The Feminist Action Nexus for Economic and Climate Justice coordinates collective advocacy and knowledge-sharing to promote the necessary transformation away from the fossil-fuel capitalism, neoliberalism, patriarchy and white supremacy that drive both the climate crisis and rampant inequality. The initiative aims to urgently and radically transform our approach to economic growth, our systems of production and consumption, and the rules that govern our macroeconomic and multilateral systems.

The conceptual framing for the Action Nexus is grounded in three key resources published in 2021:

• A Blueprint for Feminist Economic Justice, authored by Diyana Yahaya [English, French, Spanish, Arabic forthcoming]
• A Brief on a Feminist Decolonial Global Green New Deal, authored by Bhumika Muchhala [English, French, Spanish, Arabic forthcoming]
• A Brief on Human Rights & the Private Sector, authored by Sanam Amin [English, French, Spanish, Arabic forthcoming]

This report was written by Shared Planet, led by Arimbi Wahono with contributions by Joanna Grylli.

The drafting process benefitted from review and inputs by a broad range of feminist intellectuals, reflecting the collective spirit of both the project and the analysis from which it draws. These include: Âurea Mouzinho, Bhumika Muchhala, Carola Mejía, Diyana Yahaya, Emilia Reyes, Friederike Strub, Imali Ngusale, Polina Girshova, and Sanam Amin.

The report was coordinated by Katie Tobin of the Women’s Environment and Development Organization (WEDO), with inputs from Tara Daniel, Lindsay Bigda, and Bridget Burns.

The full report is available in four languages: Arabic, French, English and Spanish.

Design by Brevity and Wit. Web platform by Social Ink.

To achieve a feminist vision for economic and climate justice, there is a clear need to shift away from our unsustainable models of consumption and resource extraction. Yet, the world’s wealthiest countries and highest income-earners continue to bring in vast profits from fossil fuels, while neglecting to provide development finance according to their obligations and without which Global South countries will find it difficult to achieve sustainable development and climate justice. At current trends of income inequality, women will only achieve gender parity in labor income by 2100.

The proportion of low-income countries at high risk of or in debt distress has skyrocketed; countries are spending ever greater proportions of government revenue on external debt service—far more than on education and health, even at the height of the pandemic. The international response is largely centered around the G20 Common Framework for Debt Treatments established in November 2020, but civil society activists and Southern governments have condemned the Common Framework for its failure to advance debt cancellation, its limited scope, and for forcing countries to take on IMF programs to access debt treatment.

Tax abuse remains rampant, with hundreds of billions lost per year due to tax evasion by corporations and wealthy individuals. For low-income countries, this loss amounts to nearly half of their public health budgets. Countries remain pressured to keep corporate tax rates low, continuing a decades-long trend, while making up the revenue loss through higher consumption taxes which unduly burden low-earners over the wealthy—often at the direction of institutions like the IMF. The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting coming into effect in 2024 fails to address the scope of this challenge. However, there are hopes for a breakthrough in establishing a more democratic UN Framework Convention on Tax following a recent proposal published by the UN Secretary General and a UN General Assembly resolution put forward by the African Group and adopted in November 2023.

The International Monetary Fund (IMF) and World Bank have recently developed agendas for gender, climate, and internal reform, yet consistently fail to recognize how their democratic deficits and imposition of strict austerity measures directly harm both people and planet. Even at the height of the pandemic, the IMF made the majority of their loans contingent on the uptake of austerity measures that would only exacerbate the worst impacts of the pandemic on the most marginalized. Transforming the role of the BWIs is a fundamental precondition to a more feminist global economic governance structure, and at the very least must begin with quota reform to shift power away from the richest countries currently dominating the IMF.

Despite the links between gender and trade being increasing mainstreamed by the World Trade Organization (WTO) and the inclusion of gender policies in free trade agreements, global patterns in and governance of trade continue to take a siloed and neoliberal approach towards human rights. There is an escalating influx of trade deals negotiated outside the WTO which expand the remit of trade governance beyond explicit trade issues to include non-trade issues. These rules constrain the abilities of Global South countries to implement regulations in a way that is necessary to achieve gender equality. Meanwhile, extractivist fossil fuel capitalism continues to be promoted by the current trade regime, both through the use of investor-state dispute settlement mechanisms by corporations to arbitrate against countries implementing environmental standards, and through a new era of export-oriented “green” extractivism of critical raw materials like lithium.

The corporate capture of global governance and development is most evident in the growing trend towards “multistakeholderism” promoted even at the UN. Multistakeholderism in principle invites a range of stakeholders to participate in global governance (at the expense of a waning voice for governments), but in practice gives multinational corporations undue influence in policy-making, standard-setting, and the distribution of public goods. This has been evident in the UN’s increasing endorsement of private-public partnerships to close the “development financing gap,” and through proposed partnerships like the (now cancelled) agreement between UN Women and BlackRock, the world’s largest investment firm.

Although climate finance has grown year-on-year, Global North countries have failed to deliver on the commitment established in 2009 at COP15 to provide and mobilize US$100 billion in climate finance per year by 2020. Climate finance is also largely disbursed through loans, exacerbating the debt crisis, which locks countries further into climate vulnerability. It insufficiently focuses on addressing loss and damage, does not reach the countries that need it most, and fails to account for the need to be gender-responsive.

While still one of the most critical sources of transfers from Global North countries to the Global South, Official Development Assistance (ODA) remains far below promised or required levels. ODA makes up over 60% of external finance in least developed countries (LDCs).^[1] Yet, since the UN target for developed countries to provide 0.7% of their gross national income (GNI) for ODA was set 60 years ago, very few countries have met the target.^[2] In 2022, members of the Organisation for Economic Co-operation and Development’s (OECD) Development Assistance Committee (DAC)—mandated to provide ODA—channeled only 0.36% of their GNI into ODA. In the same year, only five countries met or exceeded the UN target of 0.7% GNI for ODA.[3]

In 2022, ODA provided by DAC members amounted to US$204 billion, an increase of 13.6% from the previous year accounting for inflation.^[4] However, much of this increase can be attributed to increased support to refugees within donor countries and in humanitarian aid, which contributed to approximately 14.4% and 10.9% of total ODA flows, respectively. This is largely due to a surge in ODA provided to Ukraine as a response to the Russian invasion.^[5] If refugee costs and flows to Ukraine are discounted, ODA fell by 4% relative to 2021,^[6] and declined overall by 0.7% to LDCs and 7.8% to sub-Saharan Africa.^[7]

ODA spend is also insignificant relative to the amounts that rich countries spend on sectors that actively contribute to harm in the Global South. The US’s military expenditure in 2022 alone was four times that of cumulative ODA spend globally in the same year.^[8] The G20—the world’s 20 largest economies—spent US$1.4 trillion on fossil fuel subsidies in 2022, outstripping ODA spend by nearly sevenfold.^[9]  At the same time, rich countries were allocated US$437 billion in Special Drawing Rights (SDRs) from the International Monetary Fund (IMF) through the IMF’s most recent allocation in 2021, boosting their liquidity by far more than they provided in ODA.^[10]

[1] OECD, External finance to least-developed countries (LDCs): A snapshot, 2022.

