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Air pollution is universal health problem – 99% of the world’s population breathes air that exceeds World Health Organization air quality guidelines. Approximately 4.5 million people die every year as a result.

At the same time, cleaning the air can be a massive opportunity. Because both air pollution and climate change are mainly caused by burning fossil fuels, they can be tackled together. Toxic air disproportionately affects the most vulnerable, so addressing it will also help reduce inequality. And because it massively hampers workforce productivity, initiatives which clean the air also serve to boost sustainable economic development.

By tackling these problems in isolation, funders, policymakers and other key players drastically overlook the potential of clean air to deliver benefits across the board. Ultimately, this tunnel vision is costing lives, hampering our climate efforts, stifling sustainable development and wasting aid money. 

Published each year by the Clean Air Fund, this report provides the only global snapshot of projects funded by donor governments and philanthropic organizations to tackle air pollution. Its purpose is to identify gaps in funding and opportunities for strategic investment and collaboration which will deliver clean air for all. It covers things like commitments made by each type of funder to date, trends over time, geographical distribution and methods of funding.

In just one example of the scale of the opportunity we are missing, it finds that between 2015 and 2020 air pollution projects accounted for just 0.5% of total international development funding and less than 0.1% of philanthropic foundation funding. Given the damage we know air pollution does to our health, economies and environment, there is no sound financial or political argument for this underinvestment. We urgently need to significantly increase direct funding to tackle air pollution in its own right.

Figure-2.2

Accounting for air pollution impacts will also lead to better decisions in other key areas. Broadly speaking, when you factor in the benefits of cleaner air gained from climate actions, and vice versa, you strengthen the case for good solutions which presently lack funding or political support. That is why, as the world prepares for COP27 in Egypt, this research looks closely at funding that tackles both air quality and climate change together. Not only does this deliver synergies and efficiencies, air quality benefits provide quick, concrete wins which build public support for more climate action.

Our analysis finds that a tiny portion – roughly 2% – of international public climate finance explicitly tackles air pollution. While this is alarming right now, it also points to scope for significant quick wins if we can join forces and tackle these challenges as two sides of the same coin.

We are not there yet. Perversely, this research shows that several times more development funding is going to prolonging fossil fuel use than fighting air pollution. As the consequences of the climate crisis grow starker, this appears to be an exceptionally poor use of aid money. It urgently needs to change if we are to achieve the targets of the Paris Agreement or a host of the Sustainable Development Goals.

Figure-3.7

Africa provides many of the starkest examples of this short-sighted and potentially counterproductive approach. Governments, banks and donor agencies committed 36 times more money to fossil fuel-prolonging projects in Africa than clean air measures in 2015-2021. Again, the findings also show what is possible if we shift our approach quickly and strategically and succeed in stopping air pollution from spiralling further as urbanization and industrialization on the continent increase at pace.

Realizing the potential of clean air to unlock solutions to some of our greatest challenges will not happen overnight or by itself. It will require coordination, collaboration and a willingness to take bold actions together. But there can be no doubt it will be worth it. More money, better spent, really can buy clean air. Governments and funders must act fast, starting with COP27 in Egypt later this year.

Key findings

International development funders

Between 2015-2021, international development funders committed $11 billion (around $1.5 billion per year) to projects that purposely work to improve outdoor air quality. This accounted, on average, for just 0.5% of total international development funding, which totalled $1.9 trillion in 2015-2020 (or $324 billion per year).

More specifically:

  • Grant funding, which is much needed to avoid saddling low-income countries with more loan debt, represented only 6% of total air quality commitments.
  • Air quality funding was concentrated in a handful of Asian countries, while in regions such as Africa and Latin America it lagged behind.
  • $7.6 billion of air quality funding (72%) simultaneously addressed climate change, largely via mitigation projects in the transport and energy sectors.
  • Just 2.2% of international public climate finance – the share of international development funding contributing to the goals of the Paris agreement – explicitly tackles air pollution. This small proportion indicates that climate finance is a large untapped source of funding for the clean air agenda.
  • Between 2015-2021, $46.6 billion was committed by international development funders to projects that prolonged the use of fossil fuels, more than four times the amount dedicated to air quality projects in the same period.

Philanthropic foundations

In 2021, total air quality funding by philanthropic foundations rose by 36% to an all-time high of $63.8 million but remains less than 0.1% of total philanthropic foundation spending.

More specifically:

  • The substantial jump between 2020 and 2021 was partly driven by a small number of large grants, indicating an increased interest in air quality from big foundations and a shift in funding practices.
  • The number of grantees receiving air quality finance continued to grow, reaching an all-time high in 2021.
  • The US, China and India continued to receive the bulk of philanthropic foundation funding for air quality, while Africa, Latin America and the rest of Asia lagged behind.
  • The majority of philanthropic foundation spending on air quality continues to come from foundations working on climate, environment or energy (CEE), though foundations focused on health, social justice and childhood development are increasingly engaging with the clean air agenda.
  • The majority of foundation-funded air quality projects are simultaneously aiming to tackle climate change, however, just 2% of total foundation climate mitigation funding is realizing the health and economic benefits associated with improved air quality.

