Chinese climate lending greater than previously understood: report
by AFP Staff Writers
Washington (AFP) Sept 11, 2024

Chinese financing for projects addressing climate change in developing countries has been greater than previously thought, a Washington-based think tank said Wednesday, but added that Beijing appears to be pulling back lending recently.

In particular, the country provided almost double in bilateral climate financing to developing countries than the United States did over the 2017-2021 period, said the Center for Global Development (CGD) in a report.

"Although these are measured slightly differently, and China's finance is much more loan-based, we estimate that Chinese funders provided $3.0 billion per year for climate projects, relative to $1.5 billion from the US," the CGD report added.

Its analysis, drawing on financing data from independent databases, seeks to inform discussion on China's role in international climate financing ahead of November's COP29 summit.

"Western countries have said they will only increase their climate finance contributions when China and others start to pull their weight," said CGD senior fellow Ian Mitchell.

"But our study shows that China is already a significant contributor of climate finance," he added.

However when United States and Chinese climate funding to global institutions like the World Bank is included, the United States contributes more overall, the study noted.

Climate financing typically involves projects to lower emissions and ensure infrastructure is more resilient to climate change.

Since the launch of the Belt and Road Initiative in 2013, China contributed an average of $3.8 billion per year in climate-related finance to developing countries, the report said.

Overall, the contributions until 2021 came up to some $34.3 billion.

But the report noted that 97 percent of China's climate-friendly finance came as loans, while a significant portion of US climate support is in the form of grants which do not need to be repaid.

More recently, such financing from China appears to have dropped in value and as a share of total bilateral finance to developing countries too, CGD said.

"China has been scaling back the Belt and Road Initiative since the beginning of the pandemic, and we're seeing signs that its climate finance could be a casualty of that decrease," said Mitchell.

China is not obliged to report its climate finance figures and does not do so since it is a developing country under the UN Framework Convention on Climate Change, CGD noted.

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