Media Releases

New Oxfam report shows broken promises on climate finance

June 6, 2023

A new report out this week titled ‘Climate Finance Shadow Report’ from Oxfam shows New Zealand still has much more to do to support poorer countries adapt and respond to the climate crisis.

Oxfam Aotearoa’s Climate Justice Lead Nick Henry said:

“Oxfam’s report reveals that as governments around the world begin negotiations of a new global goal for climate finance, rich countries have already broken their promise to deliver US$100 billion a year to assist developing countries.

“The New Zealand Government is doing better than most on climate finance, but unfortunately the bar is very low. It is time for New Zealand to commit to increasing its climate finance and call on other rich countries to do the same. And deliver on their promises.

“The new report reveals that globally only a quarter of climate finance is given as grants, meaning most climate finance is provided in the form of loans. Although the New Zealand Government has a long way to go in order to do its fair share, one positive take away is that New Zealand has a strong commitment to give climate finance as grants, not loans. Loans only increases the burden on poorer countries as they take on expensive debt. Debt created from the failure of rich countries to deliver on their promises.

“It is also encouraging to see New Zealand increasingly integrate gender-equitable approaches to climate finance, but the Government is a long way off from making sure that the needs of people in all their diversity are met. New Zealand must stand with our whānau in the Pacific – the women, girls, and LGBTIQA+ and others who are on the frontlines of the climate crisis.

“Rich countries must find new ways to fund climate finance by taxing the wealthiest and the big polluters. In addition, Oxfam Aotearoa calls for new and additional finance to respond to loss and damage caused by climate change. This is a separate negotiation leading up to COP28, and should come with new funding.”

Notes:

Click here for the report: https://www.oxfam.org.nz/wp-content/uploads/2023/06/Climate-Finance-shadow-report.pdf

New Zealand’s current climate finance commitments end in 2025. Commitments for the next period from 2026 will need to contribute New Zealand’s fair share of the new global quantified goal on climate finance to be set at COP28 in December. Discussions on the process for setting the new global goal are underway this week in Bonn, at the intersessional meeting of parties to the UN Framework Convention on Climate Change.

Rich countries’ continued failure to honour their US$100 billon climate finance promise threatens negotiations and undermines climate action

June 6, 2023

Rich countries’ continued failure to honor their $100 billon climate finance promise threatens negotiations and undermines climate action

As global greenhouse emissions continue to rise, and climate change wreaks more havoc upon the people and places least responsible for the problem, rich polluting countries are now three years overdue on their promise to mobilize $100 billion a year in climate finance for low- and middle-income countries.

To make matters worse, says Oxfam, the actual support they provide is much less than reported numbers suggest, and is coming mostly as debt that has to be repaid.

Oxfam’s ‘Climate Finance Shadow Report 2023’ published today shows that while donors claim to have mobilized $83.3 billion in 2020, the real value of their spending was —at most— $24.5 billion. The $83.3 billion claim is an overestimate because it includes projects where the climate objective has been overstated or as loans cited at their face value.

By providing loans rather than grants, these funds are even potentially harming rather than helping local communities, as they add to the debt burdens of already heavily indebted countries —even more so in this time of rising interest rates.

Donor countries are repurposing up to one-third of official aid contributions as climate finance rather than putting forward new and additional money, while more than half of all climate finance going to the world’s poorest countries is now coming as loans.

Among bilateral providers, France has the highest share of its bilateral public climate finance through loans, at a staggering 92 percent. Other loan-heavy culprits include Austria (71 percent), Japan (90 percent), and Spain (88 percent). In 2019–20, 90 percent of all climate finance provided by multilateral development banks, like the World Bank came as loans.

“This is deeply unjust. Rich countries are treating poorer countries with contempt. In doing so, they are fatally undermining crucial climate negotiations. They’re playing a dangerous game where we will all lose out,” said Oxfam International’s Climate Change Policy Lead, Nafkote Dabi.

