China as a Provider of International Climate Finance

This paper quantifies and evaluates China's bilateral, regional, and multilateral climate-related development finance from the Belt and Road Initiative's inception in 2013 until 2021, shedding light on its substantial but often opaque contributions. Our analysis suggests that China has provided an annual average of nearly $4 billion for climate to developing countries since 2013, totalling over $34 billion by 2021, primarily through bilateral channels through lending from its policy banks. Recently, China's climate finance through multilateral institutions has substantially increased. However, this increase has been coupled with declines in China’s bilateral climate-relevant finance, which fell from over $6 billion in 2017 to under $1 billion in 2021, outpacing the decline of China’s overall development finance. Separately, we find China has made significant ongoing fossil fuel investments in developing countries, amounting to over double its climate-relevant finance over the period. Since 2017, the Chinese government has made commitments to “green” its outward cooperation, and outbound fossil fuel finance fell below climate-related finance for the first time in 2021. Although China remains a “developing” country and recipient of climate finance, it is now a net provider of climate support, suggesting it is already positioned to contribute to a new UN climate finance goal to be agreed for beyond 2025. Overall, this paper seeks to contribute to debates on China’s role in the international climate finance architecture and emphasizes the potential for other development actors to further engage China in multilateral climate cooperation.