Ministers have come under fire for allegedly altering the criteria to meet the UK’s international climate commitments. This move involved reallocating £1.7 billion from an existing aid budget to support environmental initiatives in poorer nations.
The government’s official aid watchdog, the Independent Commission for Aid Impact (ICAI), raised concerns that despite these accounting adjustments, Downing Street may still fall short of the £11.6 billion target due to significant cuts to overseas aid budgets.
While Members of Parliament openly discussed reclassifying aid contributions to align with climate goals last year, the recent evaluation by ICAI marked the first time specific figures had been cited to illustrate the extent of these changes and question their legitimacy.
The report stated, “To meet the UK’s climate finance commitment, the government opted to adjust its accounting methodology, essentially moving the goalposts for achieving the £11.6bn,” adding that without the changes ministers had no chance of meeting the target.
The report added that “All of these changes meant that the government counted an extra £1.724bn towards the target, while countries expecting support from the ICF [international climate finance] pledge did not receive any additional money to tackle climate change.”
The report further characterized the reclassifications as substantial, constituting 15% of the overall UK climate commitment.
This development has not only raised concerns about the government’s ability to fulfill its international climate leadership role but has also tarnished its reputation in this area.
The UK’s £11.6 billion commitment emerged from various UN climate conferences, earning widespread acclaim for positioning the UK as a frontrunner in climate finance contributions.
This commitment was the UK’s part in the global initiative, established in 2009, to raise $100 billion annually for climate finance.
The £11.6 billion pledge, announced at the UN General Assembly in 2019, was explicitly intended to span five years until March 2026.
Government Not Out Of The Woods Despite Accounting Gimmick
However, according to the ICAI report, the government still faces the challenge of securing 55% of the pledged amount in the final two years of this commitment.
A significant portion of the £11.6 billion commitment, amounting to at least £2.6 billion, is now scheduled for expenditure in the final year, 2025-26, following a general election.
This approach of backloading poses a considerable financial challenge for any prospective Labour government’s aid program, creating substantial budgetary pressure in the later years of the commitment.
“We are concerned that by altering its accounting methods and identifying existing spend as international climate finance to include that funding in the total, rather than providing new money, the UK is offering less additional assistance than was originally promised. It may also not be as suited to the needs of the most vulnerable countries at risk from climate change, notably the least developed, conflict-affected, and small island developing states.”
Dr Tamsyn Barton, ICAI chief commissioner
Ministers found the £1.7 billion by restructuring core contributions to multilateral development banks, designating them as environmentally friendly, with a value exceeding £750 million.
Additionally, they classified a fixed 30% portion of humanitarian programs operating in the 10% of countries most susceptible to the climate crisis as green finance, totaling £470 million.
This essentially means no extra financial support for the regions facing the severe climate impacts.
The report highlighted that, as part of this reclassification process, a greater portion of UK aid funding has been converted into loans rather than grants through multilateral development banks.
This method was deemed less suitable for the poorest and most climate-vulnerable nations.
“There is also insufficient transparency about the new accounting, making it difficult to hold the government to account for its climate finance commitments,” the report added.
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