[2] OECD on Development, Official Development Assistance April 2023 Preliminary figures, 2023.

[3] This included Luxembourg (1%), Sweden (0.9%), Norway (0.86%), Germany (0.83%), and Denmark (0.7%).

[4] OECD on Development, Official Development Assistance April 2023 Preliminary figures, 2023.

[5] Ibid.

[6] Relief Web, On the Preliminary 2022 ODA Figures: What is the real deal on REAL aid?, 2023.

[7] OECD on Development, Official Development Assistance April 2023 Preliminary figures, 2023.

[8] Stockholm International Peace Research Institute (SIPRI), SIPRI Military Expenditure Database, n.d.

[9] Energy Policy Tracker, Fanning the Flames: G20 provides record financial support for fossil fuels, 2023.

[10] Eurodad, The 3 trillion dollar question: What difference will the IMF’s new SDRs allocation make to the world’s poorest?, 2021.

In recent years, alternatives to the model of endless economic growth have garnered increasing attention, with the concept of degrowth as one of the narratives gaining momentum.^[1] Degrowth challenges the conventional pursuit of economic growth, advocating for a democratically led redistributive downscaling in production and consumption in industrialized countries to focus economic objectives around human wellbeing and ecological limits.^[2] Degrowth policies include scaling down destructive sectors (such as fossil fuels,  aviation, and livestock farming), and improving public services to deliver social outcomes without high levels of resource use—acknowledging that certain sectors (such as care) will require growth to meet basic needs. The degrowth approach holds that rapid decarbonization in wealthier countries will free up resources for low- and middle-income countries that still require growth for development.^[3]

Alternative pathways for a socio-environmental future have also emerged from the Global South. The concept of buen vivir (or sumak kawsay in Indigenous Kichwa) originates from South America, with roots in the cosmologies of the Quechua peoples of the Andes. Buen vivir emphasizes living well through a harmonious relationship between human communities and the natural world. Both Ecuador and Bolivia have enshrined buen vivir and the Rights of Nature into their constitutions.^[4] While fossil fuel industries have continued to extract resources in Ecuador over the past decade, there have been significant wins: in December 2021, the Ecuadorian Constitutional Court ruled in favor of the endangered Los Cedros Protected Forest against industrial copper and gold mining, setting a legal precedent for protecting the Rights of Nature.^[5]

[1] Hickel, Less is More: How degrowth will save the world, 2020.

[2] Kothari, Demaria, & Acosta, Buen Vivir, Degrowth and Ecological Swaraj: Alternatives to sustainable development and the Green Economy, 2015.

[3]  Office of the High Commissioner for Human Rights (OHCHR), Declaration on the Right to Development, 1986; Hickel, Less is More: How degrowth will save the world, 2020. A forthcoming primer series on Degrowth for Social Justice, written by Emilia Reyes, will be published by the Action Nexus by February 2024.

[4] Kothari, Demaria, & Acosta, Buen Vivir, Degrowth and Ecological Swaraj: Alternatives to sustainable development and the Green Economy, 2015.

[5]  University of Sussex, New ‘Rights of Nature’ case will have major implications for protected forest and indigenous lands, 2022.

Countries are spending more on external debt service than ever. Between 2010 and 2018, external debt payments by developing country governments increased by 83% as a proportion of government revenue. The amount of debt service payments owed to external creditors is currently at its highest level since the late 1990s.^[1] In 2022, debt payments by LDCs and SIDS to G20 creditors amounted to US$21 billion, a 50% increase from US$14 billion in 2021. Despite the billions already paid in interest and capital repayments, in 2021 G20 countries continued to hold US$155 billion in bilateral debt from LDCs and SIDS.^[2]

With mounting obligations to pay back creditors, countries have increasingly less fiscal space to invest in public services. In two-thirds of the countries with the highest debt payments between 2010 and 2018, public spending is declining.^[3] In 2020, 36 countries spent more on external debt servicing than on education.^[4] In the same year—at the height of the pandemic—countries on average spent more on debt service payments than on healthcare—which was not universally the case in 2016.^[5]

Countries are also spending more on debt than they receive in climate finance and even total foreign aid in some countries. In 2021, 59 LDCs and small island developing states (SIDS) spent a cumulative US$33 billion on debt repayments while receiving only US$20 billion in climate finance. Both the total value of debt payments and the ratio of debt payments to climate finance were greater than in 2020. In nine countries, debt service payments in 2021 were greater than total foreign aid received.^[6]

The data is based on a sample of 20 countries from Europe & Central Asia, 23 countries from Latin America & the Caribbean, 16 countries from East Asia & the Pacific, 8 countries in South Asia, and 10 countries in the Middle East & North Africa.

[1] Eurodad, Out of service: How public services and human rights are being threatened by the growing debt crisis, 2020.

[2] International Institute for Environment and Development (IIED), Climate-vulnerable indebted countries paying billions to rich polluters, 2023.

[3] Eurodad, Out of service: How public services and human rights are being threatened by the growing debt crisis, 2020.

[4] ActionAid, The Care Contradiction: The IMF, Gender, and Austerity, 2022.

[5] Ibid.

[6] The nine countries included Angola, Myanmar, the Dominican Republic, Jamaica, the Maldives, Senegal, Belize, Lesotho, and Laos. IIED, Drowning in debt: help for climate vulnerable countries dwarfed by repayments, 2023.

In response to urgent calls for debt relief in the context of the COVID-19 pandemic, the G20 and Paris Club[1] established the Common Framework for Debt Treatments in November 2020. Contrary to calls for debt cancellation and hopes for a breakthrough in debt restructuring, the Framework is limited to debt restructuring and applies to only part of the debt held in only 73 low-income countries.^[2] So far, only four countries have requested access to the Common Framework—Chad, Ethiopia, Ghana, and Zambia—and in no case has meaningful debt relief resulted.

Two years after requesting treatment in 2020, Chad is the only country to have finalized the process. Chad’s creditors decided that Chad did not require full cancellation of its debts, due to the country’s surging revenues from high oil prices—forcing climate-vulnerable Chad to maintain reliance on oil at a time when countries should be transitioning away from carbon-intensive fuels.^[3]

(The conclusion of Zambia’s debt negotiations was announced at the 2023 IMF/World Bank Annual Meetings in Marrakech, also two years after its initial request under the Common Framework. But discrepancies between Zambia’s bondholders have effectively nullified the agreement, raising further, existential concerns about the Common Framework. This case will be explored in more detail in the forthcoming subsequent issue of the Trends Report, later in 2024.)

