Air pollution causes seven million premature deaths every year – yet a minuscule 1% of international development funding ($17.3 billion) and 2% of international public climate finance ($11.6 billion) was allocated to reducing it between 2015 and 2021.

This is according to the Clean Air Fund’s (CAF) report on global air quality funding released on Thursday.

The funders included are multilateral development banks such as the World Bank, bilateral development agencies and governments that fund low- and middle-income countries via loans and grants. 

During the same period, development funders committed almost three times as much money ($47.4 billion) to fossil fuel-prolonging projects, primarily oil and gas extraction and production, according to the report.

More positively, funding for fossil fuel-prolonging projects declined over time and by  2021, outdoor air quality funding ($2.3 billion) exceeded investments in fossil fuel-prolonging projects ($1.5 billion) for the first time. 

Transport

Funding for climate and air pollution leaned heavily towards transport projects, accounting for almost half the outdoor air quality funding ($6.5 billion). These include investments in cleaner fuels, electric and hybrid vehicles, public transport and railways.

Outdoor air quality funding peaked in 2019 mainly due to a large railway project in the Philippines aimed at alleviating serious traffic congestion and mitigating air pollution. It plunged by 65% in 2020, likely because of the COVID-19 pandemic, then rose 37% in 2021.

Co-benefits

“While the pool of funding that is explicitly working to improve outdoor air quality is limited, there is a larger bucket of international development finance which delivers outdoor air quality improvements as a co-benefit of the investment,” according to the report.

This “bucket” is substantial in comparison to the small cup of financing purely for air pollution, amounting to $101 billion or 4% of total international development funding committed in the period.

While CAF welcomed this spending, it added that “an explicit focus on the air quality aspects would make for better-designed projects that deliver stronger returns on the investment.”

Money monopolised

The money doesn’t always go where it is needed most. A staggering 86% of funds for outdoor air quality improvement went to five countries: China (37%), Philippines (20%), Bangladesh (17%), Mongolia (6%) and Pakistan (6%). 

India and Nepal have the highest population-weighted exposure to air pollution  (PM2.5), yet they each received less than 1% of the total. 

Meanwhile, Africa received 5% although five of the top 10 countries with the highest average PM2.5 exposure are on the continent.

The Beijing-Tianjin-Hebei Air Quality Improvement Program received the lion’s share of funding.

At a city level, China’s Beijing (27%), Bangladesh’s Dhaka (9%) and Mongolia’s Ulaanbaatar (6%) received the biggest allocations – despite Delhi, Kokkata and Kano being the worst polluted cities.

Lack of monitoring

The report is concerned about the lack of both modelling and monitoring. At least one billion people live in countries where their governments don’t monitor air quality, Meanwhile, in sub-Saharan Africa research shows one monitor per 28 million people.

“Monitoring local air quality benefits – particularly in relation to health – can help to deliver a more comprehensive understanding of the effects of global climate interventions, allowing for more informed decision-making and resource prioritisation,” the report argues.

Ways to pay

Some 92% of funds to prevent outdoor air pollution were in the form of loans. Multilateral development finance institutions (DFIs) provided slightly over half the funding (51%), followed by bilateral DFIs (37%), then governments (7%).

However, the report recommends making “fuller use of the diverse financial toolbox” to “expand the capital base available for cleaning our air.”

It offers a number of suggestions. For multilateral development banks (MDBs), it suggests initiatives such as partnering with private and public investors to expand investment in clean air projects and provide debt capital to local financial institutions through on-lending structures.

For donor countries, the report proposes substantially increasing the outdoor air quality funding by making more grant and concessional finance available, and “recalibrating investment strategies to ensure key sectors such as agriculture and waste are not left behind.”

Image Credits: Rashed Shumon.