British News Agency

UK-based Carbon Brief, which specialises in climate change science and policy, together with the Guardian newspaper, analysed previously unreported UN submissions and data from the Organisation for Economic Co-operation and Development (OECD) to reveal how billions of dollars of public money intended for tackling global warming are being used.

The study, published while the 2025 UN Climate Change Conference (COP30) is underway in Brazil, shows that there is, in general, a functioning system that channels capital from wealthy polluters to vulnerable countries, helping them to clean up their economies and adapt to a warmer world.

However, the research also finds that the distribution of a large share of these funds is not subject to central oversight and is left entirely to the discretion of individual countries, meaning that political interests can shape decisions and money is not always directed to where it is most needed.

Although official data are not comprehensive enough to track all recipients of climate finance, the Guardian’s analysis shows that roughly one-fifth of the funds in 2021 and 2022 went to 44 of the world’s poorest states, known as least developed countries. Much of this support came in the form of loans rather than grants.

Some of these least developed countries received more than two-thirds of their climate finance as loans, with repayment terms that risk driving their governments even deeper into debt. In Bangladesh and Angola, the share of loans reached 95 percent or more.

Most of the world’s developed countries provide finance to support climate action in developing states both bilaterally and through multilateral institutions such as development banks. At the UN summit held in Copenhagen in 2009, rich countries, acknowledging their greater responsibility for climate breakdown and their greater capacity to fund solutions, pledged to mobilise 100 billion dollars (76 billion pounds) a year by 2020.

Yet analysis of the latest submissions covering more than 20,000 global projects in 2021 and 2022 – the years in which the Copenhagen target was finally met, albeit late – shows that large sums went to oil states and to China, the world’s second-largest economy.

The UAE, a fossil fuel exporter with a GDP per capita similar to that of France and Canada, received more than 1 billion dollars in loans from Japan that were recorded as climate finance. Projects include 625 million dollars for an offshore electricity transmission project in Abu Dhabi and 452 million dollars for a waste incineration plant in Dubai.

Saudi Arabia, which ranks among the world’s top ten carbon emitters due to its vast oil fields and majority stake in Aramco, received around 328 million dollars in Japanese loans – 250 million dollars for an electricity company and 78 million dollars for a solar power plant.

Joe Thwaites, a climate finance advocate at the Natural Resources Defense Council, said that overall flows of climate finance have increased, but they are still not reaching the poorest and most vulnerable communities in “sufficient” amounts, and that heavily indebted countries need more grants and concessional loans.

“This is not charity,” he added. “It is a strategic investment that addresses the root causes of many of the crises we see every day: the cost of living, supply chain disruptions, natural disasters, forced migration and conflict.”

Over the two years examined, about 33 billion dollars were pledged to least developed countries such as Haiti, Mali, Niger, Sierra Leone, South Sudan and Yemen. A much larger sum – around 98 billion dollars – went to developing countries. This wider group includes lower-middle-income countries such as India and upper-middle-income countries such as China. A further 32 billion dollars could not be classified. India was the largest single recipient, with about 14 billion dollars during the reporting period, while China received some 3 billion dollars, mostly from multilateral banks.

The analysis indicates that the low share going to least developed countries partly reflects their smaller populations, but it also shows that the composition of the “developing countries” group is becoming an increasing source of tension in climate negotiations.

For example, China’s economy has boomed since the UN classified it as a developing country in the 1990s, and its per capita emissions have now surpassed European levels. Although China is considered a major provider of finance for overseas climate projects, it resists efforts to have its contributions formally accounted for. The UN’s development categories have not changed since they were created in 1992.

Sarah Colenbrander, climate director at the Overseas Development Institute, said: “This allows countries such as Israel, Korea, Qatar, Singapore and the UAE – which have become wealthy with very large carbon footprints over the last 30 years – to avoid their international responsibilities. It is absurd that such countries remain in the same category as Togo, Tonga and Tanzania.”

Some of the world’s poorest countries receive more than two-thirds of their climate finance in the form of loans, despite warnings that many of them will struggle to meet the conditions and interest payments.

Ritu Bharadwaj, climate finance director at the International Institute for Environment and Development, said: “The hidden story of climate finance lies not in the volume of commitments but in their form. Climate finance is increasing the financial burden on poor countries. Even when money is provided as a concessional loan, it often comes with conditions that may benefit the lender more than the recipient.”

According to World Bank data, over the same period the least developed countries paid back a total of around 91.3 billion dollars in external debt service – three times the size of their climate finance budgets. Over the last decade, external debt repayments by the poorest countries have tripled, rising from 14.3 billion dollars in 2012 to 46.5 billion in 2022.

Shakira Mustapha, a finance expert at a Disaster Protection Centre, said: “Under conventional thinking, taking on more debt is not necessarily a bad thing if it is used to finance expenditure that boosts growth. My concern is whether countries are taking on new debt simply to repay old debt – and whether we are just postponing the problem.”