How climate-compatible is international aid? In particular, to what extent are official financial flows to developing countries and the actions they support “consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”, as per the Agreement’s Article 2.1? In order to find out, and formulate recommendations for development co-operation to play its part fully in its implementation, the OECD launched this initiative at COP 24 on 12 December 2018 in Katowice, Poland. (Read the full speech by OECD Secretary-General).
Urgent need for ambitious climate action in developing countries
The world is currently on track to reach 3°C by 2100, with warming projected to continue after the end of the century (IPCC’s Special Report on Global Warming of 1.5 °C). People living in the tropics and Southern Hemisphere subtropics, where most developing countries are located, face the highest risks, exacerbated by factors such as the size of the agricultural sector, a lack of capacity to respond to welfare losses and infrastructure that is insufficiently climate-resilient. Several hundred million more individuals will be susceptible to poverty if the climate warms by 2°C instead of 1.5°C by 2050. Delayed action will only increase these estimates.
Making sure development co-operation plays its part
Development co-operation has a key role to play in supporting the transition of developing countries to a climate-compatible future: it can facilitate policy reform, help develop long-term strategies, build capacity, provide direct financing and mobilise broader resources where needed. To what extent are providers realising that potential fully, as they pursue the goals of eradicating poverty and improving lives globally?
Preliminary analysis reveals a gap. In the sectors that matter the most for the transition to low-carbon, climate-resilient patterns of development, only a fraction of bilateral development co-operation includes objectives on climate change. For example, in the Transport & Storage, Energy, and Water Supply & Sanitation sectors, approximately 50% of bilateral financing to developing countries support climate-related activities. This figure was only 4% in the Industry sector.
In order to assess to what extent, and how, development co-operation actually supports developing countries’ efforts towards low-carbon, climate resilient pathways, this initiative is examining the policies and portfolios of development co-operation through three inter-related categories:
How well do the strategies, policies and approaches of development co-operation providers support the Paris objectives across relevant sectors?
Is funding and financing in development co-operation portfolios aligned with the objectives of the Paris Agreement?
Is the development aid architecture “fit for purpose” in terms of reaching the objectives of the Paris Agreement?
Paris Agreement - Article 2.1 (UNFCCC)
Article 2.1 of the Paris Agreement emphasises the aim of strengthening “the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty, including by
Holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change;
Increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development, in a manner that does not threaten food production; and
Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development."
High-level advisory group
This work is supported by a High-level Advisory Group that brings together leaders in the areas of climate change, development and development co-operation to provide strategic guidance for this work.