How do donors integrate climate policy and development cooperation? An analysis of the development aid policies of 42 donor countries

Abstract

This article assesses how donor countries integrate climate action into their development aid policies. An analytical framework is developed for the systematic comparison of development aid policies along three dimensions: hierarchy of policy objectives, types of measures the donors implement, and linkages to international climate negotiations. Analyzing the development aid policies of 42 donors, we find that only three have redesigned their development aid policies to fully integrate climate policy concerns. Instead, donors treat climate change as a thematic priority area. This includes several donors that are currently not obliged to provide climate finance under the UNFCCC. Furthermore, five major donor countries emphasize the use of diverse foreign policy tools to support climate action in developing countries. Importantly, we identify how other development goals (poverty, gender) are integrated with climate policy goals. Only two donor countries clearly separate development aid and climate finance. Luxembourg states that its climate finance pledge is additional to development, while New Zealand has a separate climate finance strategy where the allocation of funds is based on climate mitigation effectiveness concerns. Key policy insights Climate finance channelled through development aid programs is treated as a thematic priority area and mostly steered by existing development aid priorities and partnerships rather than requirements for effective climate policy. Despite more than 15 years of debate on new and additional climate finance, donors still do not spell out the principle of additionality in their policy documents. This applies both to Annex II and non-Annex II donor countries. Two donors have published separate climate finance strategies but for different purposes: New Zealand to separate between development and climate policy goals and Ireland to ensure alignment between its development goals and climate finance pledges. Few donors differentiate between climate adaptation and mitigation as two different cross-cutting issues with different trade-offs and synergies. Aid donor policies and instruments to leverage private capital are more advanced for climate mitigation than for adaptation.