Issue Deep Dive
Australia / Climate
Last updated: April 21, 2023
Australia’s climate-related ODA has steadily increased in recent years. It ranks seventh among DAC donor countries in terms of its spending on projects with some degree of climate focus.
Australia ranks fifth among DAC donors when considering its spending on climate change-related projects as a proportion of total ODA spending.
Almost all of Australia’s climate change-related ODA in 2021 was spent on projects with a significant climate change component, putting Australia far above the DAC average of 15%. This means very little of Australia’s funding went toward projects which named climate change as a principal goal.
The government committed to providing AUD2 billion ( US$1.4 billion) in climate finance between 2020-21 and 2024-25. Based on a March 2023 DFAT report, Australia has met half of this commitment to date. AUD700 million ( US$486 million) of this total will go towards building renewable energy capacity and climate and disaster resilience in the Pacific, and new partnerships in Southeast Asia focused on climate change and achieving net zero, including the AUD200 million ( US$139 million) Australia-Indonesia Climate and Infrastructure Partnership.
The Australian government sees climate change as a threat to the livelihoods, security, and well-being of the peoples of the Pacific, the region that receives the largest share of Australia’s ODA.
Australia’s climate change-related ODA in 2021 was skewed towards climate change adaptation, in line with the government’s policy emphasis on climate resilience in the Indo-Pacific. US$419 million went to projects related to climate change mitigation, while US$402 million targeted both mitigation and adaptation.
Australia channels a low amount of climate finance, not all of which is considered ODA, through multilaterals, including contributions to the following organizations:
Australia’s development policy lists ‘Climate change adaptation’ as a component of the government’s plan to foster resilience in the Indo-Pacific: Although climate change is not considered its own pillar of the policy, this indicates the government’s recognition that it remains an important component of its plans for the development of its region.
DFAT’s Climate Action Strategy for 2020 to 2025 signals the escalating threat that climate change poses to sustainable development: Under this strategy, Australia’s climate change-related goals include:
- Promoting the shift to lower emissions development in the Indo-Pacific region;
- Supporting partner countries to adapt to climate change, and to plan, prepare for, and respond to climate-related impacts; and
- Driving innovative solutions to climate change, including those that encourage private sector investment, drawing on Indigenous traditional knowledge, such as cultural burning and supporting nature-based solutions.
In 2020 and 2021, former Prime Minister Scott Morrison announced AUD2 billion ( US$1.4 billion) in climate change-related pledges: In December 2020, he announced a plan to spend AUD1.5 billion ( US$1 billion) on climate finance between 2020-2025. He then pledged an additional AUD500 million ( US$376 million) at COP26 in 2021. This brought Australia’s total commitment to AUD2 billion ( US$1.4 billion), AUD1.5 billion ( US$1 billion) of which is expected to be sourced from Australia’s bilateral ODA. AUD700 million ( US$486 million) of this funding flow will be dedicated to the Pacific due to its specific and unique climate vulnerabilities.
In March 2021, the Australian government announced the Australian Climate Finance Partnership ( ACFP): This partnership was established together with the ADB which will provide up to AUD140 million (US$105 million) to accelerate private sector investment in low-emission, climate-resilient solutions for Pacific Island countries and Southeast Asia.
Allocations for climate change have increased in the FY2023/24 budget: The 'Climate Change and Environment' budget line received AUD142 million ( US$99 million) in the FY2023/24 budget, up from AUD137 million ( US$95 million) in FY2022/23. Investments will mainly support low-emission and climate-resilient investment in the Indo-Pacific.
The Labor government is likely to give new impetus to climate action and climate finance: In May 2022, the Minister of Foreign Affairs announced the Australia-Pacific Climate Infrastructure Partnership, which will assist with energy projects and other climate-related infrastructure in the Pacific and Timor-Leste, a cornerstone project for future climate-focused assistance to the region. In addition, Australia is bidding to co-host COP31 in 2026 with Pacific Island countries.
Unless otherwise indicated, all data in this section is based on commitment. For more information, see our Donor Tracker Codebook.
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