Meanwhile, Ethiopia’s application to the Common Framework resulted in a downgrading of its credit rating to a “CCC” from a “B”,^[4] constituting a long-term negative effect on its availability to secure future credit and a warning to other countries that might consider applying. Further, by not including middle-income countries, the Common Framework also fails to address the debt crises currently experienced by countries like Sri Lanka and Suriname.^[5]

In recent years, low- and middle-income economies have experienced a growing reliance on private creditors, especially bondholders. By 2021, private creditors accounted for 61% of the long-term public and publicly guaranteed external debt stock, amounting to US$3.6 trillion. While private creditors tend to attach fewer conditionalities that directly require austerity measures, they also tend to have less preferential rates than bilateral government creditors or multilateral institutions like the IMF, resulting in significant increases in debt service requirements.^[6]

Yet the Common Framework does not oblige private creditors to participate,^[7] which means that any debt relief countries receive may be redirected to service private debt, rather than on critical spending on climate or social services.^[8] In fact, under the Common Framework, private creditors stand to profit from delaying debt relief—and may be intentionally holding out on negotiations to maximize profits on their bond holdings. If the bonds bought by private creditors from Ethiopia, Ghana, Sri Lanka, Suriname, and Zambia were bought at current depressed prices and paid in full, creditors could profit by US$30 billion on top of the premium interest rates they have already charged to cover their risk.^[9]

Many countries have called for debt standstills in the face of climate emergencies or pandemics, with the World Bank and several bilateral creditors recently committing to include “pause clauses” in future debt contracts. Central to the Bridgetown Initiative conceived through the leadership of Barbados Prime Minister Mia Mottley, these clauses will allow Global South countries to pause debt repayments in the face of future climate disasters. But these pause clauses do nothing to address the existing mountain of debt payments at a time when 61 countries—most of which are highly climate-vulnerable—require immediate debt relief due to being at or near acute debt distress. Measures agreed so far also fail to address other emergencies such as pandemics, or a longer-term need for climate adaptation.^[10]

[1] The Paris Club constitutes a secretive and undemocratic cartel of creditors who have the primary purpose of maximizing returns on their loans. See Civil Society Statement on the Paris Club at 50: illegitimate and unsustainable, 2006.

[2] Eurodad, The debt games: Is there a way out of the maze?, 2023.

[3] Bretton Woods Project, Chad gets debt rescheduling, not relief, and is left dependent on oil revenues, 2022.

[4] Fitch Ratings, Fitch Downgrades Ethiopia to ‘CCC’, 2021.

[5] Eurodad, The debt games: Is there a way out of the maze?, 2023.

[6] World Bank Group, International Debt Report 2022, 2022.

[7] Eurodad, The debt games: Is there a way out of the maze?, 2023.

[8] World Bank Group, International Debt Report 2022, 2022.

[9] Debt Justice, The potential profit for bondholders if debts are not canceled, 2023.

[10] The Guardian, World Bank offers developing countries debt pauses if hit by climate crisis, 2023.

OECD countries are home to the multinational corporations (MNCs) that drive the greatest tax-related illicit financial flows, and constitute some of the largest tax havens. Data from 2023 reveals that higher-income countries are responsible for 99.3% of all annual tax loss across the globe due to corporate tax abuse. Around 75% of those corporate tax losses end up in OECD-country tax havens in countries like the United Kingdom, British Overseas territory Bermuda, United States territory Puerto Rico, Singapore, the Netherlands, and Luxembourg.^[1]  In 2023, Tax Justice Network reported that countries lose approximately US$480 billion a year to global tax evasion and profit-shifting by MNCs and wealthy individuals—of which US$311 billion alone, or nearly two-thirds, is lost through corporate profit-shifting to tax havens.^[2]

These staggering levels of corporate tax abuse mean that low-income countries have even less space for public service provision or investments in climate finance. Although larger economies sustain the largest losses (US$433 billion per year based on 2022 data), lower-income countries’ losses (US$47 billion per year) are far more impactful when considering the proportion of their budget spent on essential public services such as welfare, health, or education. A US$433 billion loss for high-income countries makes up about 9% of their public health budget, whereas a US$47 billion loss in tax revenue for low-income countries is equivalent to 49% of their public health budgets.^[3]

On top of the billions lost through tax-related illicit financial flows, corporate income tax rates have generally declined over the past few decades, further curbing the fiscal space of countries to invest in public services. Since the 1980s, as neoliberal policies have accelerated, global average statutory corporate tax rates have fallen by more than half, from 49% in 1985 to 24% in 2018.^[4] Most countries today have a corporate tax rate below 30%.^[5] Most recently, in 2022, ten countries decreased their corporate tax rates, reflecting a continuation of the general trend in countries cutting their corporate income tax. In the same period, only six countries increased their top corporate tax rates.^[6] This change reflects existing pressures to encourage foreign direct investment.^[7]

At the same time, countries are encouraged by the IMF to increase regressive taxes on consumption goods, disproportionately burdening low-earners. During COVID-19, out of 107 loans negotiated between governments and the IMF between March 2020 to March 2021 for economic recovery, the IMF proposed an increase in value-added tax (VAT) in 14 countries.^[8] This is a continuation of a well-established trend: between 1990 and 2017, countries overwhelmingly tended to replace progressive income and corporate taxes with regressive taxes like VAT as part of IMF loan conditionalities. Instead of locating the burden of taxation on top-earners who can afford to pay more in taxes, VAT increases further harm to women by reducing their ability to meet their basic needs. This is because VAT—as a regressive consumption tax collected by sellers across the supply chain—lowers purchasing power of all consumers, rather than being a form of targeted and direct taxation on wealthy income-earners.^[9]

[1] Tax Justice Network, State of Tax Justice 2023, 2023.

[2] Ibid.

[3] Ibid.

[4] World Inequality Lab, World Inequality Report 2022, 2021.

[5] Tax Foundation, Corporate Tax Rates Around the World, 2022, 2022.

[6] The ten countries that reduced their corporate tax rates are the Seychelles, Sierra Leone, Zambia, Bangladesh, Myanmar, Tajikistan, France, Greece, Monaco, and French Polynesia. Meanwhile, the six countries that increased their rates are Colombia, South Sudan, Netherlands, Turkey, Chile, and Montenegro, although Turkey is set to re-establish their pre-2022 corporate tax rate in 2023.

[7] Tax Foundation, Corporate Tax Rates Around the World, 2022, 2022.

[8] Oxfam, Adding Fuel to the Fire: How IMF demands for austerity will drive inequality worldwide, 2021.

[9] Ibid.

