New figures show the world’s poorest miss out on climate cash, despite being hardest hit

5 min read
A woman and young girl carry water on their heads through a dusty desert
Image: WaterAid

Just 1% of the billions pledged globally to fight climate change goes to protecting and providing water for vulnerable communities, according to a new report, ‘Just add water: a landscape analysis of climate finance for water’, carried out by the Overseas Development Institute and commissioned by WaterAid.  

This detailed analysis of the climate finance landscape for water was commissioned to help establish where donors and national governments need to consider re-prioritising climate investment. It has been released ahead of the first global meeting of all public development banks to discuss climate change, the Finance in Common Summit, which takes place today, 12th November 2020. 

three women looking up at the camera as they fill buckets with water
Image: WaterAid/Habibul Haque

Two billion people across the world – that’s nearly a third - lack access to a safe and reliable supply of water at home. And with increasingly severe and frequent droughts, floods and extreme weather events, these vulnerable people will find it impossible to be resilient against the impacts of climate change unless we see real change, WaterAid has said. 

Jonathan Farr, Senior Policy Analyst for Climate Change at WaterAid: 

“The climate crisis is playing out before our eyes already, from devastating flooding in Pakistan to droughts in Zambia.  

“WaterAid works on the ground with the communities worst affected by climate change; for example, people living in Africa’s Sahel region, where climate uncertainty in the form of long dry seasons, frequent droughts, and poor access to water threatens lives and livelihoods every single day.” 

But the report found that programmes to provide water, decent toilets and good hygiene (known collectively as WASH services) in rural areas and at the community scale, which many vulnerable people depend on, receive little. Only 10% of the climate-related finance allocated for water programmes by international donors goes to such programmes. That’s just 0.99% of the total climate-related finance they commit, overall.  

In some countries in which access to water is already poor, that’s around $1 per person per year for the people facing the droughts, flooding and disease which climate change is already bringing about. 

Farr added: 

“This report shows us that the world is not responding to the climate crisis by prioritising the most vulnerable. Instead, the poorest communities, those on the front lines of climate change who are already feeling the impacts, are being left to pick up the bill themselves. 
“We must meet this injustice with urgent and significant action on a global scale, and provide everyone, everywhere with the tools they need to combat the growing threat of climate change.” 

Around 8.7% of the $73 billion USD that donors committed globally to fight climate change in 2018 was allocated to projects which focused on adapting to withstand the impacts of climate change on water, despite climate impacts mainly felt through storms, floods and droughts.  

young girl smiling and drinking water from a mug
Image: WaterAid/Ernest Randriarimalala

Even the funds which are being allocated to helping countries adapt to the impact of climate change are not getting to those who need it most. Of the 20 countries receiving the most climate funding for water programmes, 19 are middle income, despite it being the world’s poorest countries that are most vulnerable to climate change.  

The report also reveals that 86% of the finance offered for climate adaptation within the water sector takes the form of loans rather than grants. This means that governments from already heavily indebted nations are faced with a choice between leaving their communities vulnerable to the impacts of climate change or getting into even deeper national debt. 

Nathaniel Mason, Research Associate specialising in water, sanitation and climate change at ODI: 

“Reliable access to safe water, sanitation and hygiene are crucial for peoples’ resilience to climate change, just as it has been vital for people coping with COVID-19. 

This research should be a wake-up call to refocus on helping the people and countries that are most vulnerable to climate change and related threats, to listen to their priorities better, and to think more creatively about how we finance climate change adaptation.” 

WaterAid is calling for the world’s most vulnerable people to be moved up to the front of the queue when it comes to international financial support. The international charity is due to hold high-level discussions with representatives of governments and aid agencies along with climate and water experts later this week to set out a programme of changes required to support climate resilience for the world’s poorest communities. 

This follows a pledge at WaterAid’s Water and Climate Summit, hosted by His Royal Highness the Prince of Wales in March 2020, to work towards boosting finance for climate-resilient water, sanitation and hygiene services. 

Just add water: a landscape analysis of climate finance for water The full report will be available at:  

A young woman carries water on her head next to a dirty water source
Image: WaterAid/Sibtain hAIDER

WaterAid commissioned ODI in July 2020 to look at how much money was going to adaptation and resilience globally; how much of that was going to water and WASH programmes; where that money was coming from; and where it was going to.  

Key findings:  

  • In 2018 the water sector receives $6.4billion of $32 billion of public, international climate finance for adaptation – 20%  despite seeing many of the impacts of climate change. However, only around $724million of that finance went to basic WASH – 0.99% of total climate spend and barely 11% of total water spend. 

  • Countries who identify water as a climate-vulnerable sector or priority for adaptation receive US$1 of this finance per person per year. WaterAid’s own report released in March this year that also looked climate finance flows to WASH, found that half of countries where more than 1 in 10 people do not have water close to home get less than 77p per person per year in climate finance for water, sanitation and hygiene (WASH) service adaptation. 

  • Around 5% of the $546 billion USD pledged globally to fight climate change in 2018 was allocated to projects which focused on adapting to withstand the impacts of climate change 

  • Almost all the top 20 recipients of climate-related development finance for water are middle-income countries. Only one, Bangladesh, is a least developed country (LDC). 

  • For water-focused flows where income group was recorded (87% of the total) Least Developed Countries received 18%. 

  • The significant majority of public, international climate finance to water has been provided as repayable loans: 86%, around half of which were non-concessional/market rate. 

  • There is also a need to ensure wider flows of finance to water support the transition to a low-carbon and climate-resilient future. Little is known about how public subsidies for water and sanitation – around $320 billion per year even without India and China – contribute to, or undermine, climate change adaptation. The same applies to further billions in private finance for water-related investments. Better mapping these flows would be a first step to harnessing them in support of vulnerable people and communities. 

The research compiled and analysed estimates of climate finance from publicly available sources including the United Nations Framework Convention on Climate Change, the Organisation for Economic Co-operation and Development, Climate Policy Initiative, Climate Funds Update, The Climate Bonds Initiative, the International Development Finance Club and the Joint MDB Climate Finance Group. It compared these with additional variables sourced from World Bank Open Data and The German Development Institute’s NDC Explorer. 

ODI is Europe’s largest think tank specialising in sustainable development and global affairs. We harness the power of evidence and ideas through research and partnership to confront challenges, develop solutions and create change.