It’s difficult to put a number on public-sector climate change funding. This is partly because there is a lag between a pledge of funds and an actual payment. Also, funding for things like food security or disaster response could be linked to climate change, even if they don’t fall directly under that category. Nevertheless, the Climate Policy Initiative, an independent organization that tracks international climate finance efforts, says global climate funding totaled around $200 billion annually in 2015 and 2016. National governments accounted for 60% of this total, spending on local energy programs, infrastructure projects, and research. Bilateral and multilateral organizations contributed around $15 and $45 billion respectively. This will increase as multilateral development finance institutions commit 25-40% of their total investments to climate change by 2020, in line with the Paris Agreement.
Climate change funding in the US is an anomaly, perhaps due to the politicization of the issue. According to Giving USA, Americans contributed around $400 billion to charity, generally, in 2017 – roughly double the global annual spending for climate change. US-based foundations accounted for $68 billion of this total, but with a few exceptions, very little went directly to climate change initiatives. According to Fast Company, US foundations spent $35 billion in international aid from 2011-15, but only 2% of these funds were spent on directly on climate change. Development organizations that do offer support and funding for climate change adaptation and mitigation have seen benefits from taking on the challenge. Carbon sequestration, recycling and renewable energy, climate resilience, carbon negative research – these are core issues to many smart, passionate development professionals and like-minded associations. Organizations that fund them attract serious talent, ready partners, and a PR boost.
But the reality is that climate funding to date, in the US and internationally, is insufficient. $200 billion a year is around 25% of annual fossil fuel investments, and far below the $1.6 to $3.8 trillion need estimated by the Intergovernmental Panel on Climate Change to comprehensively overhaul energy systems and avoid the worst effects of climate change. Funding for health, agriculture and food security, economic development, emergency preparedness and response, and other ancillary problems may mitigate the impact of climate change but does little to address climate-related causes. As climate change exacerbates the issues found in these more traditional development categories, the cost to address them is also continuing to rise. Therefore, a more focused approach on addressing root causes driven by climate change is the most cost effective and beneficial way forward for all.
Global Landscape of Climate Finance 2019
U.S. Foundations are Spending More and More on International Aid
The Economist: The Climate Change Issue