Aid watchdog questions UK’s climate finance accounting

Britain has changed how it calculates its international climate aid, boosting its progress towards a 2026 goal without providing additional money for vulnerable countries, a review finds

The United Kingdom has counted an additional £1.7 billion ($2.15 billion) towards its £11.6-billion climate finance target without giving any more money to vulnerable developing countries, an independent watchdog has found.

In response to the review by the Independent Commission for Aid Impact (ICAI), climate and development groups accused the UK government of using accounting tricks to meet its climate finance goal for the five-year period from 2021-2026 after pandemic-related fiscal pressures led it to slash its overall aid budget.

The ICAI assessment said the government had “moved the goalposts” by changing the way meeting the target is calculated and including all eligible aid such as a 30% share of humanitarian funding in the 10% of countries most vulnerable to climate change.

Reaching the £11.6-billion goal would be “challenging”, the ICAI added, with 55% of that amount still to be spent in the last two years of the commitment, including up to £3.8 billion due in the final year following a 2024 general election.

Last summer, climate negotiators from developing countries told Climate Home News media reports that Britain would break its flagship international climate finance pledge were “disappointing” and undermined trust, although the government denied it would miss the goal.

In confidential government documents made public this month during a court case, civil servants again warned of “material risks” to meeting the commitment.

A spokesperson for the Foreign, Commonwealth & Development Office (FCDO), the ministry that oversees the aid budget, said on Thursday the government welcomed the ICAI review and confirmed the UK “remains on track” to meet its international climate finance commitment.

Countries draw battle lines for talks on new climate finance goal

Chief Commissioner Tamsyn Barton, who led the review, said the ICAI was “concerned that by altering its accounting methods and identifying existing spend as International Climate Finance to include that funding in the total, rather than providing new money, the UK is offering less additional assistance than was originally promised”.

Aid groups and opposition politicians were highly critical of the move by the Conservative government, warning it risked losing its international climate policy leadership by not providing more support for those on the frontlines of worsening extreme weather and rising seas.

“The government’s sums on climate finance simply don’t add up and this creative accounting does nothing to help people in lower-income countries – those least responsible for the climate crisis – deal with the devastating impacts they are facing,” said Chiara Liguori, Oxfam GB’s senior climate justice policy advisor.

“Instead of raiding a dwindling aid budget, the UK should be setting an example and increasing climate funding by making the biggest and richest polluters carry a fairer share of the cost,” she added.

Parliamentarian Caroline Lucas, former Green Party leader, said the accounting change would “further erode any last trust in the UK as a climate leader and country of its word”.

Growing demands on aid budget

The ICAI acknowledged that the UK aid budget had come under pressure in recent years amid escalating humanitarian crises and conflict


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