Although governments worldwide have pledged to cut carbon emissions in recent years, new data shows that investment in fossil fuel projects continues to outpace the investment in renewable energy and clean air initiatives.
While funding for projects aimed at reducing outdoor air pollution briefly overtook funding for fossil fuel projects in 2021, the following year saw a sharp reversal in this trend, with fossil fuel projects receiving nearly $700m more in overseas funding in 2022, according to a report by the Clean Air Fund.
The Clean Air Fund is a philanthropic organisation whose funders include Bloomberg Philanthropies, Ikea and McCall MacBain. Through this report, the group offers the only global analysis of development funding aimed at reducing air pollution — a key indicator of global progress towards decarbonisation.
Fossil fuel funding quadrupled in 2022, reaching $5.4bn from just $1.2bn the previous year, while clean air funding stalled, contributing less than 1% of development funding for the year.
“Directing limited public funds towards fossil fuel projects and subsidies is locking in harmful emissions for decades to come,” said Barbara Buchner, global MD of Climate Policy Initiative, which co-authored the report.
Outdoor air pollution is responsible for an estimated 8.3-million deaths each year, more than half of which are attributed to fossil fuel emissions, given their impact on premature deaths and diseases such as cancer, heart disease and dementia.
This carries significant economic costs as well, as air pollution takes a toll on productivity and healthcare systems. The World Bank estimates that the “dirty air tax” erodes global GDP by over 6% each year.
The problem is compounded by the structure of the aid, said the Clean Air Fund, as 92% of clean air funding comes from loans rather than grants. “This loan-heavy model would place an unsustainable burden on low-income, heavily polluted countries that cannot afford to take on additional debt,” the study said.
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.
— Adalberto Maluf
Brazil’s national secretary of urban environment and environmental quality
“This stands in stark contrast with other areas of international development funding, such as healthcare and education. On average, 63% of official development assistance is funded as grants.”
Additionally, this clean air funding is not distributed equally across nations, putting developing nations such as SA at a further disadvantage.
The clean air funding for all of Africa and the Middle East combined equates to only a third of the funding received by a single Asian country: the Philippines. This means the limited clean air funding that does exist largely does not reach the regions and communities most in need.
A landmark report released last week by the International Renewable Energy Agency (Irena) tells a similar story, showing that Africa represented only 1.6% of the global share of newly installed renewable power capacity last year.
Furthermore, Africa’s year-on-year deployment of renewable power capacity has grown at a rate nearly half that of Europe, despite having a population which is almost three times larger. “Indeed, given the relatively small number of projects completed in Africa each year, renewable power investments in Africa are highly volatile and declined 47%, from $8.98bn in 2022 to $4.79bn in 2023,” reads the report.
In Sub-Saharan Africa, the per capita transition-related investment received last year was 40 times lower than the world average, as “emerging and developing economies continue to face financing gaps that undermine access to capital-intensive energy transition technologies”.
Despite hitting a record high of $570bn last year, global investment in renewable energy capacity is still behind relative to the Paris Agreement goal of limiting the average global temperature rise to 1.5°C by 2030.
Achieving this goal would require tripling the investment in renewable capacity to $1.5-trillion every year between 2024 and 2030, doubling the world’s energy efficiency and adding 7.3 terawatts of renewable capacity in less than six years. Governments’ current plans are projected to fall short of this goal by 34%, leaving a collective gap of 3.8 terawatts of capacity.
As Brazil’s national secretary of urban environment and environmental quality, Adalberto Maluf, puts it: “It doesn’t have to be this way.
“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.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.