The Norwegian government has set a target to double its overall climate finance from NOK 7 billion in 2020 to NOK 14 billion by 2026 at the latest.
Climate finance will be one of the main issues during the negotiations at the UN Climate Change Conference of the Parties (COP26) in Glasgow, to be held from 31 October to 12 November. The commitment made by the developed countries to provide USD 100 billion in climate finance annually to developing countries by 2020 has not yet been fulfilled.
The developing countries need financing both to reduce greenhouse gas emissions and to strengthen their resilience to future climate change.
‘There is a need for a concerted international effort to increase climate finance. One of the mainstays of the Paris Agreement is that the wealthy countries are to help those who have the most limited resources to take effective action to adapt to climate change. This will require the provision of both financial support and expertise, and Norway intends to do its part. The Government will double Norway’s annual climate finance from NOK 7 billion in 2020 to NOK 14 billion (approximately USD 1,7 billion] by 2026 at the latest,’ said Minister of Climate and Environment Espen Barth Eide.
Climate finance essential for developing countries
Norway’s climate finance includes funding via the aid budget for climate-related actions and investments; mobilisation of private capital through Norfund, the Norwegian Investment Fund for developing countries; and the new climate investment fund.
In 2020, Norwegian climate finance comprised NOK 6.6 billion in public funding and NOK 400 million in mobilised private capital. For the first time, Norway is now establishing a quantifiable target for its consolidated climate finance.
‘If we are to deliver on the promise from developed to developing countries, we need to increase public funding and mobilise more private financing. In particular, more funding is needed for adaptation measures, and Norway plans to at least triple its funding for this,’ said Minister of International Development Anne Beathe Tvinnereim.
USD 100 billion every year in climate finance
The agreement reached at the Climate Change Conference in Paris in 2015 included a commitment by the developed countries to jointly mobilise USD 100 billion in climate finance to developing countries every year by 2020, and to maintain this level of funding moving forward.
The funding is to come from a wide variety of sources, public and private, bilateral and multilateral. Unleashing more funding from sources outside the public sector is key to fulfilling this commitment.
Enabling the developing countries to accelerate their transition to renewable energy will also be essential. The new climate investment fund provides a new tool for triggering investments in renewable energy far more quickly than would otherwise have been the case, and can thus help in the efforts to phase out coal. The aim is to mobilise funding from private investors that is nine times the amount provided by the state.