The OECD (which, as mentioned above, functions outside the global multilateral system and consists of only rich country governments) has led the charge to reform the global tax system to address tax-related illicit financial flows, particularly since 2016 with the introduction of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS).[1] Though the Inclusive Framework represented the first plausible opportunity for non-OECD countries to partake in global rule-setting on tax, it excludes over two-thirds of LDCs. Only 27 out of 54 African countries are members of the Framework—in part because many countries are refusing to partake in a proposal over which they had little say.^[2] While it was meant to come into effect in 2023, the implementation of the Inclusive Framework has been delayed to 2024.^[3]

The Inclusive Framework aims to force the world’s largest MNCs to pay a greater share of taxes in countries where they are making profits. While this is a welcome departure from the previous system, where taxation largely depended on MNCs having a physical presence, its minimal scope is a significant concern. The Framework applies only to super profits above a 10% return on revenue, and only for slightly over 100 large MNCs with a global turnover of at least €20 billion. It also does not cover taxation of MNCs for digital services, which would let companies like Amazon off the hook.^[4]

As endorsed by G20 leaders in 2021, the Framework also seeks to establish a global minimum corporate tax rate of 15%.^[5] However, enforcement is a matter of national discretion, and applies only to MNCs with a global turnover exceeding €750 million.^[6] This leaves out around 80 to 90% of corporations around the world.^[7] Further, most progressive analysis agrees that the 15% minimum is too low, with UN and independent panels calling for global corporate tax rates between 20 and 30%.[8] A minimum corporate tax rate of 25% would drive almost US$17 billion more in tax revenue for the world’s 38 poorest countries.^[9]

Besides OECD-led reforms, a key development in the push for combating global tax abuse is the UNCTAD release of measurement tools and methodological guidelines on illicit financial flows. In 2020, UNCTAD and the UN Office on Drugs and Crime (UNODC) published a Conceptual Framework for the Statistical Measurement of Illicit Financial Flows, which constitutes the first attempt to conceptualize illicit financial flows and measure them from selected legal markets as an attempt to generate better statistics to reflect a clearer reality of these flows.^[10]

[1] BEPS refers to strategies used by corporate entities to exploit mismatches in tax rules to shift their profits to low or no-tax jurisdictions.

[2] IMF, International Corporate Tax Reform, 2023.

[3] Ibid.

[4] Eurodad & LSE, Is the OECD 2021 corporate tax deal fair?, n.d.

[5] The Guardian, G20 Leaders to Endorse Biden Proposal For Global Minimum Corporate Tax Rate, 2021.

[6] IMF, International Corporate Tax Reform, 2023.

[7] Eurodad & LSE, Is the OECD 2021 corporate tax deal fair?, n.d.

[8] In 2021, the UN Financial Accountability, Transparency and Integrity (FACTI) Panel recommended a 20 to 30% global corporate tax. Meanwhile, the Independent Commission for the Reform of International Corporate Taxation (ICRICT) called for a minimum 25% global corporate tax rate.

[9] Oxfam, OECD deal on track to become rich country stitch-up: Oxfam, 2021.

[10] UNCTAD, Conceptual Framework for the Statistical Measurement of Illicit Financial Flows, 2020.

The IMF has long been criticized by civil society activists and Global South countries for its one-dollar-one-vote, quota-based decision-making structure. Around 36 advanced and high-income economies have the strongest voting share in the IMF and hold approximately 59% of IMF votes.^[1] GDP comprises half of the determinant for a country’s vote share in the IMF—meaning richer countries have greater decision-making power—but 30% of quota allocations are determined by a country’s “openness”: its volume of current account payments and transfers. This is based on the IMF’s subjective interpretation that integration through international trade and finance is beneficial for countries, despite evidence that liberalization leaves many countries in the Global South vulnerable to global market fluctuations and financial crises.

Quota allocations also determine the amount of Special Drawing Rights (SDRs) distributed to IMF member states, meaning wealthy countries receive a majority of the allocation. Of the US$650 billion in new SDRs proposed in 2021, only US$7 billion has gone to low-income countries, with the vast majority being added to the coffers of rich Global North countries unable to transfer them to other countries due to the stipulations of national legislation.^[2]  

Any proposed reforms of the IMF and their role in global economic governance will be impossible without meaningful quota reform. The U.S. has an automatic veto power on quota increases and the distribution of voting shares because such decisions require an 85% majority, and the U.S. itself has an over 15% voting share. The IMF periodically reviews its quotas, with the most recent review concluding in December 2023 without changing the formula or making even small adjustments. Only two increases in quota shares have been implemented in the past 30 years, demonstrating the rigidity of the existing system.^[3]

The World Bank is also governed by undemocratic decision-making processes, as evidenced by the assignment of former Mastercard CEO Ajay Banga as the new World Bank president at the beginning of 2023. Banga’s nomination resulted from the BWIs’ colonial leadership selection process, determined by a “gentleman’s agreement” where the World Bank president is always a U.S. national and the IMF managing director is always a European.^[4] Banga, whose orientation towards private capital and lack of development experience should have disqualified him, was supported by other Global North countries even before the nomination period technically began.^[5]

[1] Bretton Woods Project, IMF and World Bank decision-making and governance, 2020.

[2] Eurodad, The 3 trillion dollar question: What difference will the IMF’s new SDRs allocation make to the world’s poorest?, 2021.

[3] Devex, Opinion: IMF rules continue to be rigged against the world’s poorest, 2023. and Boston University Global Development Policy Center, No Voice for the Vulnerable: Climate change and the need for quota reform at the IMF, 2022.

[4] Center for Global Development, Time, Gentlemen, Please, 2019.

[5] Bretton Woods Project, Democratic Deficit in the World Bank Presidential Appointment, 2023.

Since the introduction of structural adjustment programs in the 1980s, the IMF has frequently attached policy conditionalities in their lending to developing countries, stipulating reductions in public expenditure that have increased poverty and income inequality. Due to their dominant role in IMF decision-making, advanced economies determine the conditions attached to IMF lending—without ever having to take on IMF policy advice or endure the effects of these conditions themselves.^[1]

Despite its alleged mandate to assist countries in recovering from the pandemic, the IMF continues to push austerity alongside its COVID-19 programming. Out of 107 loans worth US$107 billion negotiated between governments and the IMF for post-COVID-19 economic recovery from March 2020 to March 2021, 90 loans required austerity measures as a condition for financing. In these loans, the IMF proposed public expenditure cuts for 55 countries, wage bill cuts and freezes for 31 countries, and an increase in value-added tax in 14 countries.^[2] This has eroded the welfare state and the role of public finance, curbing access to social services for women and others facing discrimination.^[3]

Further, the IMF’s response to COVID-19 has only continued to exacerbate sovereign debt at the cost of social service provision.^[4] By 2023, the governments of 59 low- and middle-income countries will be spending less on social services than they did in the 2010s.^[5] Where there are provisions for social spending, IMF loans tend to favor targeted programs rather than universal social protection.^[6] Targeted programs have a narrow scope for protection and use selection processes that are costly, inaccurate, and ultimately exclude many people from applying, as well as increasing the stigma around social protection due to the need to apply.^[7]

In response to criticisms of IMF-imposed austerity, since 2019, the IMF has been implementing “social spending floors” as part of their loan conditionalities. These floors represent a minimum level of public spending on social services such as education, health, and social protection. Countries must agree to maintain floors, even under the fiscal consolidation measures often required by IMF-supported programs. However, social spending floors typically take a backseat to austerity conditionalities in implementation. An Oxfam analysis of IMF social spending floors in loan programs to low- and middle-income countries in 2020 to 2021 found that for every US$1 the IMF encouraged countries to spend on public goods, it has demanded that they cut four times more through austerity measures.^[8]

[1] Boston University Global Development Policy Center, No Voice for the Vulnerable: Climate change and the need for quota reform at the IMF, 2022.

