OECD report on climate finance: developed countries mobilised USD 89.6 billion in 2021

Jakarta – The OECD Secretary-General recently released a report revealing that in 2021, the total climate finance provided and mobilised by developed countries amounted to USD 89.6 billion, a 7.6% increase from the previous year. The report, released on November 16, presents aggregate trends of annual climate finance provided and mobilised by developed countries for developing countries from 2013 to 2021.

The report, which includes breakdowns by climate theme, sector, financial instrument, and region for 2016-21, offers key recommendations to enhance financing for adaptation and more effectively mobilise private finance for climate action. The report draws from two supplementary OECD publications on scaling up private climate finance and adaptation finance.

Public climate finance, both bilateral and multilateral, nearly doubled from USD 38 billion to USD 73.1 billion over the 2013-21 period, comprising the majority of the total in 2021. Despite this, adaptation finance decreased by USD 4 billion (-14%) in 2021, accounting for a reduced share of total climate finance. Meanwhile, mobilised private climate finance reached USD 14.4 billion in 2021, constituting 16% of the total.

Canada’s Minister of Environment and Climate Change, Steven Guilbeault and Germany’s State Secretary and Special Envoy for International Climate Action, Jennifer Morgan, addressed the press and provided an update on the collective progress toward the USD100 billion international climate finance goal.

Referencing the report, Morgan said that preliminary data for 2022 suggested the likelihood that the goal was already met. She stressed the importance of transparency and accountability in releasing concrete figures for 2022 and 2023 and emphasised that meeting the USD100 billion goal was a crucial step forward but not the end, adding that scaling up and improving climate finance requires coordinated efforts from various actors.

“We recognise that releasing concrete figures for ‘22 and ‘23 must be (done) as soon as possible and generating robust (data); we know that it takes time. It is very important from a transparency and accountability perspective. So, along with all other contributors, we are committed to working with the OECD to enable the release of finance data in due course,” Morgan said.

Minister Guilbeault, echoing Morgan’s sentiments, emphasised the need to double adaptation finance by 2025 in line with the Glasgow climate pact. Contributors are committed to meeting their adaptation targets, prioritising adaptation in climate finance programming, and exploring innovative ways to support the most vulnerable.

“The OECD published two other reports on adaptation finance and private finance mobilised. These reports take stock of current challenges and provide recommendations to overcome these challenges. We will continue to assess and work to implement these recommendations, recognising significant effort will be required for meaningful progress,” said Guilbeault.

Morgan addressed two additional issues: access and finance from Multilateral Development Banks (MDBs). Access was highlighted as a fundamental issue, particularly for Small Island Developing States (SIDS) and Least Developed Countries (LDCs). Efforts to break barriers preventing support access are ongoing, with a focus on debt issues. Morgan announced the implementation of the first debt-for-climate swaps and emphasised the importance of identifying instruments like grants and guarantees to avoid increasing debt burdens.

On finance from MDBs, Morgan noted significant momentum in 2022, with MDBs surpassing collective targets for climate finance. The World Bank’s updated vision statement, emphasising a “livable planet” and increased lending capacity, reflects a growing prioritisation of climate action. She underlined ongoing advocacy for tangible progress from MDBs, including reform efforts. (nsh)

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