UK aid budget cuts threaten climate finance pledge to vulnerable nations, experts warn

The UK government has announced a reduction in its overseas aid budget, a move analysts warn will make it harder to fulfill its climate finance commitments to developing nations.

On Tuesday, Prime Minister Keir Starmer revealed plans to cut the aid budget from 0.5% to 0.3% of national income, stating that this would allow the UK to increase defense spending by £13.4 billion per year from 2027.

The UK’s climate finance commitments are funded through its aid budget, which had already been reduced from 0.7% to 0.5% in 2021, just before the COP26 climate summit in Glasgow.

Starmer is scheduled to travel to Washington on Thursday for a meeting with US President Donald Trump, who has been urging European nations to take on more responsibility for their own defense budgets.

International Aid Community in Shock

The decision has stunned the global development community, which is already grappling with Trump’s freeze on USAID spending and significant aid cuts by Germany, Sweden, France, Belgium, and the Netherlands.

“A Catastrophic Blow” to Vulnerable Nations

International charities and aid organizations have strongly criticized the decision, calling it “a betrayal,” “short-sighted,” and “a catastrophic blow” that will worsen conditions in some of the world’s most vulnerable countries.

With climate change impacts, humanitarian crises, and global instability on the rise, experts argue that stronger international cooperation is needed rather than a retreat from commitments.

“At a time when we’ve just had the hottest January on record and humanitarian crises are at an all-time high, the UK government’s decision to slash its aid budget is deeply shameful,” said Teresa Anderson of ActionAid International.

Tom Mitchell, Executive Director of the International Institute for Environment and Development (IIED), urged Starmer to look at alternative funding sources:

“Before cutting an already strained aid system that supports the world’s most vulnerable, the UK should first eliminate harmful fossil fuel subsidies.”

Climate Finance in Jeopardy?

The UK has pledged £11.6 billion ($14.7 billion) in climate finance for developing countries between 2021 and 2026. However, a report from the UK’s Independent Commission for Aid Impact warned that over half of the funding is set to be allocated in the final two years, making it difficult to meet the target—especially under a shrinking aid budget.

While Starmer’s Labour government insists it remains committed to the pledge, experts fear climate finance could be at risk.

“Without clear assurances, climate finance could be on the chopping block,” said Laetitia Pettinotti of ODI Global.
“Sweeping cuts without transparency are what we expect from Trump and Musk—Starmer needs to provide clarity.”

Critical Climate Goals Under Threat

Wealthy nations, including the UK, are under pressure to increase climate finance contributions to help developing countries cut emissions and adapt to climate change.

At the COP29 climate summit in Azerbaijan, developed nations agreed to triple climate finance to $300 billion annually by 2035. However, the UK’s decision to shrink its aid budget could make fulfilling its share of this commitment even harder.

“For struggling communities, this decision could be a matter of life and death,” said Gareth Redmond-King of the UK’s Energy and Climate Intelligence Unit (ECIU).
“Instead of increasing climate finance, the UK has just reduced the budget that funds it.”

With crucial climate talks set to take place in Brazil in November, where nations will review their progress toward global climate goals, experts had anticipated new finance commitments from wealthy nations.

“Rich countries were expected to announce increased climate finance to build trust with developing nations,” said Clare Shakya of The Nature Conservancy.
“If we fail to peak emissions near 1.5°C and halt biodiversity loss, we will face even greater security challenges. The timing of this decision could not be worse.”

Starmer Defends the Decision

Speaking to UK lawmakers, Starmer acknowledged that the decision involved “extremely difficult and painful choices.”

“This is not a decision I wanted to take or am happy to take,” he said. “We will do everything we can to return to a world where this is not necessary and to rebuild our development capabilities.”

He assured that the UK would continue providing humanitarian aid in Sudan, Ukraine, Gaza, and other crisis regions while maintaining its efforts to tackle climate change.