In the lead up to the Bonn Climate Summit (5 to 15 June), Oxfam also finds that climate-related development financing is largely gender-blind. Only 2.9 percent of all funding identified gender equality as worth prioritizing. Only one-third of climate finance projects in 2019-2020 mainstreamed gender, meaning that they took into account both women and men’s specific needs, experiences and concerns.

Oxfam estimates that the real value of funds allocated by rich countries in 2020, to support climate action in low- and middle-income countries was between $21 billion and $24.5 billion, of which only $9.5 billion to $11.5 billion was directed specifically for climate adaptation —crucial funding for projects and processes to help climate-vulnerable countries address the worsening harms of climate change.

“Don’t be fooled into thinking $11.5 billion is anywhere near enough for low- and middle-income countries to help their people cope with more and bigger floods, hurricanes, firestorms, droughts and other terrible harms brought about by climate change,” Dabi said. “People in the US spend four times more than that each year feeding their cats and dogs.”

Oxfam is highly concerned that adaptation funding is given too little attention when, in the past three years, India, Pakistan and Central and South America have all seen record heatwaves, in Pakistan later followed by flooding that affected over 33 million people, while East Africa is mired in its worst drought in over 40 years, contributing to crisis levels of hunger.

“Despite their extreme vulnerability to climate impacts, the world’s poorest countries, particularly the least developed countries and small island developing states, are simply not receiving enough support. Instead, they are being driven deeper into debt,” Dabi said.

The expectation that private investors can be mobilized by low- and middle-income countries to contribute a sizeable chunk of climate financing has not materialized, raising only $14 billion yearly, mainly for mitigation. Oxfam says it is difficult to find details on how this private finance is used or who benefits from it. According to a recent Organization for Economic Co-operation and Development (OECD) report, mobilized private adaptation financing rose sharply from $1.9 billion in 2018 to $4.4 billion in 2020, mainly because of a big liquefied natural gas energy project in Mozambique that does not reveal any adaptation activities.

Oxfam is highly concerned that funding for “loss and damage” —climate impacts that cannot or have not been mitigated or adapted to— still has no predictable place within the international climate finance architecture. Loss and damage finance needs are urgent, with estimates saying that low- and middle-income countries could face costs of up to $580 billion annually by 2030.

Oxfam says that ongoing deliberations under the UN Framework Convention on Climate Change (UNFCCC) to set a new global goal on mobilizing climate finance from 2025 onwards is a chance to rebuild trust between rich and low- and middle-income countries. But if past mistakes are not resolved and simply repeated, this initiative will have failed before it properly starts.

Climate finance providers should be massively scaling-up their efforts and be reporting climate financing on a case-by-case basis, highlighting the actual proportions channeled towards mitigation and adaptation. There is equally an urgent need for more grant-based financing for climate action, and less momentum toward loaning the money they have all promised to give.

Notes to editors

Download Oxfam’s ‘Climate Finance Shadow Report 2023’.

In East Africa alone, drought and conflict have left a record 36 million people facing extreme hunger, nearly equivalent to the population of Canada. Oxfam estimates that up to two people are likely dying from hunger every minute in Ethiopia, Kenya Somalia, and South Sudan.

The UN currently designates 46 countries as LDCs.

According to the OECD, mobilized private adaptation financing rose sharply from $1.9 billion in 2018 to $4.4 billion in 2020, mainly because of a big liquefied natural gas energy project in Mozambique that does not reveal any adaptation activities.

According to Anil Markandya and Mikel González-Eguino (2018), the costs of loss and damage in low- and middle-income countries could reach between $290 billion to $580 billion a year by 2030.

According to the American Pet Products Association, Americans spent $58.1 billion on pet food and treats in 2022.

G7 have failed the Global South in Hiroshima

May 23, 2023

If G7 expect support from Global South for Ukraine War they must cancel debts, end hunger, and pay up for climate damage.

All quotes attributed to Max Lawson, Head of Inequality Policy, Oxfam

‘The G7 had failed the Global South here in Hiroshima. They failed to cancel debts, and they failed to find what is really required to end the huge increase in hunger worldwide. They can find untold billions to fight the war but can’t even provide half of what is needed by the UN for the most critical humanitarian crises.’

