This post was revised and edited on 1st February 2025 and 1st July 2025.
It has been said that there is little money to finance low carbon climate resilient biodiversity positive heath systems [1].
Health systems can fall through gaps in general climate financing, while climate falls through similar gaps in traditional healthcare financing.
However, there may be more finance than first thought.
If we think widely about this word finance, it can mean:
- Grants – from philanthropies, global health development donors, or crowdfunding.
- On-budget – from an organisation’s own budget.
- User fees – from individuals or pooled through health insurance funds.
- Debt – through soft or hard loans from regional development banks, international health donors, commercial short and long term credit like bonds or even some forms of crowdfunding.
- Equity – through commercial private enterprises.
Undoubtedly there are many other sources I haven’t touched on.
When thinking about these diverse sources money the first thing that you notice is – there’s lots of it.
So, the problem may not be lack of money.
Rather there might be too much money. And the way the money is offered can be complicated for healthcare.
It can be difficult to imagine how a particular type of money can be put to work for the ultimate benefit of local healthcare. It can also be difficult to access and influence the flow of such money through health systems in low resourced East Asia and the Pacific.
This post zooms out and takes a landscape view of climate financing available for health.
Global Finance for Climate Change
To start, let’s take a quick look at how global climate finance is structured.
High income countries contribute funds for bilateral or multilateral aid that are directed to low income countries. Bilateral aid can be funnelled through country aid agencies or into contributor initiatives like the Mitigation Action Facility. Some countries in East Asia have their own nationally administered trust funds which accepts bilateral finance from other countries, like Indonesia.
Money from different countries also comes through United Nations Framework Convention on Climate Change (UNFCCC) – this includes the Global Environment Facility, the Green Climate Fund, and the Adaptation Fund. These are referred to as ‘the global climate funds’. The types of money available through these UNFCC mechanisms vary: from grants and concessional loans, to guarantees and private equity. Each mechanism has its own reporting and verification processes making accounting for actual climate finance problematic. However, it’s worth noting that climate finance channelled through UNFCCC mechanisms accounted for only 10% of total climate financing in 2019–2020 [2].
To date of this post, health organizations were largely absent from the list of institutions that have been accredited to access the global climate funds.
Climate finance from the public sector – meaning all money both domestic and international as reported under to the UNFCCC in 2019/2020 – averaged US$803 billion across the globe. This money focused on mitigation actions for buildings, infrastructure, and sustainable transport [3]. Mitigation finance – reducing the pollution footprint in different sectors of the economy – represented 57% of the total money for climate change, mainly in the form of loans.
Adaptation finance through bilateral, regional and other channels, represented 43% of all climate finance and mainly given as grants. Much less finance was cross-cutting (both mitigation and adaptation), at 14% of the total [3].
Climate finance directed from higher income towards lower income countries was an estimated US$40.1 billion in 2019/2020. Most climate-specific finance (79%) moved through bilateral, regional and other channels. Multilateral Development Banks (MDBs) were the largest provider of climate finance to emerging and developing economies. Asia received the most climate finance of any world region, at 36% of total climate finance provided [3].
A more recent report suggested that the pool of climate finance from high income countries for low income countries is becoming limited. Increased funding for climate change initiatives may be redirecting existing financial commitments for poverty reduction, health, and education [4].
CARE has estimated that of all reported climate finance flows, only 6% are new and additional money [4].
Where is health in all of this?
Health
At last count, total global climate finance was about US$8billion.
Total global finance in healthcare (all flows), was an estimated US$8 trillion mostly from domestic government financing.
By itself, health sectors around the world are moving far more money than is flowing through climate finance.
In other words, globally health systems have a LOT of money. Health systems and their health-related organisations anchor local and regional economies.
The global finance architecture for global health is similar to climate finance. The key global health players are bilateral country donors, multilateral organisations, and philanthropy.
Trends in bilateral aid have lately favoured directly-contracted health programs over budget support. Bilateral aid has become part of international diplomatic relations in which health aid becomes the responsibility of Ministries of Foreign Affairs [5].
China has become a significant bilateral donor for energy and infrastructure though not for health. The Lowy Institute reported a relatively small amount of US$643 million from China to Southeast Asia specifically for health between 2015 and 2021 [6].
