Funding for fossil fuel projects overtakes that for air quality schemes

The Clean Air Fund have published their annual The State of Global Air Quality Funding report, which provides a unique global analysis of clean air funding from governments and philanthropic foundations.

Last year’s report brought some very welcome news, that in 2021, international development funding from donor governments, agencies and development banks for outdoor air quality projects exceeded funding for fossil fuel projects for the first time. The sums being $2.3 billion as compared to $1.5 billion.

This year’s report reveals an astonishing reversal in that progress, with funding for fossil fuel projects soaring from that $1.5 billion figure to a scarcely credible $5.4 billion. 

Jane Burston, CEO of the Clean Air Fund, said: ‘This shocking increase in aid funding to fossil fuels is a wake-up call. The world cannot continue down this path of propping up polluting practices at the expense of global health and climate stability. We need to see a drastic shift towards supporting clean air initiatives and debt-free aid to communities who need it most.’

Outdoor air quality funding grew less spectacularly, to $4.7 billion. This represents a recovery after a period in which a lot of funding was prioritised into COVID-related projects. 

As the report observes however, this figure stands in stark contrast to the $8.1 trillion that The World Bank estimates to be the annual global cost of health damage caused by air pollution. It also represents a mere 1% of total annual international development funding.

For the first time, this year’s report takes particular aim at black carbon, which is consistently overlooked by funders. It points to the success of concerted action against methane (through the Global Methane Pledge at COP26) saying: ‘The urgent need for action on black carbon funding  suggests that a similar pollutant-specific drive from the international climate community also should be considered.’

The report does give credit where it’s due and it cites The World Bank, the UK Foreign, Commonwealth & Development Office and the Asian Development Bank (which launched the Asia Clean Blue Skies Programme) for their funding of a variety of projects focussed on air quality.

The fact that funding is provided to focus on air quality is emphasised because in 2022, 85% of air quality funding went to projects through which improved air quality was a co-benefit. Only 15% ($4.7 billion) went to projects that have air quality as their primary objective.

In the four years between 2018 and 2022, 61% of air quality funding went to transport projects, prompting the report to observe: ‘international development funders should also ensure that potentially high-impact projects in sectors such as waste, buildings and agriculture are not overlooked.’  Those three sectors account for just 8% of the total funding between them.

As with last year, the report also highlights the lopsided geographical distribution of the funding, pointing out that over four years, the Philippines received three times more funding than the whole of Africa and the Middle East combined. And of the funding that the latter region did receive, more than half went to Egypt.

Similarly, of the World’s ten most polluted countries, seven of them received 1% or less of global funding.

Another concern raised by the report is that 92% of recent funding has been delivered as loans, with only 6% being in the form of grants. This raises the danger that, with debt servicing costs expected to soar for the world’s poorest countries, they will be reluctant to take on more, particularly in areas such as air quality.

In 2015, when countries signed the Paris Agreement, they agreed to set a New Collective Quantified Goal (NCQG) to direct more funds toward climate action in developing countries. The NCQG is meant to be adopted this year at COP29 in Azerbaijan and to that end, The Clean Air Fund is urging a significant increase in global air quality funding, with an emphasis on providing grants instead of loans to ensure equitable support for vulnerable countries.

Adalberto Maluf, National Secretary of Urban Environment and Environmental Quality in Brazil, commented: ‘Even as countries pledge to reduce their emissions, increase their climate change ambitions and transition away from fossil fuels, the figures tell a different story. International public funding does not come close to meeting the scale of the challenge or unlocking the significant opportunity of investment in air quality. What funding exists often does not reach the most affected geographies, communities and vulnerable people. It doesn’t have to be this way.

‘Brazil as G20 chair and the incoming COP Presidency is proud to be championing another vision for the planet: one where humans and nature co-exist in harmony, where we respect the environment we are blessed with, and where economic prosperity doesn’t come at the expense of our health and wellbeing.’

Barbara Buchner, Global Managing Director of Climate Policy Initiative, which co-authored the report, said: ‘Air pollution and climate change are driven by the same root causes, and share the same solutions. Directing limited public funds towards fossil fuel projects and subsidies is locking in harmful emissions for decades to come. International aid and climate finance should prioritize initiatives that improve air quality, delivering significant health, economic, and climate benefits.’

The report can be read here.