Why Wealthy Countries Owe the Less Developed Nations US$5 Trillion a Year in Climate Finance: An ActionAid Nigeria Perspective

Nigeria, like many developing countries, suffers immensely from the severe impacts of climate change. Our coastal communities, such as Lagos and the Niger Delta, face rising sea levels. Farmers in states like Borno, Adamawa, and Yobe grapple with droughts and unpredictable weather patterns, leading to food insecurity and loss of livelihoods. Our citizens endure the consequences of environmental degradation daily, from flooding in urban centers to desertification in the north. Meanwhile, the wealthiest nations, which have been industrialised for centuries while recklessly emitting carbon dioxide into the atmosphere, remain relatively unaffected compared to the devastation we witness daily in Nigeria and across other less developed countries. Their economic growth, built on fossil fuels, has enriched them while condemning our nation to climate-induced poverty, displacement, deepening debt, and hunger. 

Every year, Africa, Asia, Latin America & the Caribbean bear the brunt of escalating climate change through destroyed infrastructure, crop failures, disappearing lands, ruined livelihoods, and lost lives. The need for urgent global action to address this planetary crisis is clear. Every country must transition from fossil fuels to renewable energy, scale up regenerative approaches to agriculture and sustainable transport, protect and restore biodiversity, and recover from and prepare for climate impacts. Wealthy countries, therefore, not only have the obligation to cut their outsized emissions as rapidly as possible but also to pay for the climate chaos they have caused in the developing countries, including Nigeria. 

The costs of climate destruction continue to push less developed countries deeper into poverty and debt. By any fair logic, the costs of climate action should not be the burden of those most harmed and least responsible. If we are to avoid runaway climate change, wealthy countries need to step up and pay what is owed to the countries on the frontlines of the climate crisis they are largely responsible for. 

Studies by the Stockholm Environment  Institute (SEI) have calculated that even if the world takes urgent and sufficient action to limit warming to an average of 1.5°C, fair reparations for the costs to the less developed countries caused by past decades of excessive pollution in the wealthy countries, combined with projected escalating impacts, would amount to US$192 trillion by 2050. Breaking that down, the annual climate debt that wealthy countries need to pay to developing countries comes to US$5 trillion. 

To be clear: this is a debt that is owed, not a loan from the wealthy countries to the less developed. For the best results, the yearly US$5 trillion should be provided in grants, rather than loans that deepen countries’ vulnerability and create perverse incentives to expand fossil fuels. Additional private financing in the form of loans, insurance, or investments should not be counted towards fulfilling the wealthy nations' moral debt to the less developed nations. 

A new global goal on climate finance is set to be a hot topic at the UN COP29 climate negotiations in Baku, Azerbaijan, in November this year. With widespread recognition that developed countries’ broken promises on climate action and climate finance are pushing the planet to the brink, the new climate finance goal, which governments agree to, must be considered in the light of this climate debt and viewed as an opportunity to reset the planet’s future through a new commitment for climate ambition. We need trillions, not billions. 

Under the #PayUp campaign banner, an array of civil society groups, from trade unions to women and gender organisations, youth, and climate networks, are demanding that the wealthy nation clear the climate debt owed to the less developed nations.  

Wealthy countries may claim that jointly providing US$5 trillion a year in climate finance is an unreasonable expectation. But in 2020, during the COVID-19 pandemic, the same countries mobilized US$16 trillion in fiscal stimuli to support their economies, while the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, and the United States) spend over US$1 trillion each year funding wars and conflicts. More progressive tax measures that target the wealthiest individuals and corporations in wealthy countries could raise up to US$2 trillion for climate finance. The resources clearly exist, they are just being allocated based on current political will that fails to prioritise climate action and hardworking people. If trillions can be found for pandemic relief and military expenditures, the same financial commitment must be made to address the existential threat of climate change. 

The climate crisis is a shared challenge, but its impacts are not shared equally. The US$5 trillion climate debt is a down payment on a just future. It's time for wealthy countries to pay up. ActionAid Nigeria stands in solidarity with the less developed nations, demanding climate justice and accountability from the wealthy nations. 

 ActionAid Nigeria is committed to amplifying the voices of those most affected by climate change and demanding that wealthy nations fulfill their climate finance obligations. The call for US$5 trillion (about 34,090,909 Naira per person in Nigeria at the current exchange rate) a year is not just a financial demand; it is a demand for climate justice and a sustainable future for all Nigerians.