New analysis: Canada’s climate finance falls far short of obligations despite recent progress

SHARM EL-SHEIKH, EGYPT, 14 November 2022:

As COP27 negotiations heat up over the critical funding gaps for mitigation, adaptation, and loss and damage, new analysis shows major transformation in Canada’s climate finance approach in recent years – but a long way to go to meet its obligations.

The new research, summarized in infographics released by Climate Action Network – Réseau action climat Canada (CAN-Rac) and the Canadian Coalition on Climate Change and Development (C4D), shows that Canada exceeded its 2015-2021 climate finance target, committing almost CAD 2.7 billion. However, the quantity remains far short of Canada’s fair share of the global need, and even last year’s pledge to double climate finance only gets us halfway there.

With Environment and Climate Change Minister Steven Guilbeault having participated in a roundtable today on developed countries’ failure to meet the annual USD $100 billion goal, COP27 presents Canada with the opportunity to step up and repair trust. CAN-Rac and C4D call on the federal government to improve both the quantity and quality of its climate finance, and to speak out in support of the creation of a dedicated UN financial facility to address loss and damage caused by climate impacts.

Key facts:

• In 2020, Canada contributed just over half of its fair share of bilateral climate finance, and only one-third of its fair share of overall climate finance.

• At the same time, Canada provided CAD 18 billion to fossil fuel companies – almost twenty times the amount dedicated to bilateral climate finance

• Canada accounted for 2.5% of principal-purpose bilateral climate finance commitments among OECD countries in 2020 – less than one-tenth of Germany’s share.

• Just over one-third (36%) of Canada’s climate finance from 2016-2021 went to adaptation projects

• From 2018-2020, the Canadian government distributed nearly 80% of its bilateral climate finance as loans – a greater share than any other DAC country except for Japan and France – increasing the debt burden on developing countries

• Canada’s finance remains heavily skewed towards Multilateral Development Banks (MDBs): CAD 1.46 billion, or 54% of Canada’s total climate finance commitments from 2016-2020, was channeled through initiatives within MDBs, the majority of which slow to deliver funds and are less accessible to climate-vulnerable countries.

Climate Action Network Canada and the Canadian Coalition on Climate Change and Development call on the government to bridge the gaps and respond to the needs of developing countries by:

• Increasing climate finance by CAD 1 billion annually until 2025/2026

• Dedicating 50% of climate finance to adaptation, entirely in the form of grants

• Clearly and publicly announcing its support for the creation of a loss and damage finance facility at COP27. Funding must be additional and in no way take away much-needed resources from mitigation and adaptation

Quotes:

“People are fighting for their lives. Rich countries’ pollution are causing unprecedented flooding, fires, heat waves, droughts, crop failure, famines, and loss of livelihood for people in developing countries. They need support to transform energy systems, to build resilience and to recover from disasters without going under – and Canada and its allies are still offering peanuts.

“Canada has taken a step forward with its co-leadership of the climate finance delivery plan and its increase in support. But our government can’t repair the broken trust until it puts its money where its mouth is and commits to doing its fair share with funding that responds to the needs of the Global South.”

–Eddy Pérez
International Climate Diplomacy Director, Climate Action Network – Réseau action climat Canada

“This report is a crucial tool for assessing Canada’s climate finance performance and plans. At COP27, we’re seeing new details emerge on where and how Canada plans to dedicate funding, and they show progress – but the bottom line remains that it’s not enough. We need to ensure that Canada’s climate finance addresses the critical needs of developing countries, including shared goals on gender transformation, meaningful change for those most vulnerable, and sustainable development.”

–Naomi Johnson
Senior Policy Advisor, Canadian Foodgrains Bank (co-chair of Canadian Coalition on Climate Change and Development)

Resources

• See the infographics summarizing highlights of the research

• View the full data and read the methodology

• Read more detailed recommendations from the Canadian Coalition on Climate Change and Development

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