Please refer to the attached file.
SUMMARY
Tackling the climate crisis requires urgent, collective action, and climate finance is essential to this effort. Under the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement, developed countries have an obligation to provide assistance to developing countries to respond to climate change. The delivery of this international climate finance was no frivolous promise, but one that was endorsed by practically all governments of the world and reconfirmed time and again in successive global climate negotiations as well as the 2025 Advisory Opinion of the International Court of Justice, which confirms that developed countries have a legal obligation to provide sufficient climate finance. Climate finance is not only a matter of climate justice but also critical for enabling vulnerable countries to implement their Nationally Determined Contributions (NDCs), National Adaptation Plans (NAPs) and other climate plans. Despite these commitments, progress in the delivery of climate finance has been fragmented. At the international level, climate finance flows have been insufficient to meet developing countries’ needs and are made up primarily of loans that countries will eventually have to pay back. Climate finance is also often inaccessible, top-down and misaligned with local realities. At the national level, governments often fail to engage society meaningfully in the development and implementation of climate plans while, at the local level, civil society actors – particularly the most marginalized – may be excluded from decision-making, planning and budgeting processes, as well as from the benefits climate finance is intended to deliver. As climate impacts escalate, it is essential to ensure that climate finance is sufficient, accessible and participatory, and reaches the local level. Civil society actors play a vital role in this, by shaping, implementing, monitoring and evaluating climate projects, plans and budgets, including NDCs. Drawing on 21 studies across the Global South (see Annex), this report examines how climate finance is delivered and governed at regional, national and local levels. It identifies common challenges and opportunities, highlights good practices to influence civil society, and offers recommendations to improve the accessibility, equity and accountability of climate finance.
Key findings
Ambiguity and over-reporting must be addressed. Climate finance is notoriously difficult to quantify due to varying definitions and ambiguous reporting rules, giving providers significant discretion over what counts as climate finance. Studies have shown that providers use reporting practices that overstate the actual level of climate finance, relying on generous assumptions about the climate relevance of projects and the way different financial instruments are valued. Most climate finance is delivered through loans rather than grants, increasing debt burdens in low-income countries, and these loans are counted at their face value without considering the actual financial effort of providers or repayment obligations. Oxfam’s Climate-Specific Net Assistance (CSNA) seeks to provide a more accurate reflection of the actual financial effort made by provider countries in support of climate-specific action in developing countries. This approach accounts for both the climate relevance of reported finance and the grant-equivalent value of the instruments used, and indicates that the actual financial effort by developed countries to support climate action in developing countries is vastly lower than the officially reported figures seem to suggest.
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