Hunger and Debt

‘If the G7 really want closer ties to the developing countries and greater backing from for the war in Ukraine, then asking Global South leaders to fly across the world for a couple of hours is not going to cut it. They need to cancel debts and do what it takes to end hunger.’

‘Countries of the Global South are being crippled by a food and debt crisis of huge proportions. Hunger has increased faster than it has in decades, and all over the world. In East Africa two people are dying every minute from hunger. Countries are paying over US$200 million a day to the G7 and their bankers, money they could spend feeding their people instead.’

‘The money they say they will provide for the world’s rapidly growing humanitarian crises is not even half of what the UN is asking for, and it is not clear what if anything is new or additional- and the G7 have a terrible track record on double counting and inflating figures each year.’

‘These food and debt crises are direct knock-on effects of the Ukraine war- if the G7 want support from the Global South they need to be seen to take action on these issues- they must cancel debts and force private banks to participate in debt cancellation, and they must massively increase funding to end hunger and famine across the world.’

Climate Change

‘The G7 owes the Global South US$8.7 trillion for the devastating losses and damages their excessive carbon emissions have caused. In the G7 Hiroshima communique they said they recognised that there is a new Loss and Damage fund, but they failed to commit a single cent.’

‘It is good they continue to recognise the need to meet 1.5 degrees and stay committed to this despite the energy crisis driven by the war in Ukraine, but they try to blame everyone else- they are far off track themselves to contribute their fair share of what is needed to meet this target and they should have been on track years ago.

‘They confirm their commitment to end public funding for fossil energy, they maintain their loophole on new fossil gas, using the war as an excuse. This means they have continued to wriggle out of their commitment to not publicly fund new fossil fuels, making a mockery of their fine statements. The G7 must stop using fossil fuels immediately- the planet is on fire.’

Health

‘The G7 had hundreds of fine words on preparing for the next pandemic, yet failed to make the critical commitment- that never again would the G7 let Big Pharma profiteering and intellectual property rights lead to millions dying unnecessarily, unable to access vaccines. Given a 27% chance of a new pandemic within in a decade, this omission is chilling.’

More on Debt, Food and Hunger

‘Over half of all debt payments from the Global South are going to the G7 or to private banks based in G7 countries, notably New York and London. Over US$230 million dollars a day is flowing into the G7. Countries are bankrupt, spending far more on debt than on health or food for their people. Debt payments have increased sharply as countries in the Global South borrow in dollars so rising interest rates are supersizing the payments they must make.’

‘The G7 saying they support clauses to temporarily suspend debt payments for those countries hit by climate disasters is a positive step and a tribute to Barbados and Prime Minister Mia Mottley for fighting for this. They need to go further and cancel debts for all the nations that need it, a growing number daily. Money is flooding from the Global South into the G7 economies- that is the wrong direction.’

Notes: UN OCHA current total requirement for humanitarian crises is US$56 billion. The G7 communique says they will commit to providing over US$21 billion in total to address the worsening humanitarian crises this year (paragraph 16).

Budget 2023 a missed opportunity for climate justice that could have devastating results

May 18, 2023

Oxfam Aotearoa’s climate justice lead Nick Henry said:

“Despite the undeniable urgency of the climate crisis and the imperative to take immediate and bold action, the Government’s Budget falls far short of what is required to mitigate and adapt to the escalating impacts of the climate crisis. After the year Aotearoa has had, Oxfam is shocked to see the Government still isn’t taking the climate crisis seriously. We know New Zealanders want to see our government take stronger action to avoid the worst impacts of climate change. It is crucial our government stand with our communities in Aotearoa and the Pacific.

“This Budget includes some welcome climate change initiatives. But it’s deeply disappointing that the Government’s poor planning, and failure to act on the Climate Change Commission’s recommendations, have resulted in $800m in devastating slashes to funding available for climate action – and have taken $1.9b away from other important spending to support our communities.

