Significant rise in funding revealed despite a drop in allocations for lower income countries.
A joint report on multilateral development bank climate funding has revealed a dramatic increase in spending on climate finance in 2020, though allocations for low-and-middle-income nations fell as the world struggled through Covid-19.
Climate finance committed by major multilateral development banks rose to a total of $66bn last year, up from $61.6bn in 2019. Of that funding, 58% or $38bn was committed to low-and-middle-income economies. That was a fall from $41.5bn for those economies in 2019, though that may reflect a short-term shift towards dealing with very immediate pandemic issues.
Along with the $66bn allocated by major MDBs, climate co-finance committed alongside MDB resources amounted to a further $85bn through the year, meaning a total of $151bn was raised.
In the past six years, the MDBs have jointly committed a total of $257bn in climate finance, of which $186bn has been directed to low-and-middle-income economies.
The 2020 financing played a key role in supporting countries to embed green and climate-focused solutions as part of their recoveries from COVID-19. While these programmes affected MDBs’ normal lending operations and caused a dip in climate-specific allocations to low-and-medium-income economies, there is an expectation that the allocations will result in a stronger and more resilient foundation for longer term development.
Of the $66bn climate finance, nearly $50bn was linked to climate change mitigation – reducing harmful greenhouse gas emissions to slow down global warming. The other $16bn went into adaptation finance to help countries mitigate the growing impacts of climate change, which include worsening droughts and more extreme weather events.
