The Australian government arrived at the 2019 Pacific Islands Forum with no update to share on its emissions reduction targets or level of climate ambition. Instead, Australian Prime Minister, Scott Morrison, and then-Minister for International Affairs and the Pacific, Alex Hawke, announced a pledge of $500 million in climate aid to the Pacific islands be spent between 2020 and 2025. It was likely hoped that the pledge would detract attention from Australia’s weak climate mitigation policies. However, the pledge was met with mixed reactions by the region, with Pacific island leaders stating that this was yet another example of Australia offering financial assistance in exchange for the Pacific islands’ silence on climate change.

Australia has a history of using its position as the largest aid donor in the region to influence bilateral and multilateral negotiations on climate change in the region, as detailed in 01: Australia: The Pacific Family Bully. Dr. Vijay Naidu, Professor of Development Studies at the University of the South Pacific in Fiji states that, “because Australia is the most powerful actor and can be labelled the regional bully, it managed to push small islands states in the region for a long time to accept its agenda on greenhouse gas emission limitations – it pushed for 2 degrees warming rather than 1.5 degrees”.

This relationship of aid dependency between Pacific island countries and Australia may be exacerbated by climate change in coming years, as extreme weather events like severe tropical cyclones cost hundreds of millions of dollars – sometimes billions – in economic damage each time they make landfall in the Pacific islands. Pacific island countries may need to rely more heavily on external humanitarian assistance as a result. Dr. Naidu also warned that during the Coronavirus pandemic, Pacific island countries are in a state of increased aid dependency due to the severe impacts of Covid-19 on their economies and their need for vaccine doses, and so will be particularly cautious about their relations with Australia. Through the course of this investigation, Greenpeace Australia Pacific found that while former leaders and opposition members responded to our queries and interview invitations, government officials currently in power did not. Speaking out about Australia’s climate policies carries a degree of political risk, as aid may not be recommitted in following years.

The announcement of the $500 million climate aid pledge also came as Australia shirked its international responsibility to climate justice, wherein developed countries acknowledge their culpability for ‘legacy’ greenhouse gas emissions and provide climate finance to developing countries that have been the first to experience climate change impacts. In 2018, the Australian government withdrew its support for the UNFCCC’s Green Climate Fund, a climate finance instrument that is, firstly, multilateral (meaning the donor cannot choose the recipient country or organisation, and remains anonymous to them) and, secondly, requires financial contributions to be additional to existing foreign aid. Morrison told The Alan Jones Breakfast Show, that Australia is not held to account by the signatories of the Paris Agreement and “nor are we bound to go tip money into that big climate fund, we’re not going to do that either”.

The Minister for the Pacific Alex Hawke provided a more measured defence of Australia’s withdrawal from the Green Climate Fund, stating to ABC Radio National that “we think our know-how and experience and relationships in the [Pacific] region mean that when we put up a fund it will have a greater impact faster than the Green Climate Fund”. Hawke did not mention, however, that giving aid bilaterally allows Australia to gain leverage in the region or attach either implied or explicit terms to that aid. The Hon. Ralph Regenvanu, Leader of the Opposition in Vanuatu and former Minister of Foreign Affairs told Greenpeace Australia Pacific: “where its sphere of influence is concerned, Australia can be much more influential bilaterally than it can multilaterally – there is leverage in bilateral aid that isn’t available through the multilateral funding”.

Further, if Hawke and the Coalition government were genuinely concerned about the Green Climate Fund’s bureaucratic accreditation process, aid funding could be allocated to assist Pacific states and local organisations with the process. With this accreditation, Pacific island countries and local organisations would then have direct access to this multilateral avenue of climate finance. An anonymous source told Greenpeace Australia Pacific that at the COP25 climate negotiations in 2019, Australia also pushed hard against the creation of a technical support arm (through the ‘Santiago Network’) for developing countries to access ‘loss and damage’ financial assistance for climate impacts, even when the entire Pacific bloc called for its establishment. This once again suggests that Australia’s offers of climate finance to the Pacific islands are self-interested and given only when Australia knows it will gain bilateral leverage over Pacific island countries. 