“It’s staggeringly unjust that our Pacific neighbours contribute the least to the climate crisis, and yet they are facing the worst and earliest impacts. In the Pacific, loss and damage isn’t just a future worry – it’s a current reality. People are losing their homes and livelihoods, seeing their whole way of life threatened, by rising seas and extreme weather made worse by climate change.

“Pacific countries deserve the dignity of knowing that Aotearoa New Zealand isn’t just going to drop funding – they need to be able to plan. This Budget gives no reassurance beyond 2025, when previously announced climate finance funds run out. Pacific communities, and governments around the world need certainty that the New Zealand Government will stand with them.

“Oxfam Aotearoa urges the government to seize this opportunity to demonstrate global leadership by adequately funding climate mitigation, adaptation and loss and damage. We call on the New Zealand Government to commit to continuing our climate finance, and to paying our fair share to support communities in our Pacific region. It is not fair for those least responsible for climate change to bear the brunt of its impacts, and it is our collective responsibility to ensure that they receive the necessary support and resources to cope and thrive.

“Oxfam Aotearoa stands ready to work collaboratively with the government and other stakeholders to develop robust solutions, advocate for stronger climate action, and ensure that no one is left behind in our pursuit of a just and sustainable future.”

Oxfam responds in Bangladesh and Myanmar as Cyclone Mocha leaves a trail of destruction

May 16, 2023

Super cyclonic storm Mocha made a landfall in Myanmar’s Rakhine state area, reaching a speed of 250 kmph, and crossing low lying areas including Cox’s Bazar in Bangladesh on Sunday.

According to initial reports, the impact of the powerful storm killed at least 8 people abd caused extensive destruction to infrastructure in the western Myanmar region, where thousands of internally displaced persons (IDPs) have been living in camps.

Oxfam and partners are currently assessing the scale of devastation to mount a humanitarian response to provide clean water, sanitation, and hygiene facilities, as well as emergency cash and food.

“Our teams in Sittwe faced terrifying winds which damaged homes, toppled trees and disrupted power and communication lines. The cyclone has devastated the IDP camps in Rakhine. Connection with our staff resumed this afternoon and are steadily receiving new reports, adding to the scale of devastation,” said Rajan Khosla, Oxfam Country Director in Myanmar.

Even before the cyclone, an estimated 6 million people were already in need of humanitarian aid in the states where the cyclone hit (Rakhine, Chin, Magway and Sagaing). Khosla, Oxfam, said that the need for essentials like shelter, clean water, sanitation will only rise.

“The cyclone will immensely impact existing displaced people and particularly communities in Rakhine, and Chin. More resources are required, and we call on the international community to provide adequate funds required to help them live a life of dignity,” said Rajan Khosla.

“We are working with local partners for response. Our emergency response team is ready for deployment to Sittwe, will be on their way as soon as the flight resumes to operate, and will start an immediate response,” he added.

In Bangladesh, while the cyclone veered away its path, the strong winds blew away the temporary bamboo homes in Teknaf area of Cox’s Bazar.

“It is a relief that the cyclone passed away without causing loss of life in the Rohingya camps in Cox’s Bazar. But the makeshift infrastructure in the camps could not withstand the strong winds. We have already started our response. We distributed cash to communities ahead of the storm and provided clean water for families to survive the night. Oxfam’s main relief efforts will focus on our area of expertise: providing safe water for people, as well as sanitation supplies and public health support to help prevent the spread of water-borne diseases,” said Ashish Damle, Oxfam Country Director in Bangladesh.

Oxfam is working closing with local communities, partners, and authorities to ensure coordination of efforts, and the safety and well-being of those residing in the camps in Bangladesh.

Chocolate giants reap huge profits as promises to improve farmers’ incomes “ring hollow”

May 11, 2023

Ghanaian cocoa farmers’ paltry incomes fell on average by 16 percent since the start of the pandemic —while the confectionary profits of the four biggest public chocolate corporations on average jumped by the exact same rate.
Chocolate corporations’ sustainability programs are failing to deliver on promises to raise farmers’ incomes.
Oxfam is urging chocolate giants to significantly raise farm-gate prices paid to cocoa farmers.

