Development funding for fossil fuel-based energy projects jumped 80 per cent in 2023 to $9.5bn, up from $5.3bn in 2022, even as toxic air causes more than 8m premature deaths annually, according to a new report.

Governments continue to channel billions more in international aid into projects that prolong fossil fuel use than into tackling air pollution, the Clean Air Fund found. Direct support for outdoor air quality initiatives fell 20 per cent to $3.7bn, representing just 1 per cent of all international development financing, according to the organisation’s annual State of Global Air Quality Funding report released Wednesday.

However, total international development aid for clean energy projects with air quality co-benefits reached $32.6 billion in 2023, nearly 3.5 times fossil fuel investments — a marginal increase from $31.8 billion in 2022.

“Air pollution is a public health emergency hiding in plain sight,” said Jane Burston, chief executive of Clean Air Fund. “Every year, toxic air kills more people than tobacco — contributing to 8.1 million deaths — yet governments are still funnelling billions into the fuels that cause it.”

Beyond international aid budgets, national fossil fuel subsidies from governments totalled $7 trillion globally in 2022, equivalent to 7.1% of global GDP, according to International Monetary Fund data. That represents 1,400 times more than what flows to clean air projects, even as roughly 85% of global air pollution stems from burning fossil fuels and biomass.

“You can’t build healthy societies on dirty air,” Burston added. “When aid money props up fossil fuels instead of cleaning our air, it’s not just bad for the planet — it’s deadly for people.”

The scale of the mismatch has prompted calls for a fundamental reorientation of development finance. World Bank research shows that integrated air quality and climate policies could save more than 2 million lives annually by 2040 while boosting global GDP by up to $2.4 trillion each year.

As funding continues flowing towards fossil fuels, the report calls for development institutions to go in the opposite direction: embed clean air objectives at the core of climate and development finance, redirect fossil fuel funding toward cleaner transitions and target resources toward currently underfunded regions, particularly Africa.

The findings come as governments face pressure to deliver on a pledge made earlier this year at the World Health Organization’s World Health Assembly to halve the health impacts of anthropogenic air pollution by 2040.

Air pollution ranks as the world’s second-largest health risk factor after high blood pressure, claiming over 8 million lives annually. Fine particulate matter known as PM2.5 — particles smaller than 2.5 micrometres — penetrates deep into the lungs and bloodstream, damaging the cardiovascular system, triggering strokes and heart attacks, and contributing to dementia, cancer and respiratory disease.

The WHA resolution marks the first time air quality has been included in a WHO roadmap with a clear global health target tied to pollution reduction. Under South Africa’s G20 presidency, air quality was also elevated as a standalone priority for the first time in the G20’s environment and climate workstream.

But with the Trump administration having axed the vast majority of USAID, which contributed 29 per cent of official development assistance in 2023 – by far the largest single provider of aid in the world, supporting everything from infectious disease prevention to food security programmes – development budgets are under strain globally.

Wider cuts by OECD donors could see development aid fall by 9 to 17%, with least developed countries facing declines of 13 to 25%, respectively. Air pollution, already a relatively minor component of global aid budgets, representing just 1 per cent of international development funding, risks falling by the wayside. Experts warn that momentum risks stalling before meaningful progress can be made.

“Governments pledged to halve air pollution harm by 2040, but the money is still flowing the wrong way, Burston said. “With budgets already under pressure and the world’s largest development donor shutting down, we cannot afford to keep bankrolling fossil fuels. Unless we change course, millions more people will die from toxic air. Every dollar spent on fossil fuels pushes that goal further out of reach.” 

Most polluted regions are left behind

The limited funding available for air quality is highly geographically concentrated. Three countries — the Philippines, Bangladesh and China — received 65 per cent of all outdoor air quality finance between 2019 and 2023, while regions bearing the heaviest pollution burdens received almost nothing.

Nine in ten air pollution deaths occur in low and middle-income countries, where resources to respond are most limited. The World Bank projects deaths from outdoor air pollution will rise from 5.7 million in 2020 to 6.2 million by 2040 without stronger action. 

Sub-Saharan Africa experienced a 91% collapse in outdoor air quality funding in 2023, dropping to just $11.8m — less than 1 per cent of global clean air support and roughly equivalent to the cost of a single superyacht. The staggering drop occurred as the region faces the world’s fastest urbanisation rate, leaving communities increasingly vulnerable to worsening air pollution.

Seven of the ten countries with the highest air pollution levels received less than $1 per person in total air quality financing in 2023. Countries including Cameroon, the Democratic Republic of Congo and Burundi received as little as $0.02 per person.

“Air pollution is the world’s largest environmental health crisis, yet it receives neither the attention nor the resources it demands. Each year, eight million people die prematurely from a crisis that is largely preventable. Today, nine in ten of these deaths occur in lowand middle-income countries,” Dr Dion George, South Africa’s minister of forestry, fisheries and the environment, wrote in the report’s foreword. “Without urgent action, this tragic toll will continue to rise.”

Children face particularly severe impacts. Air pollution causes over 700,000 deaths annually in children under five, making it the second leading risk factor for child mortality worldwide after malnutrition. Air pollution is also linked to 34 per cent of preterm births globally, with 570,000 neonatal deaths attributed to pollution exposure in 2021. 

“What we see currently is not so good – the availability of data from public actors is poor, and when available, the level of finance directed to improve air quality is far too low,” said Barbara Buchner, global managing director of Climate Policy Initiative, which co-authored the report. “But our work confirms that the opportunities are tremendous. With public budgets constrained, increasing air quality finance is one the most impactful investments that can achieve multiple goals: to address climate change, strengthen economies, and significantly improve daily life for millions globally.”

The economic burden is also crushing. World Bank analyses place global health damage costs at $8.1tn annually, equivalent to 6.1 per cent of global GDP. Lower-middle-income countries bear losses equivalent to 9 per cent of GDP compared to 2.8 per cent in high-income nations. India alone loses $95bn annually from reduced productivity, work absences and premature deaths, while China spends $44bn annually on healthcare for PM2.5-related illness.

In 2023, development funders committed 2.5 times more to fossil fuel-prolonging activities than to outdoor air quality improvements. The tension between energy access and air quality poses particular challenges for developing countries. While fossil fuel projects may offer faster paths to expanding electricity access, they lock in polluting infrastructure that carries severe long-term health costs.

“Financing remains a major barrier to progress,” George wrote. “The evidence in this report is stark. In 2023, outdoor air quality funding fell by a fifth, even as the health burden grew.”

Funding for projects with air quality co-benefits — initiatives that improve air quality without explicit objectives to do so — rose 7% from $27.1 billion in 2022 to $28.8 billion in 2023. Examples include electric vehicle incentive programmes and projects that promote alternatives to crop residue burning.

Between 2019 and 2023, 86% of total air quality funding was directed towards projects that also addressed climate change, the report found. Transport sector investments attracted 61% of outdoor air quality funding during this period.

In the Greater Beijing-Tianjin-Hebei Region, coordinated action supported by the World Bank, Asian Development Bank and KfW reduced annual average PM2.5 concentrations by 44.2% from 2015 baseline levels by 2030, showing policy action is possible and effective.

“We know how to fix this,” Burston said. “Clean air policies deliver results within months — healthier lungs and fewer deaths. The science is clear, the technology exists, and the health benefits are immediate.”

Image Credits: Pete Markham.