Climate Action Network UK (CAN-UK) submission to the International Development Committee (IDC) open call for potential topics of inquiries.

9th December 2024

Introduction

Climate change is an existential threat to all, but developing countries disproportionately suffer the greatest costs and consequences. How the UK responds to this through the provision of climate finance must be of central importance to the IDC.

Developed countries including the UK, have an obligation under the UNFCCC and Paris Agreement to provide “new and additional” climate finance under the principle of common but differentiated responsibilities and respective capabilities – whereby all must act, but countries with greatest historical emissions and capacities must decarbonise fastest and provide the finance needed by developing countries.

As the fifth largest historical emitter and sixth largest economy the UK has both the responsibility and the capability to provide far more climate finance,[i] and changing approaches by successive governments have called into question the quality of UK climate finance.

With COP29’s failure to deliver a global climate finance goal that meets the needs of developing countries,[ii] the onus is now on countries including the UK to live up to the principles and spirit of climate finance, and increase quantity and improve the quality of climate finance.[iii] 

It is therefore timely to scrutinise the erosion of UK climate finance quality and make recommendations to inform the next round of UK ICF (April 2026 to March 2031) and beyond, to outline what is needed to fulfil UK climate leadership ambitions and reset the UK’s partnership with the Global South.

Proposed focus

Scrutinise the credibility of UK ICF:

• The UK’s definition of how ICF is “new and additional”. This has changed over time in UK submissions to the UNFCCC and the UK is not credible on additionality.
• What counts as ICF. From transformational climate action to proportions of existing development projects, what ‘counts’ as ICF has changed. In 2023, £1.6bn of existing development finance was relabelled ICF.[iv]
• UK support to UN Climate Funds. Funds for climate action in developing countries have been established under the UNFCCC with more inclusive governance structures. [v] However, despite the UK playing a key role, these vital Climate Funds are often sidelined in favour of the WB and MDBs ill-suited to climate finance given their continued investment in fossil fuels, poor transparency, limited voice for recipient countries, and poor track record on reaching the most vulnerable.[vi]
• Grants v loans. The UK’s previous strong track record on grant finance is diminishing, despite the interconnectedness between debt and climate change.[vii]
• Additional sources of finance. Many options exists to generate the new and additional finance need for climate action at home and to scale up finance needed by developing countries, without unfairly costing UK households or cutting into the aid budget.[viii] Options for sources other than ODA should be scrutinised by parliament.
• Competing priorities: ODA and climate finance require different objectives, actions, and geographic focus. ODA is required for poverty reduction. Climate finance is required for low- and middle-income countries to transition away from fossil fuels (1.5°C), adapt, and address economic and non-economic losses and damage. Approaches must be consistent, but all areas require adequate finance.

Additional information

• Have you ever engaged with Parliament before (e.g. made a submission to a select committee)?

Yes, CAN-UK has submitted evidence to IDC inquiries and engaged with APPGs and events in parliament organised by Bond.

• Do you have personal or field experience related to international development issues?

Yes, I am a development professional and CAN-UK members include international development organisations working with communities affected by climate change.[ix]

• If you are invited to pitch your idea to the Committee, would you be able to travel to London and back within the same day?

Yes.

References and footnotes

Climate Action Network UK Limited is registered in England and Wales.

Registered Company Number 14820042. Registered Address: 10 Queen Street Place, London, EC4R 1BE