Unchecked global warming is already having a devastating impact. It is felt most harshly by the poor worldwide, and not least in the Pacific Islands. Yet Australia’s additional climate aid is zero. 

The $160 million to be spent on climate aid during 2010-11 is from previously announced commitments. Australia double-counts this money as both United Nations Framework Convention on Climate Change (UNFCCC) financing and as ODA, breaking UN requirements that climate finance be additional to ODA.

The World Bank estimates that at least US $70 billion is needed annually to help developing countries adapt to the effects of climate change.[1] Australia’s current contribution of $160 million is 0.002% of the amount World Bank says is needed.

Not only is climate aid inadequate and in breach of UN commitments, but a large proportion is being misspent.

$200 million of Australia’s climate aid is funding a government campaign for the recognition of forest carbon credits at the UN, as a way of offsetting Australian emissions. The money is being spent on ‘Reduced Emissions from Deforestation and Forest Degradation’ (REDD) in Indonesia and PNG, to demonstrate the offsets are viable. Many NGOs and indigenous people’s organisations argue REDD offset schemes are ineffective in reducing overall emissions, undermine the livelihood of subsistence farmers and displace forest-dwelling indigenous peoples.[2]

Indonesian activists protest outside the Australian embassy in Jakarta - Teguh Surya WALHI

Indonesian activists protest outside the Australian embassy in Jakarta – Courtesy – Teguh Surya WALHI

The record of the multilateral banks on climate change is even more concerning. Both the Asian Development Bank and the World Bank have a long history of supporting destructive, carbon intensive fossil fuel projects with little concern for their impacts on people and the environment. Between 2000 – 2006 one quarter of the ADBs energy sector lending went to fossil fuel projects while only 4% supported renewable energy generation.(46)  Positive movement is shown by the ADB doubling its spending on clean energy projects between 2007 and 2009.[3]

The Bank Information Centre has shown that in the 2008 financial year the World Bank’s private sector arm more than doubled its support for fossil fuel projects to $US2.2 billion, while funding for renewable energy in the same period was a mere US$ 243 million.(47)  Recent research shows that, through initiatives like the Clean Development Mechanism, the World Bank continues to pay lipservice to this issue without effective action.[4]

These figures highlight that there is still a lot that needs to be done when it comes to addressing climate change through development financing.

In the first place it is clear that when it comes to the climate crisis, prevention is unquestionably the best form of cure. Bilateral donors and multilateral institutions must cease all support for projects which lock developing countries into fossil fuel futures and must immediately act to reduce emissions in their own countries in line with international targets. They should also support a just and equitable Global Deal on climate change to support developing countries through transition to renewable energy policies.

Secondly, given the far reaching consequences of climate change for the world’s poor it’s clear that funding for climate adaptation needs to be rapidly increased to match the scale of the challenge.

This funding must be in addition to the 0.7% aid target or else climate financing is likely to undercut aid for non-climate development objectives. Indeed, there are strong arguments that this funding should not be considered as aid at all, but as compensatory climate financing in recognition of the disproportionate share the global north has played in bringing about the climate crisis.

Indonesian activists protest outside the Australian embassy in Jakarta – Courtesy – Teguh Surya WALHI

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Last updated 12 November 2010


[1] World Bank (2010) The Economics of Adaptation to Climate Change, A Synthesis Report, Final Consultation Draft (August), World Bank, Washington, p 10.

[2] Goodman, J. and Roberts, E. (2010) Australian REDD Aid to Indonesia – Ineffective and Unjust. In Reality of Aid 2010, Aid  and Development Effectiveness: Towards Human Rights, Social Justice and  Democracy, Reality of Aid, Manila. Pp 53-60.


[3] (accessed 9 September 2010)

[4] (accessed 9 September 2010)

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