multilateral development banks and climate change

Around half of UK ICF from 2016/17 to 2020/21 was spent through multilateral bodies, such as multilateral development banks (MDBs). Their role has been criticised, because lower-income countries sometimes face challenges to accessing their finance and their wider investments in fossil fuels undermines the Paris Agreement.

The Government has sought to use its influence as a shareholder in MDBs to encourage them reform their policies. In June 2021, the World Bank committed that at least 35% of its financing will have climate benefits by 2025.

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