Australia - Climate
At a glance
Australia’s climate-related ODA remains low though policy attention is increasing
In 2018, Australia spent US$313 million of its bilateral allocable ODA on projects which targeted action against climate change as a principal or significant objective, making it the 12th-largest OECD Development (DAC) donor to the issue, in absolute terms.
Australia spent 13% of its allocable bilateral ODA on climate finance in 2018. This is considerably less than the average DAC average of 22% and places Australia 22nd out of 30 DAC members.
Climate finance: funding for projects tagged in the OECD’s Creditor Reporting System (CRS) database with the Rio markers for climate change mitigation and/or climate change adaptation. Projects can be tagged with either or both markers.
Each marker has three possible scores:
- Principal, for projects in which climate change mitigation or adaptation is a fundamental and explicitly stated goal;
- Significant, for projects in which climate change mitigation or adaptation is not a key driver but still an explicitly stated goal; or
- Not targeted, meaning the project does not address climate change mitigation or adaptation.
Not all projects are screened against the Rio markers; this funding falls into the ‘not screened’ category.
Australia’s ODA in this sector has remained relatively stagnant. The sum of its ODA-related climate finance in 2018 matches the 2014 figure (US$312 million) almost exactly. Australia’s funding in this sector peaked in 2016, reaching a high of US$416 million following the government’s December 2015 Paris Agreement commitment to investing A$1.0 billion (US$747 million) over five years to assist poor countries in dealing with the impacts of climate change. Despite criticism from civil society groups regarding the transparency of funding toward this goal, the FY2019/2020 budget indicates that Australia is on track to meet its pledge by the end of 2020.
In the FY2019/20 budget, the Department of Foreign Affairs and Trade (DFAT) allocated A$200 million (US$149 million) to climate finance initiatives. This does not represent additional ODA, as it was drawn from the country’s existing — and shrinking — ODA budget (see ‘ODA trends’). It is difficult to tell the exact allocations for climate in the less detailed FY2020/21 budget, however, the new ‘Climate partnerships’ budget line (climate partnerships were previously included in ‘Other Sectoral Programs’) records a 22% decrease in funding compared to FY2019/20, with allocations now amounting to A$20 million (US$15 million). Despite promising policy developments, Australia’s failure to increase climate financing in recent years, coupled with the country’s poor performance in meeting emissions reduction targets, has led many critics and civil society groups to question the government’s commitment to tackling climate change.
While climate change was not mentioned among the six priorities in Australia’s development policy between 2014 and 2020, more recent developments indicate that Australia’s attention to the issue is increasing. Australia’s newly launched development policy, ‘Partnerships for Recovery: Australia’s COVID-19 Development Response’ policy (launched May 2020), does not name climate change among the three pillars of Australia’s Department of Foreign Affairs and Trade (DFAT) development strategy for the next two years, ‘Climate change adaptation’ is listed as a component of the government’s plan to foster resilience in the Indo-Pacific. Earlier, in 2017, the Foreign Policy White Paper named climate change alongside “Islamist terrorism” as a significant force shaping the world. This highlights Australia’s framing of the issue in terms of regional security. In November 2019, DFAT released the Climate Action Strategy for 2020 to 2025. This document signals the escalating threat that climate change poses to sustainable development, particularly in countries of high priority within Australian foreign policy (namely the Indo-Pacific).
The Strategy names three key objectives:
- Support partner countries to adapt to climate change and climate-related impacts;
- Promote lower-emissions development in the Indo-Pacific; and
- Support innovative solutions to climate change, including those that engage private sector investment.
In line with these priorities, in August of 2019, the Prime Minister announced a A$140 million (US$105 million) Private Sector Mobilisation Climate Fund, which will be used to encourage private sector investments in low emissions, climate-resilient solutions for the Pacific and Southeast Asia.
Policy focus is on climate adaptation in the Pacific; only 2% of bilateral allocable ODA went to projects that address climate change as a principal goal
Australia’s climate-related ODA overwhelmingly focuses on adaptation to climate change (94%). Critics of Australia’s Prime Minister, Scott Morrison, have accused him of stressing the importance of climate change adaptation as an attempt to avoid discussing causal factors including Australia’s coal exports. Interventions aimed at climate change mitigation account for 65% of Australia’s funding in this sector. As is apparent from the relative size of these percentages, there is also a significant overlap between the two markers. This is because a project can target both adaptation and mitigation. In 2018, 59% of Australia’s funding for actions against climate change was channeled toward projects tagged with both markers. (For more information on the markers, see box.)
Australia’s financing of actions against climate change in the Indo-Pacific reinforces the policy preference for adaptation-focused interventions. Government documents place an overwhelming emphasis on climate resilience in the region, and in 2016, Australia pledged A$300 million (US$224 million) over four years for climate change and disaster resilience support in the Indo-Pacific. This was followed up with a A$500 million (US$374 million) package announced in August of 2019. Pacific Island governments criticized this offer because funds would come at the expense of education and health programs.
In 2018, 12% of Australia’s bilateral allocable ODA was spent on projects with a significant climate change component (DAC average: 15%). Only 2% of funding targeted climate change as a principal goal (DAC average: 7%). A large proportion (87%) of Australia’s bilateral allocable ODA did not target climate change or was not screened against the Rio markers in 2018 (DAC average: 78%).
Projects aimed at strengthening government and civil society received the largest share (31%) of Australia’s climate financing in 2018. Agriculture received 15%, followed by food and commodity assistance (12%).
Australia’s multilateral climate finance is low; GCF funding was stopped in 2018
Australia also contributes climate financing through multilaterals, though not all these funds are counted as ODA. This includes contributions to the following multilaterals:
- Global Environment Facility (GEF): Between 2014 and 2018, Australia contributed A$93 million (US$69 million) to the GEF, which was used toward grants for addressing global environmental issues in the Indo-Pacific region. At the seventh replenishment of the GEF in June 2018, Australia pledged to continue supporting the GEF with A$77 million (US$57 million).
- Green Climate Fund (GCF): Australia contributed A$200 million (US$149 million) to the GCF between 2015 and 2018. In October of 2018 Prime Minister Scott Morrison announced his government’s intention to stop funding the GCF. Australia made its final contribution to the GCF in December 2018.
- Global Green Growth Institute (GGGI): Australia gave US$15 million to the GGGI – an intergovernmental organization that promotes green growth – between 2017 and 2019. No further funding has been announced.
- The Multilateral Fund for the Implementation of the Montreal Protocol: Between 2018 and 2020, Australia will have contributed A$24 million (US$18 million) to this protocol which is committed to reversing the deterioration of the Earth's ozone layer. The latest budget documents do not indicate further commitments.
DFAT leads Australia’s development program, including climate-related assistance
DFAT is responsible for integrating climate change action across Australia’s development assistance program. A new Climate Change Policy Committee will be established to lead the implementation of DFAT’s 2020-2025 Climate Change Action Strategy. The committee will include Senior Executive Officers from the sectoral and development assistance management divisions. The Strategy highlights the necessity of a whole of government approach, as well as the importance of working with external experts (including non-governmental organizations) and the private sector. DFAT also engages with the Australian Government’s National Disaster and Climate Resilience Reference Group, made up of Senior Executives within the Australian government, which facilitates cross-government climate policy.
Unless otherwise indicated, all data in this section is based on commitment. For more information, see our Donor Tracker Codebook.