Governments Provide More Development Aid for Fossil Fuels Expansion Than Clean Outdoor Air Projects
A traditional brick factory in Tozeur, southern Tunisia. In Africa and South Asia brick making and waste burning are major sources of air pollution.

Governments worldwide allocated almost $700 million (15%) more international development aid to fossil fuel expansion in 2022 than to projects improving better air quality – which typically also promote green energy and reduce climate emissions, according to a new report from the Clean Air Fund.

This marks a sharp reversal from 2021 when international aid from governments, bilateral development agencies, and multilateral development banks for clean air initiatives briefly overtook the investments in fossil fuel development.

The latest data also shows aid for fossil fuel expansion has more than quadrupled, rising from $1.2 billion to $5.4 billion in just one year.  Although investments in clean air projects nearly doubled, from $2.4 to $4.7 billion, the net result was that fossil fuel investments regained the historic lead once more – in terms of global development priorities. 

International aid for fossil fuel development as compared to projects that improve air quality over five years.

The new CAF analysis hones in on international aid funding that is targeted to addressing outdoor air pollution in comparison to fossil-fuel prolonging investments, says Merel Krediet, one of the report’s authors. “This outdoor air quality funding hones in on projects that explicitly target air pollution,” she said.

A separate analysis looks at climate investments in clean energy and transport systems that may  have implicit air quality co-benefits – even though air quality is not cited as a project objective.  On a brighter note, this latter category may in fact be quite large, amounting to as much as $27 billion in 2022, and $94 billion between 2018-2022, according to the CAF analysis. The assessment was based on review of an OECD investment data base, and other climate investment data.

Even so, Jane Burston, CEO of the Clean Air Fund (CAF), described the “shocking increase in aid funding to fossil fuels” as  “a wake-up call”. 

“The world cannot continue down this path of propping up polluting practices at the expense of global health and climate stability. We need to see a drastic shift towards supporting clean air initiatives and debt-free aid to communities who need it most,” said Burston.

CAF warns that the problem is compounded by the structure of the clean air aid, with 92% of funding towards air quality initiatives provided as loans, while only 6% is allocated as grants. 

“This loan-heavy model would place an unsustainable burden on low-income, heavily polluted countries that cannot afford to take on additional debt,” said CAF in a statement on Thursday.
“This stands in stark contrast with other areas of international development funding  such as healthcare and education. On average, 63% of official development assistance is funded as grants.”

Significant proportion of deaths from air pollution are attributable to fossil fuel emissions

Smoking chimneys air pollution
Power plant running on fossil fuels emits air pollution over a city skyline. A large proportion of air pollution-related deaths are due to fossil fuel emissions.

A significant proportion of the estimated 8.3 million annual deaths caused by outdoor air pollution globally are attributable to fossil fuel emissions – and over half according to some of the most recent estimates. Despite this, governments continue to channel aid into fossil fuel prolonging and expanding projects, while clean air initiatives receive less than 1% of available ODA funding, overall. 

Toxic air also carries immense economic costs, with the combined impact of premature deaths, lost productivity, and healthcare expenses for diseases like cancer, heart disease, and dementia running into trillions of dollars each year. The World Bank estimates this “dirty air tax” drains around 6.1% of global annual GDP.

Report on ‘dirty air’ ODA investments come ahead of COP29 discussion of new goals for climate finance

These findings come just ahead of the upcoming UN Climate Conference (COP29) in Baku, 11-22 November, where negotiators are expected to focus significant attention on climate finance goals.  At the conference, leaders and negotiators will reassess international funding strategies and attempt to hammer out a “New Collective Quantified Goal (NCQG)” for accelerating climate finance. 

CAF and other clean air advocates want to seize the moment to secure commitments on increased air quality funding –  with an emphasis on providing grants instead of loans to already heavily-indebted low- and middle income countries.”

There is also a need to address the significant inequalities seen in funding for low-income countries, particularly in sun-rich regions of Africa and the Middle East, and some middle- or upper-middle-income states in Asia, Europe and Latin America.

“There are wide ‘funding deserts’ because funding is spread unevenly across regions,” the report states. For example, outdoor air quality funding for every country in Africa and the Middle East was only a third of the funding channelled to one Asian country, the Philippines ($1.5 billion versus $4.7 billion from 2018 – 2022).”

Over the same period, low-income countries such as Chad and Somalia receive much less funding than upper middle-income countries such as Serbia and Costa Rica: $2 versus $73 of overall air quality funding per capita.

 “Even as countries pledge to reduce their emissions, increase their climate change ambitions and transition away from fossil fuels, the figures tell a different story,” said Adalberto Maluf, National Secretary of Urban Environment and Environmental Quality in Brazil,” in a comment on the report’s findings. 

“International public funding does not come close to meeting the scale of the challenge or unlocking the significant opportunity of investment in air quality. What funding exists often does not reach the most affected geographies, communities and vulnerable people. It doesn’t have to be this way. 

“Brazil, as G20 chair and the incoming COP Presidency, is proud to be championing another vision for the planet: one where humans and nature co-exist in harmony, where we respect the environment we are blessed with, and where economic prosperity doesn’t come at the expense of our health and wellbeing.”

Barbara Buchner, Global Managing Director of Climate Policy Initiative, which co-authored the report, said: “Air pollution and climate change are driven by the same root causes, and share the same solutions. Directing limited public funds towards fossil fuel projects and subsidies is locking in harmful emissions for decades to come. International aid and climate finance should prioritize initiatives that improve air quality, delivering significant health, economic, and climate benefits.”

  • Elaine Ruth Fletcher contributed reporting to this story.

Image Credits: INGImage, WHO/Diego Rodriguez, Clean Air Fund.

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