Australia is funding just one-tenth of its international fair share of climate funding, according to a new report led by Oxfam Australia and ActionAid Australia. The revelation comes at a crucial time for the new government, which is seeking to rebuild its reputation with its Pacific neighbours.
More than a decade ago, Australia and other wealthy countries promised USD $100 billion per year in climate finance to support vulnerable nations adapt to climate impacts and build long-term climate resilience capacity. Cyclones, food and water insecurity, biodiversity loss and the existential threat of rising seas threaten the security of Pacific islands. Their economies, livelihoods, culture and community are all at risk.
However, the report, Falling Short: Australia’s role in funding fairer climate action in a warming world, found Australia’s average contributions to climate finance are only AUD $400 million per year over the period 2020-2025. Its fair share of international commitments is AUD $4 billion per year.
“The energy consumption of Australians produces eight times as much carbon emissions each year as Pacific Islanders, and yet small Pacific Island states such as the Solomon Islands and Fiji are suffering the full force of the climate emergency”, said Oxfam Australia Chief Executive Lyn Morgain. “We know the new government wants to rebuild Australia’s reputation in our region. We can help achieve this and make a significant difference to the lives of people impacted by climate change by increasing climate finance.”
“Australians value fairness and being a good neighbour, but for years our leaders have been breaking funding promises and stalling on climate action. We need to start paying our fair share and holding ourselves accountable if our statements and arguments are to carry any weight with our regional neighbours”, she added.
Women and girls are most impacted, highlights ActionAid Australia
It is women and girls who are disproportionately impacted by climate change in developing countries, said ActionAid Australia Executive Director Michelle Higelin. “Australia’s failure to pay its climate finance fair share is having deadly costs for the world’s poorest communities, particularly women and girls, who are bearing the brunt of climate impacts and loss and damage”, Ms Higelin said.
“Across the Pacific, women and their communities face the realities of a warming world including more frequent and severe cyclones, along with rising food and water insecurity”, she said. “Australia can and should do more… If we don’t pay up, it’s women and girls in the world’s poorest communities that will pay the price.”
The loss and damage gap
ActionAid Australia’s report also calls on Australia to participate more significantly in loss and damage negotiations. A proposal from Pacific Islands nations and 124 other low-income countries calls for nations to adopt standalone loss and damage finance at COP27.
Small island developing states are suffering some of the most significant economic losses from climate change. For example, when Cyclone Winston hit Fiji in 2016, it wiped out entire villages and left 347,000 Fijians in need of urgent assistance. The quantifiable loss and damage costs of the destruction were USD $1.4 billion. This is equivalent to 20 per cent of Fiji’s entire annual GDP. However, Fiji received less than five per cent of this loss and damage costs in funding and had to source the rest through international loans.
As the impacts of climate change worsen, the economic cost of loss and damage in developing countries could reach between USD $1-$1.8 trillion annually by 2050. These nations cannot be left to bear the burden of these costs. NGOs have suggested that governments should redirect fossil fuel subsidies as a source of funding for loss and damage finance. In Australia alone, a total of AUD $11.6 billion in public money was given to fossil fuel polluters in the financial year 2021-22. UN chief António Guterres has also proposed a windfall tax on oil-and-gas companies’ excess profits as an additional source of loss and damage money.
ActionAid Australia report recommendations
As a wealthy country and major historical polluter, Australia must increase its ambition on climate finance and contribute its fair share. The report calls on the Australian government to address this by:
- Immediately increasing climate finance to AUD $3 billion over 2020-25 ahead of COP27 in Egypt in November, rising to AUD $4 billion annually by 2025
- Supporting Pacific nations’ call to establish a dedicated loss and damage finance facility at COP27
- Immediately stop subsidising fossil fuels and direct these funds towards climate finance and loss and damage financing
- Ensure funding is provided as grants and not loans to avoid increasing debt distress in the Pacific
In addition to these recommendations, the government must also take stronger action to mitigate climate change through emissions reductions. The new government has pledged to reduce Australia’s emissions by 43 per cent by 2030 from 2005 levels. However, this remains far below the science-based target of a 75 per cent reduction by 2030.
Rebuilding trust at COP27
Australia’s Foreign Minister, Penny Wong, says that she recognises the significance of the climate threat across the Pacific region, stating “the urgency of climate action for our Pacific family is raised with me everywhere I go.” Minister Wong also promises that Australia “will stand shoulder to shoulder with our Pacific family in response to this crisis”. This includes collaborating with Pacific Island governments to bid to host COP29 in 2024.
The ActionAid report welcomes these sentiments, but Minister Wong must match these words with action. Australia’s priority must be to deliver on climate finance and loss and damage to help Pacific nations survive the existential threat of climate change. COP27 provides a vital opportunity for the new Australian government to restore its international reputation and reinforce its international commitments to ambitious and fair climate action. The world will be watching.