Huge gaps in climate finance for conflict-ravaged countries - Oxfam

A report published today by Oxfam highlights the huge climate finance funding gap for countries mired in conflict and how over half of climate finance risks pushing fragile states into more debt.

While climate finance levels around the world are already woefully insufficient to keep global warming below 1.5°C or protect people from the devastating impacts of climate breakdown, the share of total climate finance provided to fragile and conflict-affected states between 2019 and 2020 was on average $13.64 per person per year compared to $22.77 per person for non-fragile countries. The number drops to as little as $6.68 per person per year in countries in active conflict, leaving conflict-ravaged communities exposed to deadly climate breakdown.

Huge climate financing disparities also exist between fragile and conflict-affected states. At the higher end of the scale, Tuvalu received roughly $1,083 per person per year, while Syria received just $0.67 per person per year. Overall, the amount of climate finance provided to these climate-vulnerable countries is far below what they need.

Chiara Liguori, Oxfam GB senior climate justice policy adviser said: “Climate breakdown is adding disaster on top of disaster for people already struggling for survival. These are countries with some of the lowest responsibility for emissions and least ready to deal with climate impacts.”

Oxfam’s research finds that more than half of funding provided to fragile and conflict affected states came in the form of loans and other forms of debt-inducing financing that will sink them further into debt. In 2022, 78 per cent (29 countries) of fragile and conflict affected states were classified at medium to high risk of debt distress, yet almost 10 per cent of climate finance provided to them came in the form of non-concessional loans, without any preferential terms such as low interest rates or longer grace period for repayments. Over 41 per cent came in the form of concessional loans, which are loans with these preferential terms.

Oxfam estimates that two billion people, a quarter of humanity, live in countries that should not be forced to borrow further due to their levels of existing debt which could lead to further cuts in public spending with devastating consequences for people already living in poverty.

Liguori said: “Climate finance should not be a debt trap for vulnerable countries. Fragile and conflict-affected states should not be paying back rich countries to protect themselves from a crisis they did not create.

“It’s time to shift away from old funding models which cater to the preferences of donors, and towards solutions based on the needs of affected countries and communities. We need a new era of climate financing, one that empowers local voices with direct access to grant-based finance and ensures sustainable, long-lasting change.”

The majority of fragile and conflict affected states are classified as being some of the worst impacted by, yet least ready to respond to, climate-fuelled disasters. In Burkina Faso, not only is there a climate emergency, but also compounding food and insecurity crises with two million people internally displaced. It is communities experiencing conflict that are the hardest to reach as donors are reluctant to provide financing due to access issues, repayment concerns, and security risks.

Oxfam is calling for more climate funding for fragile and conflict affected states in the form of grants to build resilience and funding for climate action to better reflect the situation in the country.

/ENDS

Notes to editors:

The report, Forgotten Frontlines: Looking at the climate finance going to fragile and conflict affected states in 2019-20, is available here

The report analyses climate finance provided to 37 fragile and conflict affected states (FCAS) in 2019-20.

More than half (57 percent) of the world’s poorest countries, home to 2.4 billion people, are having to cut public spending by a combined $229 billion over the next five years.

Further reading on Iraq and Syria’s climate-fuelled drought: https://www.worldweatherattribution.org/human-induced-climate-change-compounded-by-socio-economic-water-stressors-increased-severity-of-drought-in-syria-iraq-and-iran/

Further reading on the scoring of countries regarding their climate vulnerability and lack of readiness to respond to climate impacts: https://gain.nd.edu/our-work/country-index/

Further reading on stronger collaboration between humanitarian and climate finance: https://policy-practice.oxfam.org/resources/leaving-no-one-behind-a-green-bargain-for-people-and-planet-621545/