Key points
- Southeast Asia is a key partner for both China and Australia. China’s voluntary climate finance to the region was around ten times Australia’s USD 1.2 billion in obligatory funding.
- Based on the NDCs of ASEAN countries, Australia should provide around USD 5.4 billion of climate finance to Southeast Asia by 2030. So far, it has delivered less than a quarter of its expected bilateral finance to Southeast Asia.
- At COP30, talks will likely focus on the New Quantitative Finance Goal, where developing countries, including Australia, must provide at least USD 300 billion in climate finance annually to developing countries.
China outpaces Australia in ASEAN climate finance
Southeast Asia is one of the fastest-growing and climate vulnerable regions, where climate finance is a crucial mechanism in supporting decarbonisation and adaptation.
China delivered around USD 12 billion in bilateral climate finance to Southeast Asia between 2012 and 2021, 10 times Australia’s USD 1.2 billion over the same period. The gap underscores China’s growing influence in the Association of Southeast Asian Nations (ASEAN), a bloc that is the largest trading partner for China and second largest trading partner for Australia.
Our new analysis, based on OECD and WRI data, looks at climate finance flows to Malaysia, Indonesia, Laos, Cambodia, Vietnam, the Philippines, Timor-Leste, Myanmar and Thailand. It shows the efforts of Australia’s new government to increase its climate finance support to these key regional partners in recent years, such as a USD 2 billion investment fund.
Australia should provide around USD 5.4 billion of climate finance to Southeast Asia by 2030, based on the Nationally Determined Contributions (NDCs) of ASEAN countries – the national climate action plans submitted by governments to the UN (see Methodology below). So far, it has delivered less than a quarter of its expected bilateral climate finance to Southeast Asia’s decarbonisation efforts.
Australia provided most climate finance to Indonesia (USD 585 million), while China provided most climate finance to Malaysia (USD 5 billion) followed by Indonesia (USD 4 billion), between 2012 and 2021.
Why is this important now?
As a UNFCCC Annex II country, Australia is required to contribute to the delivery of at least USD 300 billion annually by 2035 in climate finance, as agreed in the new collective quantified goal (NCQG) at COP29 last year.
Developed nations committed to take the lead by providing finance for developing countries’ climate action. China, though not obliged, provided around USD 4.5 billion of climate finance per year from 2013 to 2022 – equivalent to 6.1% of the total amount given by developed countries across the same period, according to the WRI. Amid debate over expanding the number of required donors to the climate finance goal, China has confirmed its contributions will remain voluntary.
This discussion is now urgent – talks ahead of COP30 are focusing on two things: how to raise the NCQG’s more ambitious target of USD 1.3 trillion per year from a wider set of climate finance sources, and how much is needed by developing countries (excluding China) to supplement their domestic resources to adequately provide for the energy transition, adaptation measures, and responses to loss and damage.
Methodology
Datasets
This analysis uses historical climate finance to Southeast Asia between 2012 and 2021 from
- China: WRI 2024, China’s International Climate-Related Finance Provision and Mobilization for South-South Cooperation
- Australia: OECD 2022, Climate-related development finance datasets, donor perspective
Australia’s attributed bilateral finance requirement to meet ASEAN NDCs by 2030 is estimated by taking:
- the UNFCCC calculation of the volume of climate finance needed for Southeast Asia, as determined from NDCs, as USD 422.16 billion up to 2030;
- the multi-year average, post-Paris contribution of bilateral public finance to total climate finance from developed to developing countries as 37% from 2017 to 2022, according to the OECD; and
- the WRI’s climate finance calculator result (with donor base set to UNFCCC Annex II countries) giving Australia’s bilateral share of Southeast Asia’s climate finance, normalising for historical emissions and economy size.