[2] Oxfam, Adding Fuel to the Fire: how IMF demands for austerity will drive inequality worldwide, 2021.

[3] Ibid.

[4] Eurodad, Out of service: How public services and human rights are being threatened by the growing debt crisis, 2020.

[5] Oxfam, IMF Social Spending Floors: A fig leaf for austerity?, 2023.

[6] Recommendations for targeted social spending were observed in Sierra Leone, El Salvador, Costa Rica, Nicaragua, Peru, Chad, Georgia, Mauritania, Mongolia, Madagascar, Egypt, and Colombia.

[7] Oxfam, Adding Fuel to the Fire: how IMF demands for austerity will drive inequality worldwide, 2021.

[8] Oxfam, IMF Social Spending Floors: A fig leaf for austerity?, 2023.

The World Bank’s new 2023-2030 Gender Strategy attempts to provide a new focus on care and social protection in the Bank’s approach to poverty reduction and inclusive growth.^[1] It has drawn much criticism,^[2] primarily because the Strategy fails to consider the gendered impact of the World Bank’s own role in development policy financing, including its recommendations for fiscal consolidation and regressive tax-focused loans. It also tends to reduce women to “untapped sources of income.”^[3]

Similarly, the IMF Gender Strategy released in 2022 fails to address the harmful impacts of IMF macroeconomic policy and the root causes of gender inequality, opting instead for a business-friendly approach to women’s “empowerment.” In an open letter to the IMF sent in 2022, a group of 178 feminist organizations and 124 individuals rejected the IMF Gender Strategy and called out the IMF’s harmful history of fiscal consolidation and structural adjustment, elaborating on how this history has been antithetical to achieving gender equality.^[4]

The Evolution Roadmap is the World Bank’s most recent iteration of their long-term vision and strategy—although instead of addressing much-needed governance reforms, it appears to only reaffirm business-as-usual. The Roadmap has drawn much criticism for its emphasis on return-seeking capital and reliance on South-to-North extractive processes, while omitting any recognition of the democratic deficit in global economic governance. It also reaffirms the Bank’s Cascade approach, which is premised on incentivizing and mobilizing private sector and commercial finance into development.^[5]

As part of its new sensitivity to climate change, the IMF established the Resilience and Sustainability Trust (RST) in 2022, a new source of loans funded by unused SDRs targeted towards SIDS and climate vulnerable countries. As of April 2023, the RST held about US$40 billion in SDRs—still a mere fraction of the SDRs held by high-income countries.^[6] As a loan-based trust, the RST will add to the debt burdens of countries borrowing from it. In addition, countries’ access to RST loans is contingent upon having another “traditional” IMF loan program, with the typical set of attached conditionalities and austerity impacts. Without adequate debt cancellation, there is a high likelihood that loans from the RST will only be used to service existing debts.^[7]

More broadly, the BWIs’ increasing push to position themselves as key actors in climate finance further undermines the need for a democratic just transition. The World Bank has invested US$15 billion to support fossil fuel projects and policies since the Paris Agreement.^[8] In 2022 alone, it is estimated that US$3.7 billion in trade finance from the World Bank went to oil and gas.^[9] A shift in decision-making power for climate finance from the more democratic space of the UN Framework Convention on Climate Change (UNFCCC) to the undemocratic IMF and World Bank would be a regressive move, increasing the prospects of loan-based finance and lack of alignment with the Paris Agreement.^[10]

[1] World Bank, World Bank Gender Strategy 2024-2030, 2023.

[2] Bretton Woods Project, World Bank’s new gender strategy: Concerns about approach to social protection and gender-blind macroeconomic reforms remain, 2022; Bretton Woods Project, Spring Meetings 2023 Wrap Up: Bretton Woods Institutions fail to deliver a transformative ‘evolution, 2023.

[3] Bretton Woods Project, Spring Meetings 2023 Wrap Up: Bretton Woods Institutions fail to deliver a transformative ‘evolution’, 2023

[4] Civil society joint statement, Feminists Reject International Monetary Fund’s Strategy Toward Mainstreaming Gender #NotInOurName, 2022.

[5] Civil society joint statement, Civil Society calls for rethink of World Bank’s Evolution Roadmap as part of wider reforms to highly unequal global financial architecture, 2023.

[6] Reuters, IMF’s Georgieva says 44 countries interested in new resilience trust loans, 2023.

[7] Debt Justice and CAN International, The debt and climate crises: Why climate justice must include debt justice, 2022.

[8] ActionAid, The Vicious Cycle: Connections between the debt crisis and climate crisis, 2023.

[9] Urgewald, Is the World Bank giving billions of trade finance to fossil fuels?, 2023.

[10] ActionAid, The Vicious Cycle: Connections between the debt crisis and climate crisis, 2023.

In recent years, links between gender and trade have been increasingly mainstreamed through both rhetoric and the inclusion of gender policies and chapters in multilateral, regional, and free trade agreements. In 2017, the World Trade Organization (WTO) initiated a Joint Declaration on Trade and Women’s Economic Empowerment, which failed to recognize the WTO’s own role in deepening inequalities, such as through its continued policies around liberalization, privatization and deregulations.^[1] Instead, it was used to introduce new issues on the WTO’s agenda, centering on how women can be integrated into global value chains for economic “empowerment.”^[2]

The governance of trade more broadly mirrors the WTO’s failure to recognize how trade liberalization has often facilitated harm in the Global South. The multilateral trade rules of the WTO are being increasingly crowded by the influx of trade deals signed and negotiated outside of the WTO. These include the recently concluded EU-Mercosur Free Trade Agreement and African Continental Free Trade Area (AfCFTA), the now in force Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the newly launched Indo-Pacific Economic Framework for Prosperity (IPEF).^[3] Most of these agreements go beyond the WTO’s trade rules and will likely add to more harm to the existing ones by significantly curbing the space for developing countries to enact policy changes in the areas governed by these agreements.

