Climate finance: UK accused of ‘moving goalposts’ to meet £11.6bn pledge

This chopping and changing of accounting methods, the watchdog argues, is putting the UK at risk of under-delivering on its £11.6bn ICF commitments.

During COP15 in 2009, the UK pledged to allocate a minimum of £5.8bn in ICF by 2020-21, which was subsequently doubled in 2019 to at least £11.6bn over the following five years until 2025-26. It forms part of a collective commitment from wealthy nations to deliver $100bn of annual climate finance to the Global South.

Last year, the Guardian reported that the Government was planning to either scale back or axe the UK’s £11.6bn commitment. However, shortly after that Minister of State for Development and Africa, Andrew Mitchell issued a statement reaffirming the £11.6 billion pledge.

Today, (29 February), the Independent Commission for Aid Impact (ICAI) has revealed that pressures on the UK’s aid budget over the years, with escalating humanitarian crises and conflicts, have led to trade-offs with non-climate programmes.

Additionally, the ICAI found that the Government had shifted the goalposts in measuring additional climate finance for developing countries. The alterations allowed the inclusion of existing spend, amounting to an additional £1.72bn, towards the ICF target without delivering any extra support to recipient countries.

Moreover, the watchdog noted that adjustments were made in how the Government calculates climate finance channelled through the UK’s Development Finance Institution to better reflect its proportion addressing climate change, resulting in a higher total.

While the Government claims that it conducted a thorough review of the current UK aid portfolio to identify programmes that are eligible to be classified as ICF, the ICAI found that the specific interventions and period covered remain unclear.

Furthermore, the modifications led to more UK aid funding being allocated as loans rather than grants, a method that can add to debt pressures for the poorest and most vulnerable countries.

According to the ICAI, 55% of the £11.6bn allocation is earmarked for expenditure within the final two years of the commitment, with a potential £3.8bn slated for disbursement in the last year.

Recommendations and reactions

Numerous stakeholders interviewed by the ICAI for the aid review observed a decline in the UK’s reputation as a climate action leader in 2023.

The ICAI’s report makes four recommendations to improve the UK’s delivery of its ICF commitments. It calls for detailed plans to meet the £11.6bn target, transparency through annual reports, integration of gender considerations in programmes and tracking the delivery of ICF to specific groups of countries, including small island developing states and least developed countries.

The ICAI’s chief commissioner Dr Tamsyn Barton said: “We are concerned that by altering its accounting methods and identifying existing spend as ICF to include that funding in the total, rather than providing new money, the UK is offering less additional assistance than was originally promised.”

Caroline Lucas MP said: “The Government likes to talk a big game on UK international climate finance, but the reality is they’re just resorting to more and more desperate and underhand ways to fudge the numbers and double count the same money pledged elsewhere.

“But you can’t fake your way out of a climate crisis. The only thing this will achieve is to further erode any last trust in the UK as a climate leader and country of its word.”

ActionAid UK’s senior climate and resilience adviser Zahra Hdidou added: “The findings of the ICAI review seriously call into question the UK’s role as a global climate leader. Instead of providing the funding communities needed to adapt to climate change, the government has decided to engage in a cynical accounting trick that also endangers the UK’s development commitments.

“Instead of shifting numbers from one column to another to keep up appearances, we need the government to commit to new and additional climate funds that urgently recognise the sheer scale of this crisis. No more playing with lives via a spreadsheet, it’s time they got serious about the very real threat climate change poses to us all.”