Multilateral actions for health area similar to climate finance. The key players are the UN family. And global platforms of pooled funds or “Global Health Initiatives” [5] such as the Global Fund to Fight AIDS, TB and Malaria; GAVI the Vaccines Alliance, and the Global Financing Facility for Women, Children and Adolescents. These Global Health Initiatives are funded by bilateral donors with an increasing trend for contributions from private philanthropic foundations.
MDBs are also active in health including the World Bank’s International Development Association, an important grant maker to Least Developed Countries. Regional MDBs such as Asian Development Bank as well as World Bank’s International Bank for Reconstruction and Development makes loans for development that includes actions on health [5].
The international architectures for health finance and climate finance are similar and many of the same organisations play a role in both. However, there is little cross over so health finance and climate finance tend to work as silos.
This makes climate finance for health systems rather like an ‘undiscovered country’ – an open opportunity for local health systems to articulate, advocate, and drive what climate resilient nature positive health systems can mean at the grassroots for communities and primary healthcare across the region.
This is the international context that low resourced countries operate in and ultimately have little influence over.
How about money for climate and health nationally or locally?
Grants
When the phrase climate finance is tossed into a conversation, there is an assumption that it means grants.
Grants are a huge topic and there are numerous grants available for climate and for health. Grants have the advantage of not having to be paid back but also have their own costs and constraints.
Climate grants can be more flexible than health grants, but climate grant-makers have, to date, put little strategic emphasis on channelling climate finance through the health sector. Healthcare and health systems have not therefore been able to access climate funding in the same way that agriculture and water sectors, for instance, have done. At the same time, multilateral health grant-makers have only recently included climate change in their strategies and policies [7].
A positive development was a new partnership between the COP28 presidency, the Rockefeller Foundation, the WHO, Global Fund, and the Green Climate Fund who seek to increase funding, and evidence base, for climate+health interventions [8].
There’s a recurring word in climate change grant applications.
Pipelines.
- “create investable pipelines of projects…”
- “translat(e) strategies into tangible investment programmes and project pipelines”.
- “leverage … national and regional financial institutions to build out the pipeline needed…”
- “build country demand and project pipelines of fundable and impactful synergistic programs…”
- “develop a stronger pipeline of proposals that target health…”
- “greater demand from countries for more synergistic or cross-sectoral funding, paired with a more well-developed project pipeline of synergistic and multi-sector projects…” [all references from 7,9]
In other words, it’s not about seeking grants in isolation, rather the emphasis from global grant makers is on collaboration between organisations for activities that build, through a coherent pipeline, towards the desired outcome of zero pollution, climate resilient and nature positive health systems.
On Budget
On-budget here means existing funds that an organisation has – whether the organisation in question is a government department, a charity, a commercial company, or an international organisation. All of these organisations have an existing budget to support its operations. In a sense, the total budget of an organisation can be thought of as ‘funds under management’ without looking for additional money through debts, grants, or any other type of money.
On-budget means working with the money that you have now. These funds are a source of financing for health system decarbonisation because the way they are spent has significant impacts.
The 2015 Paris Agreement’s Article 2.1c urged that all forms of finance (public or private, domestic or international, debt or grant) and the ways in that money is packaged are all consistent with a pathway towards low greenhouse gas emissions and climate-resilience [9].
While it can seem that ‘climate finance’ is about global money, in reality most climate finance stays within its country of origin. 76% of climate finance in 2019 – 2020 was raised domestically in high income countries of East Asia & Pacific (mostly China), Western Europe and North America.
Managing existing funds for sustainable product procurement is a major part of transforming health systems. Take an important example, maternal healthcare labour and delivery in hospitals. Areas of pollution include carbon energy sources, irresponsible management of waste, use of disposable equipment packs and single-use medical devices, potent anaesthesia gases, and unnecessary caesarean deliveries [10]. All of these can be tackled within procurement decisions tied to existing budgets. The point here is that no new money is coming into maternity services or health systems to ‘do’ climate change and health – rather the way that services are organised and resourced must change.
User Fees
Patients using healthcare services may pay cash from their own pockets at a healthcare facility. This is called Out Of Pocket Expenditure (OOPs). Patients may also pay through their private (commercial or social) or government managed health insurances. Regardless, pooled health insurance funds, whether publicly or privately managed, are the ultimate purchaser.