The $500 million climate aid pledge in 2019 was also taken with a grain of salt, as the commitment was not for additional funding but a reallocation of Australia’s existing aid budget. While Prime Minister Scott Morrison made his way to the Pacific Islands Forum in Tuvalu, a representative of his Office was evidently concerned that the listeners of The Alan Jones Breakfast Show on 2GB talkback radio had misunderstood this detail. Phoning into the show, the Prime Minister’s Office clarified that the $500 million pledge did not represent any additional contribution to the existing foreign aid budget.

Australia’s aid budget is at a historic low and not considered generous by international standards. In 2020, comparable countries such as Canada and Sweden spent $4.9 billion and $6 billion on overseas development assistance (ODA) compared to Australia’s $2.5 billion. When ranked by Gross National Income (GNI) Australia came in 21st in the OECD on generosity, contributing 0.19% of its gross national income to foreign aid compared with Canada giving 0.31% and Sweden and 1.14% of Gross National Income. According to ANU’s Development Policy Centre, the internationally agreed aid-to-GNI target is 0.7%. Pacific island leaders have responded with disappointment to cuts and freezes of Australian foreign aid in recent years. In 2017, the Hon. Dr. Hilda Heine (then-President of the Marshall Islands) reacted to news of the foreign aid budget freeze by saying that “no matter how much [aid] is concentrated in the Pacific, it will impact all of us”. Australia has redirected much of its foreign aid to concentrate on the Pacific; however, the downward trend of Australia’s overall foreign aid budget affects both the amount of funding available to the Pacific and developing countries outside the region.

When compared to other Australian government spending, the $500 million pledge is dwarfed – particularly in comparison with spending on projects and programs that Pacific island countries have expressed concern over due to their regional and international implications. For instance, in the 2020-2021 financial year, the Australian government gave $7.84 billion (AUD) in subsidies to the fossil fuel industry through the Federal Fuel Tax Credit Scheme. The nuclear powered submarine deal with the US and UK is estimated to cost around $100 billion (AUD), with Australian Finance Minister Simon Birmingham confirming on ABC Radio National that the new deal is likely to cost more than the previous $90 billion (AUD) deal Australia had made with France for non-nuclear powered submarines.

The Climate Action Tracker rates Australia’s climate finance as “critically insufficient”, noting that “Australia’s climate finance contributions have been low and are not in line with any interpretation of a fair approach to meeting the Paris Agreement’s 1.5 degree limit”. Due to inadequate climate finance in the Pacific, the Pacific Small Island Developing States (PSIDS), Alliance of Small Islands States (AOSIS) and the Pacific Islands Climate Action Network (PICAN, a consortium of civil society groups in the Pacific) are going to COP26 in Glasgow with a set of climate finance demands supported by Greenpeace Australia Pacific. These demands include “new and additional climate finance” – scaled up and separate to foreign aid – “that is equivalent to real needs and is grant-based”. This requires immediately doubling Australia’s current climate finance to $3 billion annually between 2021-2025, and $12 billion annually by 2030 to meet its climate finance fair share, and recommitting to the UNFCCC’s Green Climate Fund. Without drastically upscaled finance, PICAN states, “the Pacific cannot meet its climate targets or sustainable development goals, enable adaptive action and resilience in our communities or respond to the devastating levels of loss and damage we face”.

Australian aid for climate change adaptation has also been met with cynicism by some Pacific island leaders and communities for addressing the symptoms of climate change but not the cause. Concern is raised about how long adaptation efforts will work in the region without a substantial drop in greenhouse gas emissions before 2030. As the Chair of the Tuvalu Climate Action Network puts it, “the more we mitigate, the less we have to adapt. The strip of land [of the Funafuti atoll] in Tuvalu is less than 400 metres wide, how far inland can we migrate against rising sea levels?”. Professor of International Security at University of Adelaide, Dr. Joanne Wallis, told Greenpeace Australia Pacific that focusing on the climate resilience of communities can divert attention from the fact that Pacific communities do not want to experience the effects of climate change in the first place.

