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This week, we launched The Trillions Tracker to measure the financing gap for climate and development needs in low- and middle-income countries. There’s been progress, but a large gap remains.

We have a financing problem

I’ve spent more than a decade closely monitoring official development assistance, aka ODA…aka foreign aid.

I’ve been fortunate to meet some of the millions of people whose lives have been improved – and in some cases saved – by ODA.

But worryingly, current levels of ODA are far less than what’s required to address the climate, health, and development needs of people living in low- and middle-income countries. There are many reasons for that: isolationism, nativism, and tightening donor budgets, to name a few.

The result is that the world risks taking its foot off the accelerator at a time when climate change and other crises are jeopardising the lives and livelihoods of billions of people.

In short, the world has a financing problem. To measure and monitor it, ONE launched The Trillions Tracker.

It reveals that the world is making progress in closing the financing gap, but has a long way to go.

Read on to learn more.

– Sara Harcourt, Senior Policy Director, Development Finance

3 things to know

1. US$2.5 trillion per year in additional public finance is needed to protect people and the planet in low- and middle-income countries.

Why it matters: Transitioning our energy systems, combatting the impacts of climate change, and supporting people to lift themselves out of poverty are the great challenges of our time. Failing to tackle them will cost many lives, push millions more into poverty, and be more expensive than addressing those challenges now.

2. There’s been some progress, but an annual gap of US$1.75 trillion persists. Only 29% of the annual US$2.5 trillion financing gap has been met.

Progress towards the public spending gap

Why it matters: The climate crisis could push more than 132 million people into extreme poverty by 2030. Unless the world acts, 40 million children are at risk of stunted growth between now and 2050 as climate change worsens food security. Cash-strapped countries are being forced to choose between taking steps to address climate change, pay down their debt, or invest in other pressing priorities, like feeding, caring for, and educating their people.

3. The money to close the financing gap exists. What’s missing is political will. US$2 trillion globally is spent on militaries each year, US$1.3 trillion of that by rich countries. And yet crises that are impacting billions of people's lives right now aren’t given the same priority. The G7’s share of aid going to Africa is at its lowest point since 1973. And donor countries are diverting billions of dollars from foreign aid to pay for refugee costs at home.

Why it matters: There are numerous ways to fill the financing gap. Increasing ODA – especially concessional financing – is critical for meeting development needs. This includes a robust replenishment for the International Development Association, the world’s largest social fund for development. Hundreds of millions of additional dollars could be unlocked from multilateral development banks through policy reforms that cost limited additional investment. The solutions exist. But does the political will?

From the ONE Team

• ONE’s CEO Ndidi Okonkwo Nwuneli spoke at the Summit of the Future about the critical role that activists and civil society play in holding governments accountable. And she sat down with Focus 2030 to talk about what can be done to achieve the SDGs.
• David McNair spoke about geopolitics and finance reform with the Global Gambit, and about the link between climate change and financial inclusion at Goals House.
• Jenny Ottenhoff debated with Bright Simons on whether “The Golden Age of Replenishments is Over.”
• ICYMI: You can watch ONE’s dynamic UNGA event on “Africa at the Forefront of Global Financing Solutions.”
• Sara Harcourt on what needs to be done to close the financing gap.

In the queue:

• The power of electrification.
• The Sudan crisis has become a magnet for foreign malign influence and corruption.
• The US to donate 1 million mpox vaccine doses to halt the outbreak in Africa.

The ONE Campaign’s data.one.org provides cutting edge data and analysis on the economic, political, and social changes impacting Africa. Check it out HERE.

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