Image courtesy of Clean Air Fund

TL;DR — Last month the Clean Air Fund published their fifth annual State of Global Air Quality Funding report, the most comprehensive resource available on the financial support available to address air pollution around the world. The report highlights important trends and gaps in global aid and public climate finance resources made available for improving air quality between 2015 and 2021 — as well as sharing some key takeaways for governments, bilateral donors, and multilateral development banks to jointly combat both air pollution and climate change. We at Clarity believe that the Clean Air Fund plays an essential role in combating the global air pollution crisis — here is our take on their 2023 State of Global Air Quality Funding report.

The State of Global Air Quality Funding report

Clean Air Fund, an organization taking a philanthropic approach to tackling global air pollution, released their report entitled “The State of Global Air Quality Funding 2023” in September that outlines an analysis of funding from international development donors to tackle air pollution.

The report combines an analysis of existing trends and gaps in air quality funding along with recommendations for donors to more effectively combat air pollution.

We at Clarity would like to thank Clean Air Fund for doing this important research and helping to build a strong foundation of data-driven air quality information that helps drive clean air action and policy change.

Finding #1: Insufficient funding concentrated among few donors

One key finding from Clean Air Fund’s report is that air quality funding remains at insufficient levels to adequately tackle the global air pollution crisis.

The report found that only 1% of international development funding and 2% of international public climate finance went towards air pollution control over the last 6 years. However, research from the US EPA demonstrates a significant economic benefit from investment into air pollution control at a ratio of $30 in economic benefit for every $1 spent.

Thus, it is clear that there is a greater need — and an economic case for — increased investment in air pollution control.

Just 0.7% of international development funding went towards air quality between 2015 and 2021, underlining a clear lack of funding for air quality projects and a greater need for increased financial resources to support clean air action. (Image source: Clean Air Fund)

Interestingly, funding also remains concentrated between only a few donors, with just 10 donors providing 97% of the total outdoor air quality funding in the last 5 years. The Clean Air Fund links this finding to a lack of widespread engagement in air quality issues, especially considering the scale of this global crisis.

Finding #2: Air quality funding has overtaken fossil fuel financing for the first time

Clean Air Fund noted that in 2021, international development funding for outdoor air quality projects reached $2.3 billion, exceeding for the first time the $1.5 billion in funding for fossil fuel-prolonging projects, which started to decline beginning in 2019. 

2021 was the first year in which outdoor air quality funding exceeded funding for projects like oil and fossil gas extraction and production which prolong the use of harmful fossil fuels. (Image source: Clean Air Fund)

This is an exciting finding because it suggests that there is growing interest and momentum in phasing out widespread fossil fuel use and decreasing international public finance for fossil fuels. While it is important to note that fossil fuels still receive enormous amounts of funding from other sources such as government subsidies and tax incentives,  reducing economic handouts to this already-profitable industry from international development funding is one important step in phasing out fossil fuel use completely and transitioning to cleaner sources of energy.

Finding #3: Untapped opportunities in terms of climate finance and financial instruments

Despite the progress in action towards mitigating the air pollution and climate crises, only 2% of international public climate finance explicitly goes towards outdoor air pollution — meaning there is still a lot of progress to be made.

It is essential to understand the relationship between air quality and climate change, and track the air quality co-benefits of climate action, in order to fully tackle both crises. To learn more about these co-benefits and how they help drive action towards a healthier environment, read our blog here.

Monitoring local air quality benefits – particularly in relation to health – can help to deliver a more comprehensive understanding of the effects of global climate interventions, allowing for more informed decision-making and resource prioritisation”

— Clean Air Fund

Harnessing certain financial instruments like green bonds, social bonds, and results-based funding helps share the financial risk of investment between governments, international development funders, and private investors — therefore helping to mobilize long-term investment into air quality projects.

When it comes to leveraging these investments in clean air, it is important to take into account the secondary benefits that come with reducing air pollution, from decreased public health costs to improved crop yields. Read our blog on the ripple effect of benefits that come from mitigating air pollution here.

Finding #4: Loans prioritized over grants

The Clean Air Fund finds that, in existing air quality funding, loans are highly prioritized over grants — in fact, 92% of funding was provided in the form of loans during the period analyzed.

About 41% of these loans are low-cost concessional loans, meaning they have more generous loan terms such as below-market interest rates. These types of loans are particularly important for economically developing countries who may already be burdened with higher debt, ensuring that they can also access funding for air quality improvement.

The other 8% of air quality funding came from grants, 93% of which were from governments —  such as the US EPA’s grant funding for Environmental Justice air quality monitoring projects. The report highlights that, because action to reduce air pollution is ultimately a public good, grants play a highly important role in catalyzing action. Grants also help funding recipients in taking action without worsening debt positions as well as by providing local authorities with more choice in exactly how the money is invested.

Because air pollution is an issue that affects us across the globe, it is not one that can be solved in isolation. Read our blog here to learn more about why it is important for different levels of government to cooperate to improve air quality.

Finding #5: Inequities in air quality funding

The report highlights that certain parts of the world — particularly Africa, Latin America, and some parts of Asia — are being left behind when it comes to clean air funding.

In Asia, 86% of air quality funding went to 5 countries — China, Philippines, Bangladesh, Mongolia, and Pakistan — while other countries with dangerous levels of air pollution were overlooked.

In Africa and Latin America, air quality funding is largely lacking, despite many countries in these regions suffering from poor air quality.

African countries only receive only 5% (or $0.76 billion) of all air quality funding between 2017 and 2021. The continent is home to half of the world’s top ten countries with the highest levels of air pollution”

— Clean Air Fund

Just 1% of air quality funding from 2017 to 2021 went to Latin America and the Caribbean.

Adequate air quality funding is an essential part of establishing resilient monitoring networks and creating sustainable positive change. Read our blog here to learn more about how low-cost sensors can empower economically developing nations to improve their air quality monitoring infrastructure

Though there is a more widespread recognition of the need for air quality funding and the harm that air pollution brings, the distribution of available funding is still largely inequitable. According to Clean Air Fund’s data from 2017 to 2021, a large portion of funding went to just a few countries, like China and the Philippines, while other Asian countries along with the regions of Africa and Latin America went without adequate funding. (Image source: Clean Air Fund)

A global snapshot of air quality funding

Clean Air Fund’s State of Global Air Quality Funding report makes an important contribution to our understanding of funding for air quality projects around the globe and helps to highlight areas for improvement as we continue to fight against air pollution.

Interested in measuring air quality for cleaner air and a healthier climate? Get in touch with our team to learn more about our Sensing-as-a-Service solution for governments, businesses, and community organizations, using our Clarity Node-S monitors and Modules.