Recommendations

To accelerate action to curb the growing threat of global air pollution, we recommend the following actions by funders to increase the volume of funding for air quality, heighten its impacts, and build a stronger ecosystem for clean air action.

All funders should:

  1. Significantly increase explicitly designated air quality funding, including within climate action and sustainable development programs, demonstrating political urgency. Despite the short and long term benefits, not enough priority is given to integrating action on air quality, health and climate. Convening a global annual air quality stocktake – that would celebrate improvements, highlight shortcomings and offer support to countries – could galvanise momentum behind the clean air agenda and facilitate better coordination among donors to avoid duplicating efforts.
  2. Drive joined-up action on integrating air quality and climate into public and private investments and expenditure, including improving cooperation and coordination within government administrations, and with other stakeholders. Air pollution and climate action should be addressed via integrated approaches that consider synergies between complementary policy goals as well as potential negative trade-offs that would worsen air quality or slow climate action. Better accounting for climate finance with air quality co-benefits will allow funders to track and measure progress towards overlapping goals and increase the impact of their funding.
  3. Prioritize investment in air quality data programs that make information and analysis publicly available, accessible and relevant. Data on air quality and the sources of local pollution are essential for identifying and managing effective, contextually-appropriate solutions. There is also opportunity to harmonise greenhouse gas emissions estimation methodologies with, and alongside, air pollution inventories to further joined-up action.
  4. Target air quality funding to underserved regions. Africa, Latin America and some regions in Asia consistently lag behind as recipients of funding from both philanthropic and development funders. By working together to understand and address funding gaps, funders can intervene early to reduce inequalities in access to clean air, prevent the problem getting exponentially worse, and achieve air pollution and climate benefits for almost half of the world’s population.

International development funders should:

  1. Develop and coordinate a global donor strategy – spearheaded by champion governments – that aims to increase spending effectiveness and leverage from international public finance in reducing global air pollution. This means:
    • A marked uplift in the scale of air quality spending worldwide, including efficiencies made by having a more joined-up approach with climate action and integration into infrastructure and service investments.
    • Systematically capturing and communicating the health, environmental and development benefits of air quality expenditure to build awareness of it as a unique investment and impact opportunity.
    • Actively seek a wider geographic spread in clean air investment portfolios.
    • Using innovative financial instruments such as outcome based finance, guarantees and de-risking for eligible projects, to catalyse further investment in the clean air space.
    • Committing to improve reporting of development funding of air quality to help better coordinate development activities, especially where funding comes from multiple government departments or agencies.
  2. Increase the volume of grant-based funding to tackle the inequitable air pollution-related disease burden in low- and middle-income countries. The majority of air quality funding is provided in the form of loans, which may aggravate the growing debt burden in low- and middle-income countries. Increasing the grant component of air pollution development assistance can help kickstart pollution-reducing projects in countries with limited public resources, and help to address the disproportionate air pollution-related disease burden they face.
  3. Phase-out all new investments in fossil fuel-prolonging activities while significantly upscaling investments in new clean technology and energy. Despite increased political momentum to phase out fossil fuels, development funding to fossil fuel-prolonging projects still outpaces air quality funding fourfold, jeopardizing the clean air agenda, global climate goals, and development objectives more generally. Fossil fuel funding should be in exceptional cases only and should diminish swiftly, with the priority placed on investing in a just, clean transition.

Philanthropic foundations should:

  1. Invest more in improving ambient air pollution for better public health, childhood development, social justice, sustainable cities and climate outcomes. Different types of funders can increase their engagement with the issue in different ways:
    • Climate, energy and environment funders should integrate air quality considerations and evaluations into a larger proportion of their work, uncovering previously unrealized health and economic impacts and simultaneously strengthening an additional push for reduced emissions.
    • Funders working on health, early childhood development and cities and mobility, should accelerate air quality funding or start to fund such projects, focusing on synergistic areas e.g., improving air quality around schools.
    • There is a need for funders with specialist air quality programmes of work – especially those working on health, childhood development, equity, climate and urban design – to help build clean air expertise, capacity and collaborations through their funding to advance progress.
  2. Funders making ‘big bets’ on structural solutions to complex problems should both (i) consider air pollution as a worthy standalone area for investment that can achieve transformative impact; and (ii) deeply integrate air quality into project design and evaluation if the work covers key parallel topics such as fossil fuel use, non-communicable diseases and early childhood development.
  3. Consider how their grant funding can be used to develop ‘proof of concept’ projects to help leverage investments from other funder types. Philanthropic foundations are able to pilot and innovate with more flexibility and tolerate higher levels of risk than development funders. As such, their funding can act as a stimulus, building localised cases for larger investments.
  4. Collaborate, pool funds and share learning and best practices to ensure existing and new funders achieve maximum impact. The number and breadth of foundations making air quality grants is rising year-on-year, including very large funders making grants on the issue for the first time in 2021. Coordination and knowledge sharing between existing and new funders is needed to ensure maximum impact.
  5. Apply a social justice and equity lens to air quality grant making to ensure that actions to improve ambient air quality are actively reducing the health and social disparities associated with air pollution, not maintaining or worsening them.

Download the full report here

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