Climate finance is a hot mess
Nobody in their right mind would buy something without knowing what it is, especially when the price tag is “TBD.” Yet, that’s essentially what happened at COP29, where rich nations, including New Zealand, agreed to pay poorer countries US$300 billion annually by 2035 to combat climate change.
How much New Zealand will pay is still unclear. Non-profits like World Vision and Oxfam say that New Zealand must “step up and pay our fair share.” They’re calling on the government to commit NZ$558 million annually by 2025, with a total finance goal of NZ$1.9 trillion by 2035.
Given that New Zealand contributes just 0.09% of global emissions, our “fair share” of the current US$100 billion target amounts to NZ$153 million annually—yet we’ve already committed NZ$1.3 billion for 2022-2025.
Keep in mind that this isn’t a debate about climate change itself; it’s about prudent spending. Just how much are we willing to forgo in terms of schools, hospitals, and other public services to fund this? Finance is a zero-sum game—what we spend here means less for essential services. But it’s not just about how much we give; it’s also about how that money is spent.
Unfortunately, climate finance is alarmingly opaque. Oxfam reported that US$41 billion in climate finance from the World Bank over the past seven years went unaccounted for due to poor record-keeping. A 2023 Reuters report revealed that US$65 billion was so vaguely reported that it’s impossible to trace where it went—or even which continent received it.
Instead of pouring money into a global slush fund, we could focus on direct, transparent investments that tangibly improve people’s lives in developing countries.
Another issue is that funds often fail to reach local communities due to political and administrative barriers. The Adaptation Gap Report found that only 17% of adaptation finance reached the local level between 2017-2021.
Additionally, many of the top recipients of climate aid are also the most corrupt nations, with 42% of all official development assistance (ODA) flowing to countries where the risk of misappropriation is high. In such a murky system, how can we be sure that the funds will actually reach those in need?
Despite these concerns, New Zealand maintains a “high trust” approach to climate finance. It’s hardly a strategy and doesn’t qualify as localism when, as Bjorn Lomborg points out, Pacific nations like Tonga feel pressured to adopt solutions imposed by New Zealand.
Instead of pouring money into a global slush fund, we could focus on direct, transparent investments that tangibly improve people’s lives in developing countries. Let’s start by asking what they need.
One promising project is Chimneys for Africa, which offers a template for what international aid should look like. By listening to locals and designing culturally appropriate, locally deliverable solutions, they have created a simple yet life-changing ventilation system to mitigate the harmful effects of indoor cooking fires.
This approach—investing in on-the-ground projects with clearly defined objectives—ensures that funds are spent where they can do the most good.
We face a choice: continue pouring money into a leaky bucket or fund specific projects that deliver real, measurable results. As a taxpayer, it’s your money. What would you do?
Listen to the podcast
Communications Coordinator Josiah Brown explains the thinking behind his column.