Ministers have been accused of “moving the goalposts” to meet the UK’s international climate commitments after £1.7bn of an existing aid budget was reclassified as providing poorer countries with environmental funding.
The government’s official aid watchdog says that even with these accountancy changes, Downing Street still might not meet the £11.6bn target due to the scale of cuts to overseas aid budgets.
MPs did not disguise last year that they were undertaking a reclassification of what aid could be regarded as contributing to the climate target, but this is the first time the Independent Commission for Aid Impact (ICAI) has put a figure on the scale of the changes or passed comment on its validity.
The report states: “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.
“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 also describes the reclassifications as large and representing 15% of the total UK climate pledge, adding the government’s reputation as a leader in this field has been damaged.
The UK’s £11.6bn pledge arose from various UN climate conferences and was widely praised at the time as setting the UK as a leader in climate finance donations. It was the UK contribution to meeting the worldwide pledge to mobilise $100bn annually for climate finance, a global pledge first made in 2009.
The UK made the specific £11.6bn pledge at the UN general assembly in 2019, saying the money would cover the five years to March 2026. The ICAI report said the government still needs to find 55% of the £11.6bn in the final two years of the pledge.
At least £2.6bn of the pledge is now not due to be spent until the final year, 2025-26, after a general election. Such backloading would place great budgetary pressure on any incoming Labour government aid programme.
The ICAI chief commissioner, Dr Tamsyn Barton, who led the review, said: “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.”
Ministers found the £1.7bn by reclassifying core contributions to multilateral development banks as green (worth over £750m), classifying as green finance a fixed proportion of 30% of humanitarian programmes operating in the 10% of countries most vulnerable to the climate crisis (£470m) – meaning no additional financing for those hardest hit. Something described as a scrubbing exercise found an extra £200m in green finance.
The report adds that as part of the reclassification more of UK aid funding has been translated into loans rather than grants via multilateral development banks, a method less appropriate for the poorest and most climate-vulnerable countries.
“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 adds.
