THE latest OECD analysis shows that in 2022 climate finance was up by 30% from 2021. This is the biggest year-on-year increase to date and means that the 100 billion mark was reached a year earlier than the OECD had previously projected, albeit two years later than the initial target date of 2020.

Developed countries provided and mobilised USD 115.9 billion in climate finance for developing countries in 2022, exceeding the annual USD 100 billion goal for the first time.

Climate Finance Provided and Mobilised by Developed Countries in 2013-2022is the OECD’s seventh assessment of progress towards the UNFCCC goal, agreed in 2009, of mobilising USD 100 billion a year by 2020 - a commitment later extended through to 2025 - to help developing countries mitigate and adapt to climate change.

The 2022 climate finance data shows that public funds, from both bilateral and multilateral channels, continue to make up the bulk of climate finance, accounting for 80% of the total. The figures also show an uptick in climate finance destined for adaptation action. Following a small drop in 2021, adaptation finance reached USD 32.4 billion in 2022, three times the 2016 level.

This edition of the report shows that loans continue to represent the lion’s share of public climate finance, especially for multilateral development banks that typically finance large infrastructure projects, although grants are being prioritised in lower-income countries.

Climate finance to low-income countries remained relatively low at 10% in 2022. Importantly, however, least developed countries (LDCs) and small island developing states (SIDS), benefitted from a larger amount of finance for adaptation (about 50%) than the average for all developing countries (25%). On the other hand, private mobilised finance for LDCs and SIDS was very limited, underscoring the need for tailored international support to help address the challenges faced by these countries in attracting private investment for climate action.