Sweltering heatwaves, wildfires and drought have made the climate crisis feel more immediate in the UK this year. Three in every four children in the UK have already been exposed to extreme heat in 2026. Beyond these direct impacts, climate shocks are also driving food price inflation, increasing household costs. These serve as stark reminders that the UK’s prosperity and children’s futures are closely tied to global climate outcomes.
That is why the announcement by the new Foreign Secretary, Ed Miliband, to put climate and development at the heart of the UK’s foreign policy, felt welcome after deep cuts to Official Development Assistance (ODA) and an approach to international development that was marked with contradictions. However, political statements alone will not restore the UK’s global credibility on climate and development – we urgently need to see action. Reforming its approach to international climate finance (ICF) offers one credible pathway for the UK to re-establish itself as a leader on climate action and strengthen its ability to shape global climate governance, including through its upcoming leadership role in the G20.
The credibility of the UK’s ICF commitments is being weakened
The UK’s record on ICF offers an example of the gap between rhetoric and delivery. In 2019, the government pledged £11.6 billion for the third round of its ICF (ICF3) for 2021-2025, to be delivered entirely through ODA. It started well, with the level of ambition appearing to match the political commitment: alongside increasingly strong statements on tackling global climate change came a pledge to double ODA support during the ICF3 period. However, two rounds of aid cuts during its implementation meant the target became impossible to achieve. In 2023, the Government shifted the goalposts by reclassifying more of existing ODA spending as climate finance in order to meet the target, despite not all of this aligning with international practice. The focus shifted from maximising climate impact to managing internal accounting pressures.
If there was one place where the UK could have demonstrated that its ICF3 commitment remained meaningful, it was through honouring its pledge to the second replenishment of the Green Climate Fund (GCF-2). Instead, that contribution was slashed by half. If headline commitments can be met without climate-specific contributions, what incentive remains to protect commitments to flagship mechanisms such as the GCF?
For the post-2025 period, the UK became the first high-income country to announce an ICF pledge. It also, for the first time, split its ICF4 commitment into ODA and non-ODA targets[1]. The former has seen a commitment of £6 billion over three years from 2026/27 to 2028/29, with an additional £6.7 billion committed through non-ODA instruments. In doing so, the Government signalled a different approach: public finance instruments such as guarantees, equity would also be counted and reported as part of the ICF4 offer.
With the significant reduction in ICF4 ODA target from the previous round, the expectation was that efforts to shift goalposts on what counts would end. But less than a month after the strategy outlining ICF4 priorities was published - and following a change in leadership - the first crack appeared. On 22 July, the Prime Minister announced that there would be a £2 cap on bus fares in England. What was in the small print, was that this would be funded by cutting grants within the £6 billion ODA component by £400 million, and replacing them with profit-making loans that sit outside fiscal rules. OECD Development Assistance Committee (DAC) members are also pushing for a greater share of such loans, including those channelled through mechanisms like the Tropical Forest Finance Facility (TFFF), to count as ODA.
It’s also worth remembering that earlier technical accounting changes to ICF have not been reversed under ICF4. As a result, nearly £1.4 billion within the £6 billion ODA offer is already made up of finance that would not have been counted previously [2]. On the non-ODA element too, the goalposts may be shifting if guarantees linked to climate outcomes, committed in the past, but only formalised recently, are being counted towards the £6.7 billion target.
Taken together, these developments suggest that ICF4 extends the ICF3 pattern - preserving headline commitments while lowering the fiscal effort required to meet them, and in doing so undermining the government's promise of a new approach to development.
What needs to be done differently
Climate change and its devastating impacts are global, requiring global cooperation and solutions. However, as one of the biggest historical emitters, the UK has a responsibility to support countries and communities that have contributed the least to the climate crisis but suffer the most from it. The UK Government should articulate ICF both as a commitment to solidarity with, and climate justice for children and communities on the frontlines of the climate crisis and as an investment in its own future.
Several gaps also need to be addressed in the UK's current approach to ICF, if it is to deliver and mobilise high-quality ICF for climate-vulnerable countries and communities.
- Show real fiscal effort by moving beyond creative accounting and increasing impactful spending, protecting grant-based finance, raising additional revenue through fair polluter-pays measures, and setting out a roadmap back to 0.7% of GNI for ODA.
- Embed clear principles of climate justice, equity, human rights and locally-led adaptation in ICF decision-making, partnerships and accountability.
- Reform approach to international cooperation on development and climate by championing ambitious reforms across tax, debt, and trade architecture, so lower-income countries have fairer access to resources and greater voice in economic decision-making. Yet neither the new development approach nor the ICF4 strategy takes this agenda forward. One concrete action the UK should use its G20 presidency for is championing the urgent changes needed to fix the Common Framework for Debt Treatments.
- Clarify the purpose of ODA and non-ODA finance, ensuring each instrument is used according to need, context and impact, instead of treating them as interchangeable parts of the same offer.
- Improve transparency by publishing clearer, more timely and granular data on what counts as ICF, the climate finance share and expected climate impacts of ICF-tagged programmes.
Above all, the UK must prove that its international leadership on climate and development has people at the front and centre, is built in genuine partnership with the Global South, and matches rhetoric with credible action on tackling crises like climate change that impact children in the UK and globally. The new Foreign Secretary has an opportunity, and a responsibility, to turn his commitment to prioritising climate and development in foreign policy into reality. He must urgently act to make it happen.
With inputs from Richard Watts, Daljeet Kaur and Yasmin Mahboubi
- The UK provided support for international climate action through non-ODA instruments prior to the ICF4 round; it is the first time they’re counting and reporting on it as part of their ICF offer
- Includes contributions to MDBs (approximately £1.1 bn) and Humanitarian Assistance to climate-vulnerable countries (approximately £110 million per year) counted as ICF
