A new report from ActionAid has found that climate-destructive sectors are benefiting from subsidies amounting to an average of US$677 billion in the Global South every year.
According to the report, climate finance grants from the Global North for climate-hit countries are still “grossly insufficient” to support climate action and the necessary transitions.
Indeed, climate finance grants amount to just 1/20th of the Global South public finance going to fossil fuels and industrial agriculture, it says.
Between 2016 and 2023, the fossil fuel sector across Global South countries received an annual average of US$438.6 billion in publicly financed subsidies.
Meanwhile, the industrial agriculture sector benefited from publicly financed subsidies worth an average of US$238 billion a year between 2016 and 2021.
The impact of this lack of climate finance for solutions in the Global South is that renewable energy receives 40 times less public finance than the fossil fuel sector.
Commenting on the report, Arthur Larok, Secretary General of ActionAid International said that it exposes wealthy corporations’ parasitic behaviour: “They are draining the life out of the Global South by siphoning public funds and fueling the climate crisis. Sadly, the promises of climate finance by the Global North are as hollow as the empty rhetoric they have been uttering for decades. It is time for this circus to end, we need genuine commitments to ending the climate crisis.”
The report makes a number of recommendations, including:
- Redirecting public finance to support just transitions from climate-destructive fossil fuels and industrial agriculture, towards people-led climate solutions that safeguard people’s rights to food, energy and livelihoods.
- Scaling up decentralised renewable energy systems to provide energy access, and gender-responsive agricultural extension services that offer training in agroecology and adaptation.
- Wealthy countries should provide trillions of dollars in grant-based climate finance each year to Global South countries on the front lines of the climate crisis, including by agreeing to an ambitious new climate finance goal at COP29 that reflects this scale.
- The banking and finance sectors should be regulated to end destructive financing, with regulations that set minimum standards for human rights, social and environmental frameworks, and transformation of the international financial institutions that are pushing climate-vulnerable countries into spiralling debt
For the full report, head here.