Climate funding is an essential part of the agreements used to reduce the impact of climate change. But is New Zealand contributing our fair share?
At the Pacific Islands Forum held in Tonga in August, climate change was a key topic. The UN secretary general, António Guterres, described how the stakes of climate change were incredibly high for Pacific countries. “If we save the Pacific, we also save ourselves,” he said. A major discussion at the forum was a climate and disaster resilience fund announced earlier this year, aiming to reach $US500m by January 1, 2026. Australia, China and the US – all major players in the Pacific, as well as significant fossil fuel producers – have pledged to commit funding.
So far, New Zealand hasn’t. “We’ll have more to say very shortly,” prime minister Christopher Luxon said during the forum in Tonga, as reported by RNZ. Aotearoa already gives Pacific countries $325m a year of climate-specific funding. But with the world getting warmer, disasters becoming more common and the Pacific one of the most vulnerable, contested areas, are we doing enough?
“Fairness is essential – it’s the glue that holds the world together. We can’t respond to the climate crisis if it’s each to their own,” says Olivia Yates, a climate change researcher at World Vision. In collaboration with Oxfam, the organisation has recently released a report investigating what New Zealand’s fair share of climate finance is, by calculating New Zealand’s overall gross national income and how much we’ve contributed to climate change.
For the first time, the research went beyond emissions since 1992 (when the United Nations Framework Convention on Climate Change was signed), and calculated New Zealand’s historical contributions since 1850. “When we calculate emissions since 1850, New Zealand’s fair share increases, because of the impact of deforestation that was caused by colonisation, and the impact of the agriculture sector,” Yates says. The numbers aren’t inspiring: based on the 1992 calculation, New Zealand’s $325m pledged contribution to climate finance was 58% of a fair contribution. But when emissions since 1850 are taken into account, New Zealand’s pledge is barely a third of what we’re responsible for, at 34%. It’s one of the many climate commitments New Zealand isn’t currently meeting.
Climate finance, and the many international agreements that govern it, can seem like the boring side of the climate crisis. Details about how to calculate who pays, how much, and where the money goes can feel trivial in comparison to the visceral stuff: holding a roof down in a cyclone, watching crops wither because they are inundated with salt water, the smell of piles of rotting fish killed by a marine heatwave. But these details (and the many initialisms that accompany them) matter, because the damage climate change is causing now, and the damage that will happen in the future, affect different communities unevenly.
“What we see with global patterns of climate change is that the countries most affected are paying more to service debt than they receive in aid from wealthy countries,” Yates says. In the report, which Yates co-authored, New Zealand’s contribution to climate finance is compared to other similarly-sized wealthy countries: Finland, Denmark and Ireland. Each has pledged more to climate financing than Aotearoa. Denmark, particularly, is well ahead, with $NZ1.46 billion pledged to lower-income countries. “After assessing historical emissions, we lag behind – we have a larger responsibility to provide our fair share of climate finance,” Yates says.
According to Yates’ and her colleagues’ calculations, New Zealand is responsible for 0.38% (for emissions since 1992) to 0.66% (for emissions since 1850) of the world’s climate commitments. That’s a fraction of a percent – but given that the global climate goal, set at Cop15 in 2009, is $NZ146 billion a year ($US100 billion), that means New Zealand should be contributing $558m-$953m to climate financing each year. That could be more after Cop29 in Azerbaijan in November, where it’s expected that a new, higher goal for climate finance will be set.
But there’s another big question in climate finance, too: is the money simply being repurposed from existing aid budgets? New Zealand has a set amount of international aid (called “official development assistance” or ODA by the UN) money – much of which is being repurposed as climate finance. There are obvious overlaps between the goals: money that builds stronger houses that can withstand increasingly frequent cyclones can alleviate a social need for housing and increase climate resilience simultaneously.
Rules known as Rio markers determine whether funding is going to biodiversity, desertification or climate change objectives and how much of it can count as climate financing. But, Yates says, these markers can still be ambiguous. “They might say this particular project supports mitigation or increases resilience, but climate change isn’t integrated into the projects.”
While climate change is an urgent issue for many low-income countries – especially the Pacific countries New Zealand has committed to send a majority of aid funding to – that doesn’t mean that other initiatives don’t need funding too. “Countries on the frontline of climate change are often so battered that critical funding for women’s rights or supporting education or reducing gender-based violence all goes into recovering from a cyclone,” Yates says. In Vanuatu, for example, 61% of the country’s GDP went to recovering from Cyclone Harold and Covid in 2020. “When so much money goes into recovering from the damage, there’s less funding for the whole community,” Yates says. (World Vision does extensive work in Vanuatu.)
The quality of aid funding matters: while multilateral loans can count as part of climate financing, aid organisations like Oxfam and World Vision consider public grants to be the best form of funding, giving communities more autonomy over how money can be spent. According to the Oxfam report, only 20% of Ireland’s funding reaches the community level. That said, only 8.6% of its overall climate finance comes from its foreign aid budget.
“It’s important to have funding and finance for separate components of a fair and equitable society – not just climate change,” Yates says. That might be difficult, with New Zealand’s aid funding already in the spotlight. Foreign minister Winston Peters has promised a review of the spending following $30m of cuts to areas outside the Pacific and Southeast Asia in the May budget.
While the details of climate financing can be confusing, they’re also important, and sure to be hotly debated at the next Cop conference. Yates would like to see funding for efforts to adapt to the effects of global heating and mitigating the emissions that cause it clearly delineated. Money for responding to loss and damage caused by climate change is essential too. At the Pacific Islands Forum, in international meetings and at the next Cop, advocates want the questions of climate finance to stay on the table. “We have an opportunity to stand with the Pacific, stand with children and communities, to create a fairer and stronger finance target,” Yates says.
