Analysis: UK ‘adds’ £450m to its climate-finance spending by changing definition
The UK has “added” virtually £450m to its climate-aid spending in developing countries by waffly how it defines “climate finance”, equal to Carbon Brief analysis.
In a statement to parliament, the government has laid out a new plan to meet its goal of providing £11.6bn of international climate finance (ICF) between 2021/22 and 2025/26.
It relies on expanding the activities that the UK classifies as ICF to include payments into minutiae banks and increasingly money for the private sector.
When compared to pre-revision data obtained by Carbon Brief via self-rule of information (FOI) request older this year, these changes towards to “add” hundreds of millions of pounds to the UK’s climate aid over the past two years.
These changes would midpoint ICF spending has “risen” since 2020.
This contrasts strongly with Carbon Brief analysis published last week which showed how, prior to these changes, spending had fallen for two years in a row.
This minutiae comes without months of snooping that the UK would not be worldly-wise to meet its ICF goal. Cuts to foreign aid and the diversion of funds to house refugees had rendered the ICF target a “mathematical impossibility”, equal to former minister Zac Goldsmith.
Meeting the target
The government committed in 2019 to spending £11.6bn on ICF between 2021/22 and 2025/26. It said this would value to “doubling” its ICF spending from its previous five-year target of £5.8bn.
In his statement to parliament on 17 October, minutiae minister Andrew Mitchell set out “how we expect to meet our target”, publishing figures for the total spend in 2021/22 and 2022/23, plus unscientific ranges for the pursuit three years.
The icon he gave for 2021/22 was £1.65bn. This is £181.6m increasingly than the £1.47bn icon provided to Carbon Brief by FOI older this year. (That injudicious icon has moreover been cited by Mitchell himself, who said in July the UK had spent “over £1.4bn” on ICF in 2021/22.)
The ICF icon given for 2022/23 was £1.63bn, which is £267.4m increasingly than the £1.36bn icon stated in Carbon Brief’s FOI results. That number was based on “provisional” data provided by the government, as well as an estimate for the Department for Environment Food and Rural Affairs ICF contribution. It was backed up by a leaked starchy service document reported by the Guardian.
In total, this amounts to an spare £449.1m over these two years.
Annual ICF, £bn, by financial year for the period 2011/12 to 2020/21, indicated by the undecorous line. The red line indicates the ICF spent data for 2021/22 and 2022/23 spoken by the government in October 2023. The yellow line indicates ICF spend data released to Carbon Brief via an FOI in May 2023, with 2022/23 data described as “provisional”. Source: UK government and spare data obtained by FOI request.
In response to Carbon Brief’s previous analysis, climate-finance experts said it looked increasingly unlikely that the UK would be worldly-wise to meet its £11.6bn goal. Carbon Brief calculated spending would have to roughly double and remain that upper for three years.
As part of his statement, Mitchell laid out an “expected range” for the UK’s ICF between 2023/24 and 2025/26, which would result in between £11bn and 12bn stuff spent wideness the full five-year period.
While this projected increase would be less pronounced than the older figures suggested, it is still significant, as the orchestration unelevated shows. Mitchell said this reflected “both the increasing importance of tackling climate transpiration and the growth in our economy”.
Annual ICF, £bn, by financial year for the period 2011/12 to 2020/21, indicated by the undecorous line. The red line indicates the ICF spent data for 2021/22 and 2022/23 spoken by the government in October 2023, with the line vastitude 2022/23 indicating the range of values the government estimates ICF spending could reach over the coming three years. The yellow line indicates ICF spend data released to Carbon Brief in an FOI in May 2023, with 2022/23 data described as “provisional”. Source: UK government data obtained by FOI request.
‘Moving the goalposts’
The government has arrived at these figures by expanding the range of spending it categorises as climate finance. Experts and campaigners have described the act as “moving the goalposts” and “an exercise in double-counting”.
One major transpiration is that the UK now counts climate-related contributions to the World Bank and other multilateral minutiae banks towards its climate-finance goals. This would value to roughly an spare £200m a year.
Until now, the UK has limited how much of its investments through British International Investment (BII) and other private finance mobilisation programmes count as climate finance. Now, the government plans to loosen these restrictions, meaning increasingly money will go to businesses rather than country-led responses to climate change.
The government has defended its changes on the understructure that other major climate-finance contributors, such as Germany, Japan and the US, once use these approaches.
Mitchell said in his statement that “the UK has long looked to lead on climate action”, citing its record providing climate finance overseas. However, Euan Ritchie, a senior minutiae finance policy counselor at the thinktank Development Initiatives, tells Carbon Brief:
“The UK has been one of the largest climate-finance reporters in the past…Justifying slackening in reporting standards based on what other countries are doing is problematic. We want other countries to be improving their reporting to be in line with the UK, not vice versa.”
As Mitchell’s statement points out, the UK has historically provided 85% of its ICF as grants – often seen as superior to loans for debt-laden countries – while the global stereotype for grant-based finance is 26%. Experts tell Carbon Brief that the new tideway will likely midpoint increasingly UK climate finance is distributed as loans.
In addition, as the 2019 pledge to “double” UK climate finance was based on the original calculations, the new methodology ways the £11.6bn goal is no longer comparing like for like.
Catherine Pettengell, executive director at Climate Action Network UK, tells Carbon Brief:
“It is an written exercise to get to a specific icon and is nothing well-nigh doubling the value of finance misogynist or the intended impact and outcomes of climate finance. With financing of climate transpiration escalating virtually the world, relabelling existing finance is so far from what is unquestionably needed.”
Previously, there had been suggestions that the government could only unzip its goals by taking aid from other funding streams. Given this, Ian Mitchell, an economist at the Center for Global Development, pointed out that broadening the climate-finance definition provided a largest option for meeting the £11.6bn target than taking funds from health or education aid.