‘Big Chocolate’ is booking huge profits while failing to pay prices that support a living income for cocoa farmers in Ghana, reveals new analysis by Oxfam today ahead of World Fair Trade Day (13 May).

The world’s four largest public chocolate corporations, Hershey, Lindt, Mondelēz, and Nestlé, have together made nearly US$15 billion in profits from their confectionary divisions alone since the onset of the pandemic, up by an average 16 percent since 2020. They paid out on average more than their total net profits (113 percent) to shareholders between 2020 and 2022.

The combined fortunes of the Mars and Ferrero families, who own the two biggest private chocolate corporations, have risen by US$39 billion since 2020. They now have a combined net worth of around US$157 billion.

An Oxfam survey of more than 400 cocoa farmers supplying chocolate corporations across Ghana found that their net incomes have fallen on average by 16 percent since 2020, with women’s incomes falling by nearly 22 percent. Nine out of ten farmers said they are worse off since the pandemic.

Up to 90 percent of Ghanaian cocoa farmers do not earn a living income, meaning they cannot afford enough food or other basics such as clothing, housing, and medical care. Many of the 800,000 farmers in the country survive on just US$2 a day.

“There’s big money in chocolate —but definitely not for farmers,” said Oxfam International interim Executive Director Amitabh Behar. “Cocoa farmers work extremely hard, under grueling conditions, yet can’t always feed their families.”

Oxfam analyzed the sustainability programs of ten of the top chocolate manufacturers and traders operating in Ghana, all of which prioritize helping farmers produce more cocoa. However, Oxfam found that none of these programs achieved their stated goal of increasing cocoa production and, consequently, boosting farmer income. In fact, the crop yields of farmers in the corporations’ supply chains declined by 25 percent between 2020 and 2022.

Similarly, Oxfam found that none of the premiums —an extra sum paid directly to farmers on top of the selling price— paid by the corporations meaningfully increased farmers’ incomes.

Cocoa farmers surveyed by Oxfam said they are being paid a premium of US$35 to US$40 per ton of cocoa. The average cocoa farmer in Ghana produces about one ton of cocoa annually. They need to earn US$2,600 more per year to get a living income.

After decades of pledges to rid their supply chains of child labor, poverty and deforestation, chocolate corporations’ failure to pay prices that ensure a living income —let alone protect farmers’ incomes from free-falling— is another setback to global efforts to make chocolate more sustainable and ethical. More and more cocoa farmers are selling their land to illegal miners or turning to polluting ‘galamsey’ (artisanal mining) to supplement or replace their incomes.

“Chocolate giants need to put their money where their mouth is,” said Behar. “They must rid themselves of their colonial legacy of extracting raw materials and keeping farmers in poverty while making astronomical profits for their rich shareholders. Without fair pricing and living incomes there will never be such a thing as ‘sustainable’ or ‘exploitation-free’ chocolate.”

Ghana produces around 15 percent of the world’s cocoa beans but receives only about 1.5 percent (US$2 billion) of the chocolate industry’s estimated annual worth of US$130 billion. Around 60 percent of the world’s cocoa heads to Europe.

“Chocolate corporations need to close the living income gap for farmers. End of story,” said Behar. “They must significantly increase farm-gate prices paid to farmers and mitigate the impact of inflation on the rising costs of farming inputs and equipment. Transparency about their prices and premiums is also a bare minimum.”

Notes to editors

Download Oxfam’s report “Towards a Living Income for Cocoa Farmers in Ghana” and methodology note outlining how Oxfam calculated the statistics.

Hershey, Lindt, Mondelēz, and Nestlé have together made nearly US$15 billion in profits from their confectionary divisions alone since the onset of the pandemic, up by an average 16 percent since 2020. Of the four corporations, only one did not significantly increase its profits compared to 2020.

Figures on the fortunes of the Mars and Ferrero families comes from Forbes’ Real-Time Billionaire List.

In April 2023, the European Parliament approved a new law that will allow the sale of cocoa and other commodities in the EU only if the supplier has issued a “due diligence” statement confirming that the product does not come from deforested land or has led to forest degradation.