Climate spending is set to become a major issue for the EU’s 2028–2034 budget negotiations this autumn. The European Commission has proposed to spend 35 per cent of the budget – over €700bn – on climate and environment measures. But environmental NGOs have warned this isn’t enough and claim that an attempt to reduce the number of spending programmes could see investment in climate and nature protection losing out.

The Commission says the proposed budget ‘ensures adequate revenues for our priorities while minimising pressure on national public finances.’ It adds that ‘simpler, more streamlined and harmonised EU financial programmes’ assist citizens and companies in easily accessing funding opportunities.

But it comes at a time when, across Europe, many major donors have cut development aid to help fund an increase in defence spending. It’s a response to growing threats from Russia and uncertainty over America’s commitment to the NATO alliance. The result has been a substantial impact on aid funding intended to address the climate crisis and those countries most affected by it.

The UK government has described the cuts as a ‘hugely difficult decision’ and said that funding will be focused on addressing humanitarian crises, preventing conflict and upholding international law.

The latest cuts have been widely denounced by campaigners, who have accused wealthy nations of renouncing their obligations to support developing countries that are least responsible for the climate crisis. In 2024 at COP29, developed countries, including European nations, agreed to triple climate finance for developing countries by 2035.

The cuts also follow the decision of the US, under President Donald Trump, to cancel most overseas aid programmes, including for climate-related projects. The administration perceives such spending as ‘wasteful’.

‘The retrenchment doesn’t appear to be marginal,’ says Rajat Jariwal, an officer of the IBA Environment, Health and Safety Law Committee. According to the OECD, international aid from member countries fell by 23 per cent in 2025 compared to 2024 – the largest annual drop in the history of official development assistance.

Across the UN climate and nature negotiations – including the organisation’s attempts to agree a treaty on plastic pollution – ‘the bargain has always been that the Global South accepts obligations and the North supplies the means of implementation. Withdraw the finance and the bargain looks as though it was made in bad faith,’ says Jariwal, a partner at Trilegal in New Delhi. ‘The cuts fall hardest on adaptation and nature, which are exactly the categories markets will not substitute because their returns are public in character.’

He says that recent legal developments could provide a way forward, however. The advisory opinion issued by the International Court of Justice in summer 2025 found that climate finance is a binding legal obligation, giving claimants new legal tools, explains Jariwal.

Even Norway, one of the few remaining European donors not to have cut its budget for climate-specific aid, has revised down the amount it’ll spend on combatting plastic pollution – sparking public outcry. The country’s government cut its 2026 plastic aid funding to the Norwegian Agency for Development Cooperation (Norad) by NOK 50m during a recent budget revision. The cuts come on top of a previous NOK 50m reduction to the original plastic aid budget, reducing funding for 2026 by NOK 100m compared with the previous year. Norway’s Minister of Finance Jens Stoltenberg said the revised budget aims to ‘[safeguard] the country, society and people’s finances […] in a more turbulent world.’ He added that ‘budget decisions will require more difficult trade-offs going forward.’

In July, the war in the Middle East, which has triggered an energy crisis and led to soaring oil and gas prices, led the International Monetary Fund to cut its global growth forecast for the second time this year. Norway has also cut its economic projection for 2026.

The decision on funding to combat plastic pollution contradicts Norway’s advocacy on the issue, however. In 2024, the Norwegian government described plastic pollution as ‘one of the world’s most pressing environmental issues.’ That year, the country committed to spending NOK 1bn over 2025–2028 to fund action against plastic pollution and marine litter.

The nation has championed a global treaty to curb plastic production and address ubiquitous pollution for years. Stalled UN negotiations on a legally binding instrument to address plastic pollution are due to resume in spring 2027. A small group of countries involved in manufacturing the petroleum products used to make plastics have staunchly opposed placing a cap on the creation of such materials.

Per Fredrik Pharo, Director of Norad’s Department for Climate, Nature and the Private Sector, says the cuts will primarily affect funds that haven’t yet been committed to projects. But a recent funding call for projects to combat plastic pollution in developing countries will see its budget reduced. ‘More broadly, the cut means that Norad will have less room for new commitments under the plastics programme and will need to reassess priorities in light of the revised budget,’ he says.

The decision came shortly before the Norwegian government approved plans to reopen three North Sea gas fields and 70 new locations for exploration to help address the supply shock created by war in the Middle East.

Critics in the Norwegian Parliament called the cuts ‘unacceptable’, warning they will undermine the country’s work on plastic clean-up. World Wildlife Fund Secretary General for Norway, Karoline Andaur, says the cuts represent ‘a substantial weakening of Norway’s international efforts at a time when sustained leadership is urgently needed’ and ‘many projects worldwide are in dire need of funding.’

Norway’s Minister of International Development, Åsmund Aukrust, argued however that the country ‘will be able to maintain part of our efforts in […] the fight against plastic pollution in developing countries and internationally,’ adding that ‘much of the work’ will continue. He highlighted that many donor countries are facing tough decisions on what to prioritise within their development budgets.

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