Strategic purchasing by health insurance funds has been much discussed for Universal Healthcare Coverage (UHC). “Raising sufficient money for health is imperative but just having the money (is not enough) …. nor will removing financial barriers to access through prepayment and pooling. The final requirement is to ensure resources are used efficiently.” [11]. This applies to low carbon nature positive health systems as much as the pursuit of UHC. Indeed, the two goals are mutually supportive. The purchasing function, then, becomes a critical link between health insurance money and the management of that money.
Strategic purchasing means three things:
- identifying which services should be purchased;
- choosing who will provide those services;
- and deciding how the services will be paid for.
This is similar to strategic procurement although procurement refers to buying products like pharmaceuticals, buildings, equipment and so on while purchasing refers to services.
Strategic purchasing differs from passive purchasing. Passive means to follow an existing budget or simply pay the bills when they arrive. On the other hand, strategic purchasing involves actively identifying, assessing, and evaluating the best ways to reduce pollution and increase system resilience to climate chaos by making decisions on the which+who+how.
There doesn’t appear to be literature on using pooled health insurance funds strategically to influence health systems decarbonisation and climate resilience. A search on this topic found no returns so it currently seems open for a research agenda to be developed on the political reality of using this money source.
In terms of health insurance and climate change, most discussion by date of this post has been on insurance provider exposure to climate change risks. Risks such as damage from storms, wildfires, flooding, as well as changed disease dynamics. All of these impact on the possibility of a claim against a health insurer. Increased claims would mean private (commercial or social) health insurers have to increase payouts and in turn, increase insurance premiums.
The Global Shield against Climate Risks is a kind of financial insurance against climate and disaster related risks for vulnerable people and countries at country level created by the Vulnerable Twenty Group (V20) and Group of Seven (G7). The V20 are actually 68 member countries and include Cambodia, Fiji, Maldives, Philippines, Tuvalau, Vanuatu, and Vietnam to name but a few
Conclusion
The question perennially asked by healthcare organisations is: where is the money?
How can the transition to climate resilient low carbon nature positive health systems be financed?
I argue that there is much more money around than might initially appear.
This post has considered grants, on-budget, and pooled health insurance funds. Debt-based climate finance and equity are considered separately.
While there is a tendency to automatically think external grants when talking about climate finance, domestic finance for health is far more important.
Changing the way domestic financing (through on-budget and user fees for instance) is spent in local health systems is the greatest financing opportunity that low resourced health systems currently have.
References
[1] Think Global Health (2021) https://www.thinkglobalhealth.org/article/closing-gap-health-related-climate-financing
[2] UNFCCC https://unfccc.int/
[3] UNFCCC (2022) Fifth Biennial Assessment and Overview of Climate Finance Flows Technical Report https://unfccc.int/documents/619173.
[4] CARE Denmark & CARE Climate Justice Center (2022) That’s Not New Money : Assessing How Much Public Climate Finance Has been “New and Additional https://www.care-international.org/sites/default/files/2022-06/That%27s%20Not%20New%20Money_FULL_16.6.22.pdf
[5] Soucat A et al (2022) Understanding the Global Health Architecture Toward Greater “Donor” Independence in Making Health Systems Work in Low and Middle Income Countries Cambridge University https://doi.org/10.1017/9781009211086.036
[6] Lowy Institute Australia https://seamap.lowyinstitute.org/data/?donors=19869§ors=7&sort=sector
[7] UCSF Institute for Global Health Sciences & Open Consultants (2023) Improving Investments in Climate Change and Global Health: Barriers to and Opportunities for Synergistic Funding San Francisco: University of California
[8] Green Climate Fund News https://www.greenclimate.fund/news/green-climate-fund-and-global-fund-join-forces-tackle-impact-climate-crisis-health
[9] Independent High-Level Expert Group on Climate Finance (2022) Finance for Climate Action Scaling up Investment for Climate and Development
[10] Emont et al (2023) Health System Decarbonization on Obstetric and Newborn Units Seminars in Perinatology 47(8) https://doi.org/10.1016/j.semperi.2023.151844
[11]WHO (2012) World Health Report Health Systems Financing: The Path to Universal Coverage https://www.who.int/publications/i/item/9789241564021