FINANCING CLIMATE ACTION AND THE COVID-19 PANDEMIC: AN ANALYSIS OF 17 DEVELOPING COUNTRIES

The analysis reveals that the COVID-19 pandemic has widened the climate finance gap in developing countries, leading to domestic budget reallocations away from climate projects toward health and economic recovery. International climate finance has also decreased, with a higher reliance on loans that increase national debt burdens. The report highlights that climate-finance needs, estimated at $4.6 trillion based on a sample of NDCs, far exceed current flows, and that pandemic-related restrictions have delayed the approval and execution of critical climate projects.

• The COVID-19 pandemic caused many developing countries to reallocate or cut domestic climate budgets to fund health infrastructure and economic recovery, leading to project delays.
• International climate finance decreased during the pandemic, with a notable drop in Official Development Assistance (ODA) for projects where climate was either a principal or significant objective.
• A significant portion of international climate finance is provided as loans rather than grants, which exacerbates the debt burden of developing nations.
• There is a massive gap between the financial needs of developing countries and available flows; an analysis of 74 non-Annex I countries' NDCs estimates total financial needs at $4.6 trillion.
• Some countries have reported increased climate finance by including extractive industries, such as natural gas, in their totals, which may misrepresent actual climate-positive action.
• Pandemic-related lockdowns, travel restrictions, and the inability of boards to meet have delayed the approval and implementation of climate projects.
• Climate-finance tracking tools, such as Climate Budget Tagging (CBT), are being adopted by a small but growing number of countries to improve transparency and baseline assessments.
• Natural disasters occurring during the pandemic further strained the budgets of developing countries, compounding the economic losses.

APA

ALAYZA, N., & CALDWELL, M. (2021). FINANCING CLIMATE ACTION AND THE COVID-19 PANDEMIC: AN ANALYSIS OF 17 DEVELOPING COUNTRIES. World Resources Institute. https://files.wri.org/d8/s3fs-public/2021-10/financing-climate-action-covid-19-pandemic.pdf?VersionId=TMOS7TyYBnE9FAhjVZWubqBGrc_k1ycm&ap3c=IGZLhgwZto0flvEDAGZLhgzEivW5hmLI3rkpP5WlkOkyGYs73Q

Chicago

ALAYZA, NATALIA, and MOLLY CALDWELL. FINANCING CLIMATE ACTION AND THE COVID-19 PANDEMIC: AN ANALYSIS OF 17 DEVELOPING COUNTRIES. World Resources Institute, 2021. https://files.wri.org/d8/s3fs-public/2021-10/financing-climate-action-covid-19-pandemic.pdf?VersionId=TMOS7TyYBnE9FAhjVZWubqBGrc_k1ycm&ap3c=IGZLhgwZto0flvEDAGZLhgzEivW5hmLI3rkpP5WlkOkyGYs73Q.

Wikipedia

{{cite report |last1=ALAYZA |first1=NATALIA |last2=CALDWELL |first2=MOLLY |title=FINANCING CLIMATE ACTION AND THE COVID-19 PANDEMIC: AN ANALYSIS OF 17 DEVELOPING COUNTRIES |publisher=World Resources Institute |date=November 2021 |url=https://files.wri.org/d8/s3fs-public/2021-10/financing-climate-action-covid-19-pandemic.pdf?VersionId=TMOS7TyYBnE9FAhjVZWubqBGrc_k1ycm&ap3c=IGZLhgwZto0flvEDAGZLhgzEivW5hmLI3rkpP5WlkOkyGYs73Q |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{alayza2021financing, author = {ALAYZA, NATALIA and CALDWELL, MOLLY}, title = {{FINANCING CLIMATE ACTION AND THE COVID-19 PANDEMIC: AN ANALYSIS OF 17 DEVELOPING COUNTRIES}}, institution = {World Resources Institute}, year = {2021}, month = nov, url = {https://files.wri.org/d8/s3fs-public/2021-10/financing-climate-action-covid-19-pandemic.pdf?VersionId=TMOS7TyYBnE9FAhjVZWubqBGrc_k1ycm&ap3c=IGZLhgwZto0flvEDAGZLhgzEivW5hmLI3rkpP5WlkOkyGYs73Q}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }