Chatham House, London, 12 September 2024 —  It’s nice to be back at Chatham House. I spoke here in November 2022 about the UK’s place in a changing world. Today I want to focus on some of the poorest and most vulnerable parts of the world; the climate, conflict, and inequality crises people living there face; the need for new thinking about how to support them; and the coalition that is needed to address their increasingly untenable situation.

When I was Environment Secretary in 2006/7, it felt as though talking about adapting to climate change meant admitting defeat on mitigating climate change. But now mitigation efforts have not gone far or fast enough to prevent severe damage, so we need significantly more adaptation efforts as well as an even sharper drive to decarbonisation. Nowhere is this more needed than in the poorest places where IRC works. And nowhere is a different approach to adaptation needed, because business-as-usual is failing these countries twice over – on both mitigation and adaptation.
 

New Geography of Crisis

In the work we do at the International Rescue Committee (IRC) in crisis zones around the world, we see the climate crisis changing the geography of poverty. For example in the Central Sahel region of West Africa, temperatures are rising 50% faster than the rest of the world. National security officials refer to climate change as a “threat multiplier” because of the way it compounds and accelerates instability and conflict. But we’re also seeing that climate change is an “inequality multiplier” - ravaging the livelihoods of low-income communities and making it harder for them to pull themselves out of debt and poverty. This is the vicious circle we need to break. 

This new geography of poverty makes for a more flammable world, metaphorically and literally. IRC analysis finds that just 16 climate-vulnerable and conflict-affected countries - including Sudan, Myanmar, Syria and Somalia - represent a staggering 43% of all people living in extreme poverty, 44% of all people affected by natural disasters, and 79% of all people in humanitarian need.

This trend towards the concentration of crisis is only deepening. Three decades ago, 44% of conflicts happened in climate-vulnerable states. Now it is more than two-thirds. And while the rest of the world has cut extreme poverty by over half since the 1990s, it has grown by half in fragile and conflict-affected states. 

The countries at the heart of this new geography of crisis are not only among the most impacted by the climate crisis. They are among the least supported financially. Debt burdens are syphoning away critical resources needed for development, adaptation and resilience. Humanitarian aid budgets are not keeping pace with escalating needs. This is especially troubling for climate-vulnerable, conflict-affected countries in Africa.

Consider the following. African countries are diverting 2-5% of GDP on average to respond to extreme climate events. When the Covid-19 pandemic hit, African countries spent more on interest payments on their debt than on healthcare. That spending has only risen since then, because interest rates have risen; as Larry Summers and his colleagues on the G20 Expert Panel reported, over $200 billion was taken out of developing countries in 2023. Last year African governments spent over 50 times more on external debt payments than the entire UK aid budget to the continent. The share of G7 aid going to Africa today is at its lowest point in 50 years.

The Limits of Business as Usual

The problem is the business-as-usual approach to financing climate action, humanitarian response, and poverty alleviation in fragile states is disjointed and incoherent. Three challenges are holding back the business-as-usual approach from working in this new geography.

First, lack of appropriate delivery models. Climate and development finance often flows where it is easiest to deliver, through national governments in stable countries, as opposed to where it is needed the most. This is a problem for conflict-affected communities in particular, who often live beyond the reach of the government’s control or influence. In fact, World Bank and other funds are too often allocated but not disbursed in conflict states for this reason. It is why we talk about the need for a people-centred approach. 

Second, the policy response to the climate crisis has been lacking. The problem is not just that IRC estimates a 75 percent annual gap between adaptation support needed and what is actually provided to the 16 countries I mentioned caught at the intersection of conflict and the climate crisis. Where climate and development investments do exist, they rarely assess and adapt to conflict risks, limiting their effectiveness in these settings. And with crises increasingly protracted, humanitarians are stepping in to deliver services without the long-term commitments and infrastructure that are needed. 

Third, there is Lack of equitable financial resources. Ninety percent of climate financing flows to middle and high-income, high emission-producing countries. For what’s left over, the more fragile a country is, the less climate finance it will receive, according to UNDP. The International Crisis Group estimates that conflict-affected communities receive just one-third of the adaptation funding that people in non-conflict settings receive on a per capita basis.

So there are three big gaps in climate finance and action in crisis settings: what to do, how to fund it, and how to deliver it. The good news is that there are solutions that we know work that can help close these gaps.

Business as Un-Usual

When it comes to what to do, we need a comprehensive route map for adaptation and resilience that thinks about the people affected by climate change, not just the land affected by climate change. We’ve seen important advances in the science and technology required to respond to the climate crisis, but there’s a gap between those advancements and how they are used to improve the lives of vulnerable people. No single actor will have all the answers from urban planning to the protection of coastal cities, but IRC and other civil society groups are critical partners in taking evidence-based technologies and interventions to scale in the places that need it the most.

In Nigeria, IRC is leveraging the latest climate modelling, AI and machine learning systems, and our experience with cash assistance not just to respond to needs when a climate shock hits, but anticipate needs and deliver support before a crisis starts. Research from this program shows that anticipatory cash can build climate resilience, improve food security, and protect economic livelihoods at the same time reducing negative coping strategies.

In Syria, Pakistan, Niger and South Sudan, IRC is working with local farmers on innovative ways to strengthen the resilience, quality, and yield of crops through a seed system strengthening project driven by citizen science and incentives for farmer participation. By identifying and scaling production of high-yielding and climate-resilient seeds, it’s possible to build a sustainable food system that’s resilient to climate shocks even in protracted conflict settings.

The requirement is not just to take new technologies and innovations to communities in need, it’s about ensuring that humanitarian action takes a climate-sensitive approach and climate action takes a humanitarian approach. For instance, in the Lake Chad Basin, IRC combines a package of services that address urgent humanitarian needs such as health, food security, nutrition and services for women and girls with programmes supporting resilience to climate impacts and longer-term economic opportunities in sustainable farming or access to markets. These programmes are delivered with partners to serve the hardest to reach communities in danger of being left behind. What is more these programmes are designed to maximise scale and outlive IRC’s intervention by delivering alongside local partners and sharing technical approaches to protection services with government led services. This approach that delivers in spite of the stove piped system is an illustration of the role humanitarians play in climate action and development and progress towards the SDGs for all.

When it comes to how to fund it, the ongoing negotiations on the global climate finance target - the New Collective Quantified Goal (NCQG), the myriad climate funds like the Green Climate Fund and the Loss & Damage Fund, and new investments by the World Bank via a replenished IDA fund will all play a role.

The World Bank’s International Development Association finance is one of the few sources of grants (and some highly concessional loans) for these climate-vulnerable, conflict-affected countries given their debt burdens and lack of creditworthiness. But while IDA financing commitments to these countries are steadily increasing, the share of commitments actually disbursed is lower than for other, more stable countries. Making IDA a more effective fund requires a robust replenishment at the end of this year and the implementation of high-level reforms to improve its disbursement in conflict settings, including better use of non-state partners in delivery in conflict settings, to overcome insecurity and capacity constraints. I say more about this in a moment.

The people we serve need a set of decision rules that force funding into the most vulnerable places. Otherwise it is deemed all too risky and they get left out. For the various climate funds, we believe the UNFCCC should formally recognise the adaptation gap, particularly through its new climate finance targets defined in the New Collective Quantified Goal, and support the development of improved, more accurate Nationally Determined Contributions and National Action Plans to bolster adaptation financing in conflict-affected countries. IRC believes that setting a target for climate-vulnerable, conflict-affected countries to receive 18% of all adaptation finance for developing countries to reduce this gap, based on the current best available estimate of the costed needs, would help not just direct more climate finance to where it is needed most; it would also be a fair recognition of those needs. We also believe a balanced sub-target for mitigation and adaptation finance (50-50%) is needed to codify the UN Secretary General’s proposal, with loss and damage established as a separate sub-goal.

When it comes to how to deliver it, we have to take more risk and embrace a more flexible approach to delivery partners. When the business-as-usual approach of relying on national governments as delivery partners is not working, donors must shift toward a “people-first” approach to climate finance that prioritises delivery partners that can reach these communities. This includes enhancing collaboration with and providing direct financing for non-government partnerships at scale where needed, and supporting hybrid operating models to finance both government and non-government actors in development programming. These partnerships have demonstrated their added value in navigating fragility and insecurity while safeguarding access to vital services for target communities.

It is especially important to strengthen partnerships with civil society who represent marginalised groups, such as disability, youth and women’s rights groups and conflict impacted communities beyond the government’s access. This is a matter of practicality not ideology. It is the only way to work in conflict settings. This is what real, not rhetorical, “localisation” looks like: shifting power to local responders in affected populations, particularly within marginalised communities, and building trust so that they can lead and deliver aid efforts. 

Time for the UK to Come Back on the Stage

Global problems take global action, but the new government here in the UK has both an incredible opportunity but also a serious responsibility to make climate, development, and humanitarian action work better together. The decade-plus in which the UK has been in retreat in the field of overseas aid could not have been worse timed, given the trends in global humanitarian need.

Here are three practical steps where the UK could come back onto the stage in a meaningful way.

First, DFID’s 1997 white paper on international development put tackling poverty centre stage in funding allocations. Today, extreme poverty is increasingly concentrated in fragile and conflict states. From a situation where a couple of decades ago 80 per cent of the extreme poor were in stable states, today around 50 per cent are in fragile states. So the UK should be aiming to devote half the aid budget to fragile and conflict-affected states. At the moment it is a paltry 15% - less than half what it was in 2018.

Second, the UK can roll out commitments to investing in climate resilience and adaptation, contributing to green growth. We all know the debate, and the fact, that all the economic modelling shows that fighting climate change, through decarbonisation, is cheaper than living with climate change. This was first established by Lord Stern nearly twenty years ago. But this does not only apply to developed economies or to climate crisis mitigation. It also applies to fragile states and climate adaptation. The proposed Resilience and Adaptation fund is a good example of this; when implemented, should prioritise achieving impact and scale.

Third, the IDA21 replenishment is a vital moment to support improvements of IDA’s financing for and delivery in conflict settings. We know that the UK Government has pledged that the restoration of the commitment that 0.7 per cent of GDP for overseas aid can only be achieved when economic conditions allow. But before then IDA is a prime example of how the UK’s experience of service delivery and public service reform can be put to good use.

Of course the UK cannot and should not offer a quick fix. But it needs to be part of the argument. As I argued nearly two years ago here at Chatham House when discussing the UK’s role in the world, we remain one of the richest countries; we have platforms that are not available to others; and we have public bodies, private companies and NGOs with ideas and expertise that are globally relevant. There is no better time than now to put them to good use.