1. Aggregate trends
This section presents aggregate trends of annual climate finance provided and mobilised by developed countries for developing countries for the period 2013-19. The trends are presented per component, climate theme and sector, geography, and financial instrument. As this report is intended as a short technical update to the previously published 2013-18 figures, the information provided deliberately remains at an aggregate level compared to the more detailed analyses provided in (OECD, 2020[5]). An expanded and disaggregated analysis will be conducted in 2022 for climate finance in 2019 and 2020 once data for 2020 is available.
In 2019, total climate finance provided and mobilised by developed countries for developing countries was USD 79.6 billion in 2019, an increase of 2% from 2018 (Figure 1.1 and Table 1.1). A more than USD 20 billion annual jump would, therefore, be required to meet the USD 100 billion goal for 2020. Between 2018 and 2019, public climate finance increased by 2%: multilateral public climate finance attributable to developed countries grew by 15%, while bilateral public climate finance dropped by 10%. Meanwhile, climate-related export credits grew (but remain small in absolute terms), whereas private climate finance mobilised dropped by 4% (although that mobilised by bilateral public finance increased sharply).
Mitigation and adaptation finance both grew over 2016-18. In 2019, there was a noticeable further increase of adaptation finance by 20% (USD 3.4 billion), reaching USD 20.1 billion, but mitigation finance dropped by 7% (USD 3.7 billion) (Figure 1.2). Despite this, mitigation still represents two-thirds of total climate finance provided and mobilised by developed countries, driven notably by finance for activities in the energy and transport sectors. Taken together, these two sectors continue to represent close to half of total climate finance provided and mobilised in 2019 (Figure 1.3).
Note: “Cross-cutting” relates to projects with both mitigation and adaptation benefits or to climate finance that was not yet allocated to mitigation and/or adaptation at the point of reporting, e.g. capacity-building grants, which the recipient will decide the use of.
Source: Based on Biennial Reports to the UNFCCC, OECD DAC and Export Credit Group statistics, complementary reporting to the OECD.
Note: “Other sectors” include education, health and population, government and civil society, other social infrastructure and services (e.g. housing, employment creation), communications, industry, mining and construction, trade policies and regulations, tourism, general environmental protection and multisector and providers’ administrative costs. They also include humanitarian aid.
Source: Based on Biennial Reports to the UNFCCC, OECD DAC and Export Credit Group statistics, complementary reporting to the OECD.
In 2019, public grant financing reached USD 16.7 billion, a 30% (USD 3.9 billion) increase relative to 2018, after remaining stable for three years. In contrast, the volume of public loans, which had increased significantly up to 2018, fell by 5% (USD 2.3 billion) in 2019 (Figure 1.4). The shares represented by loans (including both concessional and non-concessional) and grants were 71% and 27% of total public climate finance provided in 2019. Volumes of private climate finance mobilised by developed countries’ public climate finance dropped by 4% in 2019 compared to 2018 and 2017. Private finance mobilised by bilateral public climate finance (as per Table 1.1 above) via direct investment in companies and projects, simple co-financing schemes, and credit lines increased, while amounts mobilised by multilateral public climate finance (attributable to developed countries) through public guarantees and syndicated loans decreased (Figure 1.5). Deeper analyses of providers’ portfolios is needed to draw conclusions on these relatively modest volumes and on factors that impact the effectiveness of public finance in mobilising private finance.
Note: For 2018, actual US bilateral public climate finance data replaces the value previously estimated (OECD, 2020[5]), with the resulting subtotals and grand total being USD 0.6 billion lower.
Source: Based on Biennial Reports to the UNFCCC, OECD DAC and Export Credit Group statistics, complementary reporting to the OECD.
Note: Except for guarantees, the public finance instruments in Figure 1.4 (equity, grants, loans) underpin these mechanisms, e.g. shares in collective investment vehicles (CIVs) consist of equity investments, direct investment in companies and special purpose vehicles (SPVs) can take the form of equity or loans, simple co-financing involves grants or loans.
Source: Based on OECD DAC statistics and complementary reporting to the OECD.
Asia remains the main beneficiary region of climate finance provided and mobilised by developed countries (USD 30.6 billion on average per year over 2016-2019, or 43%), significantly ahead of Africa and the Americas (Figure 1.6). While climate finance for Least Developed Countries (LDCs) continued to increase in 2019, climate finance for Small Island Developing States (SIDS) did not (Figure 1.7). For both categories, finance for adaptation represents more than 40% on average over 2016-2019, which is significantly higher than the average for developing countries overall (21% on average over 2016-2019, see Figure 1.2 above).
Note: The regions cover only developing countries as defined under “Country groupings” in the next section, e.g. “Europe” excludes all EU member states, Iceland, Liechtenstein, Monaco, Norway, Switzerland, and the United Kingdom. Although the regions identified often group countries and territories sharing some attributes, they differ significantly in terms of size, population, income, GNI, and other statistical categories.
Source: Based on Biennial Reports to the UNFCCC, OECD DAC and Export Credit Group statistics, complementary reporting to the OECD.
Note: The LDCs and SIDS country groupings overlap, implying that the figures cannot be aggregated across the two categories. “Cross-cutting” relates to projects with both mitigation and adaptation benefits or to climate finance that was not yet allocated to mitigation and/or adaptation at the point of reporting, e.g. capacity-building grants, which the recipient will decide the use of.
Source: Based on Biennial Reports to the UNFCCC, OECD DAC and Export Credit Group statistics, complementary reporting to the OECD.