The AfCFTA illustrates the harms of new generation trade deals. The AfCFTA came into force in January 2021, stipulating that its members (which include most countries in the African continent) agree to eliminate tariffs on most goods and services within 5 to 13 years to promote African economic integration. This rapid and aggressive liberalization will drive significant losses in public revenue that could prompt further curtailment of the provision of public services and may drive regressive tax hikes on essential consumption goods.^[4]

One of the most significant characteristics of these new trade agreements is that they go beyond “old” trade issues like tariffs, goods, services, investment, and Intellectual Property Rights (IPRs), including new issues and areas that are only remotely related to trade. The new issues range from the digital economy, government procurement, subsidies toward small fisherfolk, and food security related initiatives.^[5] The rules governing these new issues in turn constrain developing countries’ abilities to enact policies for development, the regulation of MNCs, and the management of crises. This is particularly the case when trade commitments pressure developing countries to eliminate subsidies and tariffs which are instrumental to their development—even though developed countries have historically and presently been allowed to protect their economies through their control over technology and standard and non-tariff barriers.[6]

Challenges to the current IPR regime gained momentum in response to the COVID-19 pandemic, as a key demand of Global South countries and activists, including feminist collectives. [7] In June 2022, the WTO finally approved a waiver of intellectual property protections for COVID-19 vaccine patents, previously established under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).^[8] The original TRIPS waiver proposal was submitted to the WTO by India and South Africa in 2020, and blocked by the United States and European Union. The eventual TRIPS waiver was a watered-down version of the original proposal—a classic case of “too little, too late.” Yet, prior to the pandemic, many Global South countries and feminist civil society advocates believed challenges to the IP regime would not be taken seriously, making the TRIPS waiver a necessary—but not sufficient—step towards questioning the current regime.^[9]

[1] Asia Pacific Forum on Women Law, and Development, Statement: Women’s Rights Groups Call on Governments to Reject WTO Declaration on Women’s Economic Empowerment, 2017.

[2] ActionAid, From Rhetoric to Rights: Towards Gender-Just Trade, 2018.

[3] FEMNET, The African Continental Free Trade Area (AfCFTA) and Women: A Pan African Feminist Analysis, 2021; House of Commons Library, The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), 2023.

[4] FEMNET, The African Continental Free Trade Area (AfCFTA) and Women: A Pan African Feminist Analysis, 2021.

[5] Third World Network, How ‘Digital Trade’ Rules Would Impede Taxation of the Digitalised Economy in the Global South, 2020; Gender & Trade Coalition, Open Letter from the Gender and Trade Coalition to the Director-General and Honorable Delegates of the World Trade Organisation (WTO) ahead of MC12, 2022.

[6] Development Alternatives with Women for a New Era (DAWN) and Third World Network, International Trade & Investment Rules, Intellectual Property Rights and COVID-19: A perspective from the South, 2021.

[7] Feminists for a People’s Vaccine, International Trade & Investment Rules, Intellectual Property Rights and Covid-19: A Perspective From the South, 2021 and TRIPS Waiver Proposal – An Ongoing Debate, 2021; Feminist COVID-19 Collective, Another World is Possible: A Feminist Monitoring & Advocacy Toolkit for Our Feminist Future, 2020.

[8] World Trade Organization, Draft Ministerial Decision on the TRIPS Agreement, 2022.

[9] Third World Network, A global intellectual property waiver is still needed to address the inequities of COVID-19 and future pandemic preparedness, 2022.

One of the main frontiers of corporate capture in trade and investment that remains unaddressed is the continued inclusion of investor protection mechanisms in trade and investment agreements. The primary culprit here is the investor-state dispute settlement (ISDS) mechanism, which has historically given unchecked powers to MNCs to sue governments for hundreds of millions of dollars if they suspect a policy measure could hurt their profit margins or investments.^[1] In recent years, the injustice, secretiveness, and costs of ISDS cases has brought increased public awareness and opposition towards the mechanism. This has led the EU to attempts and exercises of rebranding ISDS and giving the corporate power grab a friendlier face.^[2] This rebranding only addresses some of the worst procedural problems of the ISDS regime while keeping the fundamental injustice of ISDS intact.^[3]

Though the number of known ISDS claims appears to be waning, there is a genuine prospect of the fossil fuel industry escalating litigation under ISDS to induce cross-border regulatory chills and generate payouts for stranded assets.^[4] Even though the majority of these claims do not result in payouts for claimants, they make it costly for governments to pursue policy actions that threaten MNCs.^[5] As more states pursue climate action and other domestic policies, they risk inviting more arbitration from fossil fuel companies.

Fossil fuel companies have to date made extensive use of ISDS, and will likely do so increasingly as assets like foreign-owned coal plants, gas pipelines, and even exploration permits are protected by international investment agreements (IIAs). Around 20% of known ISDS cases are linked to fossil fuel sector investments, with more than two thirds of these cases being won by investors.^[6] Of the top 10 largest investment arbitration awards to date, seven have involved fossil fuel companies (ranging from US$1.6 to US$40 billion)—so when these investors win, it is extremely costly for taxpayers and governments.^[7]

[1] Feminist Action Nexus for Economic and Climate Justice, A Feminist Agenda for People and Planet: Principles and Recommendations for a Global Feminist Economic Justice Agenda, 2021.

[2] European Commission, Multilateral Investment Court project, n.d.

[3] Public Services International (PSI), The Multilateral Investment Court: The Wolf’s Newest Outfit, n.d.

[4] Tienhaara, Regulatory Chill in a Warming World: The Threat to Climate Policy Posed by Investor-State Dispute Settlement, 2017.

[5] UN Conference on Trade and Development, Investment Dispute Settlement Navigator, 2022.

[6]  International institute for sustainable development, Investor-State Disputes in the Fossil Fuel Industry, (2021).

[7] Global Legal Group, International Comparative Legal Guides: Investor-State Arbitration 2022, 2022.

The surge in demand for clean energy and electric vehicles has led to a growing appetite for export-oriented economies in the Global South to extract and export raw minerals like lithium, cobalt, and nickel. These minerals constitute essential components of batteries and other green technologies. The World Bank anticipates that by 2050, the demand for key transition minerals could increase by around 500%.^[1]

Despite growing global awareness of the socioecological costs of extractivism, key transition minerals like lithium are increasingly positioned as environmentally benign, and countries in the Global South are encouraged to orient their exports around such minerals.^[2] In lithium-abundant resource rich countries like Argentina, Bolivia, and Chile (dubbed the “Lithium Triangle”), lithium expansion will likely drive dispossession of local populations and increase tensions due to resource conflicts—particularly as over 80% of lithium projects are located on Indigenous territories. ^[3]

[1] World Bank Group, Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition, 2020.

