UK / Climate

Policy Context

In March 2023, the UK released its first-ever International Climate Finance Strategy for guiding its International Climate Finance investments. It identifies four key priority areas for investment:

• Supporting clean energy;
• Nature, climate, and people;
• Adaptation and resilience; and
• Sustainable cities and infrastructure

The strategy also commits to strengthening the gender-responsiveness and inclusivity of UK climate finance for both adaptation and mitigation, including by increasing the proportion of climate finance that has gender equality as a principal or significant objective as defined by the OECD DAC Gender Equality policy marker.

The UK also published its 2030 Strategic Framework for International Climate and Nature Action in 2023, which set out a whole-of-government plan for global action. The framework identified six global challenges that need to be met and outlines 137 specific actions that the UK will undertake to address them. Adaptation is a prominent focus, with actions encompassing investments, advocacy, and partnerships. In the framework, the UK commits to driving all countries to double adaptation funding by 2025, working through coalitions and within international fora to establish a new global adaptation target and supporting the establishment of a loss and damage fund, among other initiatives.

ODA Spending

How much ODA does the UK allocate to climate projects?

In 2021, the UK committed US$470 million of its bilateral allocable ODA to projects which targeted action against climate change as a principal or significant objective, making it the 13^th-largest OECD DAC donor to the issue, in absolute terms.

The UK was the 20^th-largest donor to climate ODA in relative terms.

How is UK's climate ODA changing?

In 2021, 10% of the UK’s bilateral allocable ODA was spent on projects with a principal climate change component, just above the DAC average of 9%.

3% of the UK’s bilateral funding targeted climate change as a significant goal in 2021, much lower than the DAC average of 15%. This was a significant decrease from the percentage of the UK’s bilateral funding targeted toward climate change as a significant goal in 2020, which was 30%.

FCDO's FY2022/23 report laid out anticipated climate funding numbers. Climate funding lines indicated that international climate funding would decrease by at least US$105 million in FY2023/24. However, the climate, energy, and environment thematic area showed new funding lines that were not present in FY2021/22. Funding stood at US$248 million in FY2021/22 and increased by 148% in FY2022/23 to US$593 million. It is scheduled to increase by 20% again in FY2023/24 to abbrUS$710 million and again rise by 35% to US$805 million in FY2024/25.

How does UK allocate climate ODA?

Bilateral climate-related ODA

13% of the UK’s bilateral allocable ODA was screened against the Rio markers as targeting climate change. This is below the DAC average (24%) and far from the government’s target of aligning all ODA with the Paris Agreement.

In 2021, US$99 million of the UK’s climate-related ODA targeted both climate mitigation and climate adaptation. Mitigation ( US$402 million) received more funding than adaptation ( US$167 million). 41% of the UK’s climate-related ODA went to ‘energy,’ 24% to ‘environmental protection,’ 9% to ‘agriculture,’ and 4% to ‘conflict, peace, and security.’

Bilateral climate adaptation-related ODA

Between 2017 and 2021, the UK's bilateral ODA to climate adaptation decreased by 81%. The substantial decrease in funding was mainly caused by the cut in the ODA budget in 2021 to 0.5% of GNI from 0.7% in previous years, as well as the repurposing of unspent international climate finance for support to Ukraine. The peak in 2021 was a result of large commitments across multiple regions and sectors, and in line with the UK government's commitment to doubling UK international climate finance in that year.

Environmental protection received the largest share of the UK's principal funding in 2021, totaling US$34 million, making up 61% of the total adaptation-related ODA allocated to this sector. Adaptation-related ODA in 2021 to environmental protection primarily targeted environmental research and biodiversity. Multi-sector funding predominantly supported research and scientific institutions. Within the agriculture sector, priority was given to rural development and agricultural research. Funding for agriculture decreased significantly from a peak in 2019 ( US$285 million).

Multilateral Spending and Commitments

The UK contributes some of its climate financing through multilaterals. Not all these funds are considered ODA.

Funding Outlook

What is the current government's outlook on climate ODA

The UK’s COP26 presidency reinforced its commitment to climate: The UK government is committed to providing at least US$16 billion between 2021-2026 in international climate finance (all from the UK's ODA budget). This is double the UK’s previous funding. The UK government also announced at COP27 that UK adaptation financing would rise to US$1.8 billion by 2025, a three-fold increase from 2019.

Concerns surrounding the UK’s commitment to climate action: In July 2023, a leaked briefing note to Ministers suggested that the UK government has abandoned its climate finance commitment due to the commitment's outsize pressure on the UK's reduced, 0.5% ODA/GNI in 2023 and competing priorities including addressing the impacts of the Ukraine crisis. The abandonment has, however, not been confirmed by the FCDO. In October 2023, the UK Minister for Development and Africa Andrew Mitchell, confirmed to Parliament that the government will be changing the way it counts ICF, with the new methodology showing that the UK is on track to meeting its 2021-2025 climate target of US$16 billion.

Key Bodies