Rich Nations Profit From Climate Loans, Burdening Global South

Oxfam and CARE Climate Justice Centre argue that wealthy nations are profiteering through climate finance loans.

New research by Oxfam and the CARE Climate Justice Centre finds that developing countries are now paying more back to wealthy nations for climate finance loans than they receive—for every USD 5 they receive, they are paying USD 7 back. Around 65 percent of funding is delivered in the form of loans.

This form of crisis profiteering by rich countries is worsening debt burdens and hindering climate action. Deep cuts to foreign aid threaten to slash climate finance further, leaving the world’s poorest communities exposed to escalating climate disasters.

Key Findings of the Report:

Rich countries pledged USD 116 billion in climate finance in 2022, but only around USD 28–35 billion was delivered, less than a third of the pledged amount.

Nearly two-thirds of climate finance was made as loans, often at standard interest rates without concessions. As a result, developing countries’ debt now stands at approximately USD 3.3 trillion. Countries such as France, Japan, and Italy are among the worst offenders.

Least Developed Countries received only 19.5 percent, and Small Island Developing States only 2.9 percent of total public climate finance over 2021–2022, much of it in repayable loans.

Developed nations are profiting from these loans. In 2022, developing countries received USD 62 billion in climate loans, projected to lead to repayments of up to USD 88 billion, a 42 percent profit for creditors.

Only 3 percent of climate finance targets gender equality, despite women and girls being disproportionately affected by climate change.

“Rich countries are treating the climate crisis as a business opportunity, not a moral obligation,” said Oxfam’s Climate Policy Lead, Nafkote Dabi. “They are lending money to the very people they have historically harmed, trapping vulnerable nations in a cycle of debt. This is a form of crisis profiteering.”

Aid Cuts and Impact

This crisis is compounded by the most severe foreign aid cuts since the 1960s, with a 9 percent drop in 2024 and projections for a further 9–17 percent cut in 2025.

Fossil fuel-driven climate disasters continue to intensify, displacing millions in the Horn of Africa, affecting 13 million in the Philippines, and flooding 600,000 people in Brazil in 2024 alone. Communities in low-income countries are left with fewer resources to adapt to these shocks.

“Rich countries are failing on climate finance and have no plan to meet their commitments,” said John Norbo, Senior Climate Advisor at CARE Denmark. “COP30 must deliver justice, not another round of empty promises.”

Calls to Action Ahead of COP30

Oxfam and CARE urge wealthy nations to:

Fulfil climate finance pledges: Deliver the full USD 600 billion for 2020–2025 and scale up to USD 300 billion annually.

Stop crisis profiteering: Increase grants and highly concessional finance to reduce debt burdens.

Multiply adaptation funding: Commit to at least triple adaptation finance by 2030.

Finance loss and damage: Ensure the Global Fund for Responding to Loss and Damage is adequately capitalized.

Mobilize new sources: Tax the super-rich and fossil fuel company profits to raise funds for climate action.

The CARE Climate Justice Centre leads the integration of climate justice and resilience across CARE International’s development and humanitarian programs.

A global survey by Oxfam International and Greenpeace shows 8 out of 10 people support paying for climate action through taxing the super-rich. The survey, conducted in May–June 2025, covered 18 countries with approximately 1,200 respondents per country.