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Only 1% of international funding tackles clean air, new report finds

A new report revealed that clean air projects received more global development funding than fossil fuel projects for the first time in 2021, but there is still a long way to go

A view of Noida in smog amid rising air pollution levels, in Noida, India, on 26 September 2023. (Photo by Sunil Ghosh / Hindustan Times)

By Team Lounge

LAST PUBLISHED 29.09.2023  |  06:50 PM IST

Only 1% of international development funding and 2% of climate finance addresses outdoor air pollution, a new report reveals. Although air pollution is the largest environmental threat today, funding has always been a problem in the fight for clear air. In an attempt to accelerate the progress on clean air, researchers looked into outdoor air quality funding to provide transparent and strong evidence to policymakers, funders and activists.

Air pollution not only significantly contributes to climate change, harms biodiversity, and causes health issues, but is also the reason for 7 million premature deaths every year, as reported by the Clean Air Fund. Currently, the focus has shifted to climate change-caused heatwaves that have led to significant deaths in many regions of the world, including in India.

Also read: If Delhi’s air was clean, each of its residents would live 11.9 years longer

 However, air quality has been recorded to worsen during heatwaves. Addressing this, the World Meteorological Organization (WMO) said in a new report that climate change and air pollution must be addressed together. This is reiterated in the new report by global philanthropic organisation Clean Air Fund, The State of Global Air Quality Funding 2023.

Although clean air projects received more global development funding than fossil fuel projects for the first time in 2021, the report highlights that air quality finding still remains significantly low. Although the US Environmental Protection Agency said that every $1 spent on air pollution control yields an estimated $30 in economic benefits, many international donors are still overlooking projects that address air pollution. Only 1% of international development funding ($2.5 billion per year) and 2% of international public climate finance ($1.66 billion per year) was committed to targeting air pollution over the last six years, the report states.

Japan was the top donor for outdoor air quality funding in the last five years, followed by the Asia Development Bank and Asia Infrastructure Investment Bank. The top 10 donors accounted for 97% of total outdoor air quality funding.

However, the report also recorded progress towards phasing down coal-fired power. Since 2019, there has been a decline in funding for fossil fuel-prolonging projects. But for the first time in 2021, international development funding for outdoor air quality projects ($2.3 billion) was more than the funding for fossil fuel-prolonging projects ($1.5 billion). At COP26, the UN Climate Change Conference held in 2021, 34 countries and five public finance institutions agreed to put a stop to international public finance for fossil fuels by the end of 2022. For considerable results, at the upcoming COP28 in December, governments have to agree to completely phase out fossil fuels and transition to clean energy.

The report also stated that only 2% of international public climate finance explicitly addressed outdoor air pollution. Several financial instruments are available to funders which could be used to incentivise and catalyse more funding towards air quality projects. For instance, green bonds, social bonds and results-based funding can make long-term private capital available for air quality projects.

Another issue highlighted by the report was that 92% of outdoor air quality funding was provided as loans ($12.9 billion), of which $5.3 billion was low-cost or concessional. This can be particularly burdening for low- and middle-income economies which may already be struggling with high debt since the covid-19 pandemic. Without grants, action towards cleaner energy is likely to see progress.

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One of the recommendations of the report is to increase grant and concessional finance to ensure that funding reaches all countries and regions in need. It is also said that multilateral development banks can be important for substantially increasing the availability of development finance for air quality. Finally, national policymakers and regulators should keep track of government spending on air quality to increase transparency and check progress.

Also read: World can now breathe easier, says new air pollution study