Dr. Vijay Naidu states that Australia’s preference for offering adaptation aid over strengthening its domestic mitigation policies has affected the Pacific’s view of Australia:

The single most effective climate action that the Australian government can take is a science-based 75% reduction in greenhouse gas emissions by 2030, to ensure net-zero emissions by 2050. This would have the most significant impact on ensuring the security and survival of Pacific communities.

Climate adaptation aid is, however, still much needed in the Pacific. The world is already experiencing the effects of climate change, and so mitigation and adaptation are both required. Even if the world is able to limit global warming to 1.5 degrees Celsius above pre-industrial levels, which it is currently not on track to achieve, there are many climate impacts experienced at 1.5 degrees Celsius of warming. This is especially true for the low-lying and cyclone-vulnerable states of the Pacific. The fate of low-lying atoll states (the Marshall Islands, Kiribati, Tuvalu and Tokelau) in the Pacific is widely known, but larger countries are also vulnerable to sea level rise. As Dr. Naidu puts it:

Sea level rise and related impacts such as flooding, permanent inundation (salt-water intrusion in fresh water aquifers and agricultural land) and erosion will “persist well beyond the 21st century even under 1.5 degrees of warming” according to the IPCC. With every increment of global warming above 1.5 degrees, those climate impacts become more severe.

Climate adaptation is therefore needed alongside substantive emissions reduction policies to mitigate against climate change. However, while Australia may purport to give certain levels of aid to climate adaptation projects in the Pacific, a closer look reveals that these projects are at best only tangentially related to climate change.

Hundreds of millions of dollars in Australia’s aid budget have been counted as ‘climate adaptation’ aid despite those funds being allocated to projects with no link, or at best a tangential link, to climate change. Dr. Terence Wood, Research Fellow at the Development Policy Centre at the Australian National University, is an expert on Australian and New Zealand foreign aid. His co-authored report from this year (2021), Change and continuity in Australian aid: What the aid flows show, finds that when it comes to climate adaptation aid “Australia is well below the best performing OECD Development Assistance Committee countries, below the median and towards the tail”. Averages from the period 2016-2018, show that about 1% of Australian aid goes towards climate adaptation projects. Comparable countries such as Canada and Sweden allocate 10% and 6%, respectively, towards climate adaptation projects.

There is a significant discrepancy between Dr. Terence Wood’s findings and those of the Donor Tracker’s most recent report, which claims 20% of Australia’s bilateral aid goes towards climate adaptation. The reason for this discrepancy is telling, and goes to the heart of problems with Australia’s climate aid reporting to the OECD. Dr. Terence Wood explains that projects can either be tagged as ‘principally focused’ or ‘significantly focused’ on climate adaptation. To understand Australia’s true contribution to climate adaptation, Dr. Wood only uses data from the ‘principal’ category. This is because there is too much leniency in the OECD rules on the ‘significant’ category. Dr. Wood explains,

Greenpeace Australia Pacific reviewed projects tagged as ‘significantly focused’ on climate adaptation in the Pacific in 2018 and 2019 using the OECD’s database. That review also found that the projects with the highest levels of funding had at best a tangential link to climate change and at worst no clear link. Indeed, many of the long descriptions of the projects contained no reference to the climate or environment.

Prominent examples of projects tagged as ‘significantly focused’ on climate adaptation include 3 large governance programs in Papua New Guinea mentioned by Dr. Terence Wood (costed at $16.47 million, $18.15 million and $24.07 million USD each). These governance programs are described as an overall ‘Governance Facility’, encompassing “economic governance, private sector development, decentralisation and citizen participation”, but no mention is made of climate change or the environment. A 113 page evaluation of the Governance Facility undertaken for Australia’s Department of Foreign Affairs in 2019 also does not mention climate change, and climate adaptation and resilience were not measures used to evaluate the project’s effectiveness.

Various workplace skills programs, including a $9.52 million (USD) region-wide ‘Australia Pacific Training Coalition’ and a Kiribati employment program ($8.24 million USD in 2018 and 2019) were also counted as ‘significantly focused’ on climate adaptation without any mention or explanation of their relevance to climate change. The Kiribati workforce skills program is aimed at supporting the Kiribati government to “provide labour market demand driven skills to young people who seek to work in domestic and offshore labour markets”. This is no doubt a worthy program; however, its relevance to climate adaptation is unclear. 