[2] Voskoboynik & Andreucci, Greening extractivism: Environmental discourses and resource governance in the ‘Lithium Triangle’, 2021.

[3] Institute of Development Studies, Bringing Democracy to Governance of Mining for a Just Energy Transition, 2023; Voskoboynik & Andreucci, Greening extractivism: Environmental discourses and resource governance in the ‘Lithium Triangle’, 2021.

Though UN partnerships with private actors are not new, they are increasingly promoted at the highest levels. This is clearly illustrated within the Our Common Agenda report published by UN Secretary General António Guterres in 2021, aimed at accelerating the 2030 Agenda and Sustainable Development Goals (SDGs) by increasing multistakeholder engagement in multilateral processes.^[1]  Our Common Agenda promotes new multistakeholder approaches under the banner of “inclusive, networked and effective multilateralism.” In theory, this refers to the broadening of intergovernmental processes to include business associations, private philanthropic foundations, civil society, and academia. The agenda provides no clear definition of how this will work in practice, nor an analysis of its effectiveness and the private interests that have historically been privileged in multistakeholder spaces. ^[2]

The international business community has eagerly embraced the notion of “inclusiveness” to bring private sector interests into the fold of international decision-making. This influence has been evident in private corporations’ ability to weaken potential regulatory processes. For instance, the private sector has pushed for the milder UN Guiding Principles on Business and Human Rights to take precedent over the tougher proposed Binding Treaty on Transnational Corporations with Respect to Human Rights.[3]

The proposed partnership between BlackRock and UN Women was a particularly egregious demonstration of the increasing role of private finance in UN spaces. In May 2022 at the World Economic Forum in Davos, UN Women announced a partnership with BlackRock—the world’s largest investment firm—to promote the growth of gender lens investing. ^[4] BlackRock is one of the world’s biggest investors in the dirtiest fossil fuel companies and is the leading known holder of external private debt in the Global South, for which it is known to refuse requests for debt restructuring to generate larger payouts. The partnership was quickly canceled after pressure from feminist civil society. ^[5] Yet, it is disconcerting that UN Women has not shared its motivations for engaging in such a partnership, given that secretive Memorandums of Understanding (MoUs) are a hallmark of the world of commerce where the objective is to protect competitive advantage—a mandate completely opposite to the values and purpose of the UN.

Such partnerships are also part of a recent and broader trend on the corporate capture of development through impact investing—a false solution for financing the SDGs being increasingly endorsed at the UN level. In 2021, UN Women partnered with the International Capital Market Association (ICMA) and International Finance Corporation (IFC), the World Bank’s private finance arm, to publish Bonds to Bridge the Gender Gap: A Practitioner’s Guide to Using Sustainable Debt for Gender Equality.^[6] This endorsement is particularly concerning given that much of the money channeled through gender impact investing comes from public money subsidizing private investments, meaning private actors profit from fees while taking on little risk, all while drawing from public funds that should be going towards public goods and services.^[7]

The increasing corporate presence in the UNFCCC, especially at COP27 and COP28, is also evidence of the encroachment of multistakeholderism and corporate capture in climate policy. At least 2456 fossil fuel lobbyists attended the COP28 climate conference in the United Arab Emirates (UAE)–a nearly fourfold increase in attendance from COP27, and vastly outnumbering the delegation of any country except Brazil and the UAE.^[8] The record-breaking participation of the fossil fuel industry may be unsurprising given that the COP28 presidency is itself headed by the CEO of the UAE’s largest oil producer. Although the UN has at least newly stipulated that fossil fuel lobbyists must identify themselves as such at COP28 (following backlash from their increasing participation at COP27), such a measure does little to curb the agenda-setting power of fossil fuel interests in allegedly democratic spaces.^[9]

Corporate capture also influenced the production and distribution of vaccines during the COVID-19 pandemic. A key example is COVAX, a multistakeholder initiative aimed at ensuring equitable global access to vaccines, led by the World Health Organization (WHO), GAVI the Vaccine Alliance, and the Coalition for Epidemic Preparedness Innovations. Focusing entirely on vaccine distribution, COVAX obscured the necessity for solutions tackling the root of the problem, including waiving intellectual property rights and wider technology transfers to manufacturers in the Global South. COVAX also invited criticisms over their lack of transparency in contracts with pharmaceutical companies.^[10]

[1] United Nations Secretary General, Our Common Agenda – Report of the Secretary General, 2021.

[2] Foundation for Global Governance and Sustainability, Global Governance and ‘Our Common Agenda’: A Critical Review, 2021.

[3] DAWN, Corporate Accountability and Women’s Human Rights: an Analytical Approach to Public-Private Partnerships (PPPs), 2021.

[4] Ibid.

[5] Association for Women’s Rights in Development (AWID), Feminists Demand End of UN Women’s Partnership With Blackrock, Inc., 2022.

[6] ICMA, IFC, & UN Women, Bonds to Bridge the Gender Gap: A Practitioner’s Guide to Using Sustainable Debt for Gender Equality, 2021.

[7] AWID, Gender Impact Investing & the Rise of False Solutions: An analysis for feminist movements, 2023.

[8] Kick Big Polluters Out, Release: Record number of fossil fuel lobbyists at COP28, 2023.

[9] The Guardian, So what if fossil fuel lobbyists have to declare themselves at Cop28? That won’t curb their power, 2023.

[10] Transnational Institute, The Three COVID Crises and Multistakeholderism: Impacts on the Global South, 2022.

The broader trend of corporate capture of global governance goes hand-in-hand with the widespread encouragement of public-private partnerships (PPPs) as vehicles for development. Both multistakeholderism and PPPs circumscribe the role of the state—limiting accountability to citizens and inviting corporate exploitation. Women often bear the brunt of this state neglect, because they are more likely to be in low-wage and precarious jobs, lack social protections, and face greater barriers to economic opportunities.^[1]

In the development sphere, PPPs are increasingly viewed by government and multilateral actors as a legitimate means for involving the private sector in financing infrastructure and public services. They involve long-term contracts in which private corporations are allowed to build and run major infrastructure projects conventionally provided by the state. Since the adoption of the SDGs in 2015, PPPs have been promoted by influential actors like the World Bank, UN agencies, and regional and multilateral development banks to fill the so-called development “financing gap” in the Global South. While it is difficult to find reliable data on the total volume of PPPs, overall figures seem to indicate that investments in PPPs in the Global South have been volatile, peaking in 2012 and declining dramatically with the pandemic but experiencing recovery from 2021 onwards.^[2]

Evidence clearly demonstrates that PPPs exacerbate gender and broader social inequality. They outsource and privatize public services that are disproportionately used by or critical to women, including health, education, transport, energy, water, and sanitation, therefore curbing women’s access to social services by making them more expensive, often through the implementation of user fees. Unlike governments, private providers are accountable to shareholders and not citizens, making them less transparent and less likely to provide decent work for women.^[3] Despite offering more expensive, less transparent, and less gender-responsive services, PPPs allow private actors to make significant returns with very little risk, given that they tend to be backed by sovereign guarantees from states.[4]

[1] Eurodad, GADN, and FEMNET, Can public-private partnerships deliver gender equality?, 2019.

