New analysis from climate think tank E3G finds that Beijing has yet to meet its own pledge on climate finance to the developing world, and Chinese investment in climate-related projects in Global South remain limited compared to the overall scale of China’s overseas finance.
As China grows richer, it will be increasingly difficult to remain in the same group of developing countries, shielded from international climate finance responsibilities, including on international climate finance contributions.
China has the potential to play a much bigger role in financing global climate action. A credible offer by Beijing could reinvigorate climate finance negotiations at COP28 and allow China to renew its climate commitment to the Global South.
E3G’s analysis finds that China has only delivered 10% of $3.1 billion pledged for a South-South Climate Cooperation Fund since its launch in 2015. Beyond that Fund, Chinese government ministries and state-owned financial institutions also support the developing world in addressing climate change. However, E3G’s analysis finds that Chinese financing on climate-related projects represents less than 2% of the hundreds of billions of dollars spent through the Belt and Road Initiative and other official programmes.
China’s position as the largest economy in the developing world and an influential geopolitical actor made it the de facto leader of the developing country bloc in international climate negotiations As China grows richer, there are growing expectations for Beijing to support developing countries financially to address climate change. E3G’s analysis shows that China has built the diplomatic and institutional frameworks to provide climate-related finance to the developing world, but has not yet lived up to its potential.
Developed countries have long failed to deliver on their climate finance pledges and through that shielded China from taking more responsibility on international climate finance. At COP28, both developed nations and China have to opportunity to step up in the race to the top on climate leadership by offering new climate finance to countries in the Global South on mitigation, adaptation, and, crucially, loss and damage.
Belinda Schäpe, Policy Advisor at E3G said:
“Despite falling short on its pledge, every bit of climate finance from Beijing will buy diplomatic capital in developing countries who have been betrayed by Western donors’ false promises on climate finance.”
Byford Tsang, Senior Policy Advisor at E3G said:
“An offer by Beijing on climate finance will be a ‘win-win’ for Beijing – it would earn China diplomatic clout, and pressure Western donors to raise their stakes on climate finance.”
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Available for comment
Byford Tsang (EN, CN), Senior Policy Advisor (China), Climate Diplomacy, E3G. +44 7931 317 327, firstname.lastname@example.org.
Belinda Schäpe (EN, DE), Policy Advisor (China), Climate Diplomacy, E3G. +44 (0)7864 802176, email@example.com.
Notes to Editors
- E3G’s analysis shows that China could play a much bigger role in financing efforts to tackle global climate change. Chinese investment in climate-related projects in developing countries is significant. However, it remains limited and falls short of the amount pledged by Beijing. COP28 provides an opportunity for China to renew its climate commitment to the Global South. Download the briefing here.
- E3G is an independent climate change think tank with a global outlook. We work on the frontier of the climate landscape, tackling the barriers and advancing the solutions to a safe climate. Our goal is to translate climate politics, economics and policies into action. About – E3G
- For further enquiries email firstname.lastname@example.org or phone +44 (0)7783 787 863