The UK has announced it met its pledge to provide £11.6bn in climate finance to developing countries between 2021 and 2026, exceeding the target with £12.8bn delivered overall. However, an analysis by Carbon Brief based on freedom of information requests reveals that approximately £2.1bn of the funds counted toward this goal came from reclassified existing spending rather than new resources. The accounting changes involved relabeling funding for development banks, private-sector investments, and aid to countries including Afghanistan and Sudan as climate finance.
Without these reclassifications, the UK would have fallen approximately £924m short of its target. The government implemented looser definitions of what qualifies as climate spending in 2023 to maintain its commitment despite cuts to the overall foreign aid budget. Both the Conservative government that introduced the changes and the current Labour administration have continued this approach while announcing plans for further aid reductions.
The reclassification strategy has drawn criticism from MPs, campaign groups, and the UK’s Independent Commission for Aid Impact, who characterize the accounting as creative and argue it undermines the principle of “new and additional” climate finance. The World Bank and African Development Bank account for most of the reclassified funds, with approximately £1.1bn coming from recharacterizing contributions to multilateral development banks.
The UK government has maintained that its accounting methods are consistent with internationally recognized standards used by other major donor nations. Nevertheless, a recent International Development Committee report concluded that the combination of aid cuts and accounting changes has eroded the credibility of UK climate finance commitments. As the UK enters its next climate-finance phase with a pledge of £6bn over three years—roughly half the previous annual rate—analysis suggests questionable accounting may constitute approximately one-third of the new target amount.
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