Greenpeace Australia Pacific asked The Hon. Anote Tong, former President of Kiribati (2003-2016), whether any Australian aid projects in Kiribati were misleadingly described as ‘significantly focused’ on climate adaptation. According to Tong, during his Presidency, in 2013, an Australian funded road rehabilitation project in South Tarawa, Kiribati, was labelled as a climate adaptation project. While the rehabilitation of the road was much needed, it did not have any relevance to climate change or increasing the resiliency of Kiribati’s population. As Anote Tong put it: 

Greenpeace Australia Pacific was able to find this Australian funded road rehabilitation project on the OECD database for 2013. The long description of the project mentions road rehabilitation and transport, but it does not once mention climate change, climate adaptation or climate resilience – yet it is counted as aid that is ‘significantly focused’ on climate adaptation.

Further, Australia’s spending on projects ‘significantly focused’ on climate adaptation significantly outweighs its spending on projects ‘principally focused’ on climate adaptation – such as sea walls, cyclone proofed infrastructure, and mangrove planting initiatives. In 2018, Australia’s ‘significantly focused’ climate adaptation aid was $255.07 million (USD) worldwide, compared to ‘principally focused’ spending of $26.94 million (USD).

In 2019, Australia spent $514.96 million (USD) on ‘significantly focused’ climate adaptation aid and did not report on its ‘principally focused’ spending. When asked why there is nothing reported for ‘principal focus’ climate adaptation in 2019, Dr. Terence Wood replied that “it must be the result of a reporting error on Australia’s behalf. I suspect that eventually some of the climate adaptation related spending tagged as ‘significant’ will be moved to ‘principal’. My guess is that it won’t be a lot given how little was tagged as ‘principal’ in 2018”. Greenpeace Australia Pacific made numerous attempts to contact the Australian Department of Foreign Affairs and Trade about its 2019 climate aid reporting but the department did not respond before publication.

There is significant room for improvement for the Australian government in both the generosity of its climate finance as well as the transparency and accuracy of its data on the alleged ‘climate focused’ projects it funds. Oxfam International’s Climate Finance Shadow Report urges governments to adopt best practice reporting of climate finance, including project-level reporting of full project value and the amount being counted as climate-related finance. The UK and the US follow this process, calculating the value of a project’s climate change component on a project-by-project basis. Oxfam recommends that project data is accompanied with honest explanations of how the climate finance component of the project costs was calculated, to ensure transparency and confidence in the data. Australia would be wise to adopt these reporting procedures, in addition to increasing its allocation to projects with an obvious climate adaptation focus (such as sea walls, cyclone proofed infrastructure, and mangrove planting initiatives).

While the Australian government talks loudly about its climate aid to the Pacific, partners in the region have an understandable cynicism about what motivates these pledges and the loopholes that may be exploited in the delivery and reporting of the aid. A simple reallocation of the current foreign aid budget, which is at a historic low and lacks the generosity of many other OECD nations, is inadequate to meet the climate challenges faced by the Pacific. Further, tagging projects as ‘significantly focused’ on climate change when there is at best a tangential link has led to a significant over-estimation of Australia’s climate aid to the Pacific. This impedes a clear understanding of the work already undertaken to increase the Pacific’s climate resilience and the work that still needs to be done.

Greenpeace Australia Pacific supports the climate finance demands of the Pacific Islands Climate Action Network for drastically upscaled climate finance, which is additional to the foreign aid budget, equivalent to real needs, and grants based. The Australian government should also recommit to multilateral climate finance instruments such as the UNFCCC’s Green Climate Fund, which allow climate vulnerable countries to directly access climate finance without the leverage or expectations implicit (or explicit) within bilateral aid arrangements. In addition, the Australian government needs to increase its contributions towards ‘principal focus’ climate adaptation projects and make significant improvements to its aid reporting procedures. Reports to the OECD should include clear and honest descriptions of the cost of each project’s climate related component, as well as an explanation of how that climate component is calculated. This will help ensure Australia’s aid to the Pacific is not greenwashed but actually supports the climate resilience of the Pacific islands.