PARIS, The influential economic policy body, the Organisation for Economic Cooperation and Development (OECD), Wednesday said development aid from the OECD should be more aligned with and should favour climate action while aid for fossil fuel activities should be reduced to zero.
In a report on where donor aid ends up and where it could better be used to help climate goals, the Paris-based OECD warned that only 20 percent of “soft and hard aid” through Development Assistance Committee channels included a focus on climate change in the 2013-17 period.
More broadly, however, the report noted that 40 percent of multilateral aid from UN Agencies included a focus on the climate issue, or double the OECD average.
There were some “encouraging” signs whereby OECD members were “moving in the right direction to bring development aid in line with climate goals,” but efforts must continue until there is “zero aid going to fossil fuels and more going to tackle climate change,” OECD Secretary-General Angel Gurria said in a statement alongside the report.
To demonstrate the global trend towards climate-friendly projects, the report noted that global development finance going to support renewable energy doubled in volume between 2016-2017, reaching USD 12.2 billion compared with USD 5.6 billion in 2014-15.
The OECD also indicated nonetheless that USD 283 million of total development aid flows of USD 3.9 billion were devoted to fossil fuel projects, with 23 percent of the used amount coming from OECD nations and 77 percent from other multilateral sources.
While there are signs of positive movement in favour of ecologically preferred projects, the movement is not taking place fast enough, the report said.
“Momentum is growing as more bilateral and multilateral providers commit to aligning development flows with the Paris Agreement,” the OECD said.
“Yet progress is not happening quickly enough, and many donors still lack mandates, resources, incentives and strategies to ensure they are factoring in climate change. In addition to development flows, export credits are a major public instrument for trade promotion that undermine climate goals.” According to an analysis of OECD countries that have reported data, 58 percent of official export credits that support energy production benefit fossil fuel technologies and many of these activities that are inconsistent with the Paris Climate Agreement reached in 2015 but from which the United States has withdrawn.
Source: Kuwait News Agency