The importance of climate finance additionality – who loses when climate adaptation money taken for Overseas Development Asisstance?

During the last year’s COP15 Climate Change Conference in Copenhagen it was unilaterally agreed to create a special Global Fund to assist the countries (in particular developing and small islands countries) with necessary adaptation and mitigation activities to counteract climate change consequences.


However, it has never been clearly stated where this money is to come from, how it would be different from other development aid - for example previous Overseas Development Asisstance (ODA) commitments (which by the way are still far from being delivered) – or how they would be divided. Many worries money to be “simply” re-shuffled with a dramatic consequence hitting the most developing counties and the poor.

Having said this, it is not a surprise that many organisations and individuals working in the field of development and aid have expressed worries of climate adaptation monies diverted from ODA funds. In a recently published report of ONE – a development and aid NGO – such an impact assessment scenario is presented. What will happen if money for climate adaptation is taken from the current ODA pool?

The question is far from being rhetoric. An answer to it has been already known, even if intuitively. Clearly, Africa will be the biggest loser. Obviously, without a strict definition on climate financing needing to be additional to existing and promised aid flows, ODA risks being pillaged. Currently, as much as 38% of global ODA is spent in SAA and the World Bank-estimated share of SAA in climate adaptation needs is 22%.

Failure to commit new money both in terms of public budgets and innovative sources of finance will result in the already off-track Millennium Development Goals (MDGs) getting another yet heavy blow. The health, education and aid-for-trade sectors will lose out as money is diverted towards agriculture, coastal defences and water management. Mind you – the health and education sectors are the most vital sectors for countries economic development.

It is therefore crucial to stress the importance and necessity of climate finance being additional to aid. Shall it not be explicitly stated and implemented, a threat of aid diversion allocated according to adaptation needs (which are, yet, relatively low in SAA compared to other regions) exists. This would lead to SAA’s aid needs neglected. In particular, the health, education and aid-for-trade sectors will suffer the most.

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Last modified on February 27 2010.