[2] Eurodad, History RePPPeated II: Why Public-Private Partnerships are not the Solution, 2022.

[3] Eurodad, GADN, and FEMNET, Can public-private partnerships deliver gender equality?, 2019.

[4] DAWN, Corporate Accountability and Women’s Human Rights: an Analytical Approach to Public-Private Partnerships (PPPs), 2021.

Gender mainstreaming into multilateral climate funds has varied in strength and operationalization. The four primary multilateral climate funds—the Adaptation Fund, Global Environment Facility, Green Climate Fund, and Climate Investment Funds—have each developed and updated gender or gender equality policies to promote the consideration of gender in their operations and supported projects.^[1]

Among all development finance projects reported by developed countries to the OECD and tagged as climate-related, reporting on gender at the highest level is inconsistent and incomplete. Only 2.9% of climate-related development finance projects in 2020 identified gender equality as a principal objective. Nearly one in two (45.7%) did not mark whether or not gender was considered, with 80% of multilateral development bank projects and 96% of projects through other multilateral institutions, excluding the climate funds, failing to use the gender marker.^[2]

[1] ODI & Heinrich Böll Stiftung (HBS), Gender and Climate Finance, 2022.

[2] Oxfam, Climate Finance Shadow Report 2023: Assessing The Delivery Of The US$100 Billion Commitment, 2023.

Climate finance from developed to developing countries is increasing year-on-year, but not by enough. Developed countries have consistently failed to meet the 2020 goal of providing US$100 billion a year in climate finance to developing countries. The latest OECD figures show that climate finance for developing countries grew by 4% from 2019 to 2020 for a total of US$83.3 billion—falling short of the US$100 billion per year commitment. Parties have extended the US$100 billion annual goal to 2025, when the new goal will be established, although the OECD predicts that the first year the goal will be met is 2023.^[1]

Even if the US$100 billion promise were met, it represents only a fraction of what developing countries need in climate finance. In a 2021 assessment of the financial needs expressed by 153 developing countries in their national climate plans, the total amount required to finance climate agendas is over US$5.8 trillion leading up to 2030.^[2] The assessment demonstrates the necessity to re-evaluate the numerical target in line with emerging needs rather than politics—in other words, to be dramatically scaled up.^[3]  The quantity and quality parameters of the 2025-onward goal (the new collective quantified goal, or NCQG) are currently being set by UN climate negotiations through a dialogue process that feminist civil society is actively following.^[4]

Climate financing is also often not “new and additional” to existing commitments by rich countries to provide ODA, resulting in double counting by developed countries in their global financing commitments. It is estimated that up to one-third of climate-related development finance is counted as part of countries’ existing ODA commitments—despite a key agreement that climate financing should not come at the cost of achieving the SDGs.^[5]

[1] OECD, Climate Finance Provided and Mobilised by Developed Countries in 2016-2020 Insights from disaggregated analysis, 2022.

[2] This is the total amount required from the assessment year of 2021 up to 2030, not the yearly amount.

[3] Oxfam, Climate Finance Shadow Report 2023: Assessing The Delivery Of The US$100 Billion Commitment, 2023.

[4] Eurodad, Efficient, Equitable and Effective High-Quality Climate Finance: Recommendations for the post-2025 global climate finance goal, 2022.

[5] Oxfam, Climate Finance Shadow Report 2023: Assessing The Delivery Of The US$100 Billion Commitment, 2023.

Just as important as the quantity of climate finance is its composition. Much climate finance that has historically been provided to developing countries is loan-based, which is concerning given the obligation to provide climate finance and the context of an escalating debt crisis in the Global South. Loans comprised a staggering 70% of the public climate finance provided to developing countries in 2020, most of which were non-concessional (provided at market rates).^[1] The costs of paying back loans risks creating unsustainable debt burdens for countries receiving climate finance, diminishing their fiscal space and purchasing power. This, in turn, limits the abilities of developing countries to build climate resilience and invest in sustainable development.^[2]

Though grant-based finance constitutes a larger portion of climate finance for SIDS and LDCs, over half of climate finance to LDCs and over one third of finance to SIDS from 2016 to 2020 were provided as loans. The net value of climate finance for developing countries may amount to less than 50% of what developed countries have reported to the OECD, once accounting for grant equivalent values.

LDCs and SIDS are uniquely vulnerable to the impacts of climate change. They tend to lack adaptive capacity, have higher poverty levels, and are more geographically at-risk.^[3] Yet from 2016 to 2020, SIDS received only 2% of total climate finance, while LDCs received just 17%. The majority of climate finance mobilized for developing countries went to middle-income countries, allegedly due to low-income countries lacking the capacity to develop climate finance projects and access or manage international funding.^[4]

Under the Paris Agreement, developing countries should receive a “balance between adaptation and mitigation finance”—but climate finance has disproportionately flowed towards mitigation. Over half (58%) of public climate finance for developing countries went towards mitigation, especially in high-emitting countries and towards the energy and transport sectors. This is in part due to mitigation’s association with activities that will generate explicit financial returns, making it a more attractive arena for investment.^[5]

Adaptation finance is increasing, but a large gap persists. Compared to the total of US$48.6 billion (58% of public climate finance) allocated to mitigation in 2020, only 28.6% of public climate finance in the same period was for adaptation. However, between 2016 to 2020, adaptation grew more than mitigation or cross-cutting climate finance in both absolute and relative terms. Adaptation finance grew from US$10.1 billion (17%) in 2016 to US$28.6 billion (34%) in 2020.^[6]

Source: Eurodad (2021) ^[7]

[1] OECD, Climate Finance Provided and Mobilised by Developed Countries in 2016-2020: Insights from disaggregated analysis, 2022.

[2] Eurodad, Efficient, Equitable and Effective High-Quality Climate Finance: Recommendations for the post-2025 global climate finance goal, 2022.

[3] Oxfam, Climate Finance Shadow Report 2023: Assessing The Delivery Of The US$100 Billion Commitment, 2023.

[4] OECD, Climate Finance Provided and Mobilised by Developed Countries in 2016-2020: Insights from disaggregated analysis, 2022.

[5] Oxfam, Climate Finance Shadow Report 2023: Assessing The Delivery Of The US$100 Billion Commitment, 2023.

[6] OECD, Climate Finance Provided and Mobilised by Developed Countries in 2016-2020: Insights from disaggregated analysis, 2022.

[7] Eurodad, New figures on climate finance: The good, the bad, the disturbing and what’s missing, 2021.