The UK is making a series of changes to its climate finance definitions as a way to meet its target to spend £11.6bn over five years in the developing world to help combat the climate crisis, Andrew Mitchell, the development minister, has said.
Rich countries have long promised to provide finance – in the form of loans or cash – to help poor countries cut greenhouse gas emissions and cope with the impacts of the climate crisis. However, leaks in the summer showed UK ministers were warned they were massively off track to meet their targets and could only do so by raiding the aid budget.
Boris Johnson’s government, with Rishi Sunak as chancellor, committed in 2019 to ramping up its international climate finance (ICF) in order to reach a target of £11.6bn between the financial years 2021-22 and 2025-26.
Mitchell, in a Guardian interview, said recent changes involved three new assumptions that would help the UK meet that target.
First, in the allocation of humanitarian spending in the 10% of the poorest countries, the UK will in future assume 30% was spent on internal climate finance, without making a precise calculation. Describing the move as good housekeeping, Mitchell said this was in line with practice in other major countries delivering aid.
Second, the UK will no longer assume only 30% of spending by the UK aid investment arm, British International Investment (BII), goes on climate finance, which could be much higher.
Third, for the first time the UK will also include UK aid spending on climate sent to multilateral development banks as part of the £11.6bn spend.
Mitchell defended himself from the charge of a “sleight of hand” by describing the changes as “clarifications and not definitional changes. We will now more accurately reflect what we spend on climate.”
He pointed out that other countries, unlike the UK, included climate-related loans to developing countries as part of their climate finance budget. The UK was also not including dividends from the BII’s investment in climate-related projects. If included – something the government did not intend to do – this would have been worth £750m over two years, he said.
Similarly, none of the $5.8bn (£4.77bn) of guarantees provided to the Africa Development Bank, World Bank and Asia Development Bank that he said would release $3.2bn (£2.63bn) of climate finance in the time period in question, would be allocated to meeting the target.
Mitchell said if all this spending was defined as climate-related by the UK, the total UK international climate finance budget would be closer to £16bn.
The new changes will have to be reported to the DAC, the international development watchdog in Paris, but officials expect there to be no pushback since none of the changes breach DAC definitions.
The redefined £11.6bn will be included as part of the pledge by developed countries to direct at least $100bn a year of climate finance to the developing world from 2020, a commitment first made at the Copenhagen climate summit in 2009, which has still not been met.
Officials claim the UK is coming into line with other countries’ more liberal definitions of what constitutes climate finance.
Responding to the government statement, Sophie Powell, Christian Aid’s chief of advocacy and policy, said it looked “like an exercise in double counting”.
She said: “As Cop28 nears, where the UK used to lead on climate, it is now lowering the bar at every turn, which is a disaster for the world’s most vulnerable people.”
Mitchell promised that the white paper would show how the UK would contribute to the world getting back on track to meeting the UN sustainable development goals.
He claimed there was more flexibility in the aid budget due to a tightening in the amount of official development assistance being spent on housing first-year asylum seekers in the UK.
A leak to the Guardian in July suggested officials had in effect been advising ministers to drop the £11.6bn target.
Government officials had calculated the leak showed that it would have to spend 83% of the Foreign Office’s official development assistance budget on the international climate fund. Civil servants said in the leaked document that this “would squeeze out room for other commitments such as humanitarian and women and girls”.
