By Bunmi Yekini
As world leaders prepare for COP29, a sobering new report from ActionAid International has shed light on a growing crisis in the Global South: over $600 billion of public funds are being funneled annually into climate-destructive fossil fuel and industrial agriculture subsidies. This staggering sum, meant to support sustainable development and climate adaptation, is instead being used to prop up industries that exacerbate environmental degradation, leaving already vulnerable communities to face the consequences.
The report, How the Finance Flows: Corporate Capture of Public Finance Fuelling the Climate Crisis in the Global South, uncovers a deeply concerning financial imbalance. While Global South nations allocate an average of $677 billion each year to subsidize fossil fuel and industrial agriculture sectors, they receive only a fraction of what is needed to combat climate change effectively. Climate finance from wealthier nations, which is meant to help developing countries tackle the climate crisis, amounts to a mere 1/20th of what is required.
Arthur Larok, Secretary General of ActionAid International, highlighted the dire impact of this financial disparity. “This report reveals the true cost of corporate greed,” Larok stated. “Wealthy corporations are draining the lifeblood of the Global South, diverting public funds that should be used to address the climate crisis and pushing these nations deeper into crisis. It’s an unsustainable situation that not only damages the environment but also entrenches poverty.”
The ActionAid report draws attention to the outsized role that fossil fuel and industrial agriculture industries play in this financial drain. Between 2016 and 2023, fossil fuel sectors in the Global South have received an average of $438.6 billion annually in public subsidies, while industrial agriculture has benefited from an additional $238 billion each year. Meanwhile, renewable energy initiatives, which are vital for reducing emissions and transitioning to a more sustainable future, receive 40 times less public finance than fossil fuels.
Despite these staggering figures, the communities directly impacted by this financial mismanagement are often the ones suffering the most. In Delta state, one of the states in the South South region of Nigeria, where oil drilling has ravaged local ecosystems, the consequences of these misplaced subsidies are felt every day. Helen, a fisherwoman in her fifties from the community of Ophorigbala, recalls a time when fishing was a flourishing business in her village. “In the past, when I came out to fish, I would catch many big fish,” she says, her voice tinged with both pride and sorrow. “There were so many fishermen and women here, and fishing was a booming business. We could sell our fish to other communities, and it sustained us. But now, I’ve set my net since morning and I haven’t caught a single fish.”
Photo Credit: ActionAid International
Helen’s community, once a bustling commercial fishing hub, has seen its rivers polluted and its farmlands rendered infertile due to the environmental impacts of oil extraction. “It makes me sad when I inspect my net and find it empty,” Helen laments. “The river is no longer productive, and the land can’t support farming anymore. It’s frustrating and heartbreaking. We’ve lost our way of life.”
Activists like Jonah Gbembre, also from Delta State, are raising their voices against the corporations that have devastated their communities while benefiting from billions in public subsidies. “Our rivers are polluted, our fish are gone, and our communities are suffering,” Gbembre said. “We can’t continue to support companies like Shell that devastate our environment. Our taxes should be invested in clean energy solutions that protect our people and future.”
The ActionAid report comes at a critical moment, with COP29 fast approaching. Teresa Anderson, Global Lead on Climate Justice at ActionAid and one of the report’s authors, warned that time is running out to address the growing climate and financial crises. “It seems money is the root of all climate upheaval,” Anderson said. “Climate-destructive industries are bleeding the Global South dry. With COP29 on the horizon, it is imperative that we shift finance towards sustainable solutions and hold corporations accountable for their role in this crisis.”
The report urges immediate action, calling for a significant reallocation of public funds to support renewable energy and sustainable agriculture in the Global South. It highlights the need for wealthy nations to meet their climate finance promises and commit to more ambitious goals at COP29. These commitments must reflect the scale of the challenge faced by developing countries on the front lines of the climate crisis. “We can no longer afford to allow the Global South to be locked into harmful development pathways that destroy ecosystems, grab lands, and compound the injustice of climate change,” Anderson stressed.
As global leaders prepare to gather for COP29, the ActionAid report serves as a stark reminder of the human cost of inaction. The billions being poured into fossil fuels and industrial agriculture are not just numbers on a balance sheet, they represent the lost livelihoods, polluted rivers, and devastated communities in countries like Nigeria, where people like Helen are left to navigate the wreckage of environmental destruction.
“There was a time when the river gave us life,” Helen reflects. “Now, it takes everything away. We can’t continue like this. The government needs to stop supporting the companies that are killing our land and invest in energy that will help us, not harm us.”
The report makes clear that the window for meaningful climate action is closing, but it also offers hope: with a reimagined approach to public finance, and a shift towards sustainable, people-centered solutions, the future of the Global South could still be salvaged. At COP29, the world’s leaders will have a chance to correct the course, and whether they choose to do so will determine the fate of millions across the Global South.
Source: ActionAid International