Article | Last updated: 11/12/2014 | Ministry of Climate and Environment
Norway is a world leader when it comes to climate funding. We help developing countries to reduce deforestation, expand renewable energy and adapt to the climate changes. Climate funding is important to creating trust in the climate negotiations.
- Rich countries have promised to provide USD 100 billion annually from 2020 to fund climate measures in developing countries. The money will come from public, private and innovative sources.
- Norway is contributing with NOK 1.6 billion to the Green Climate Fund in the period from 2015 to 2018.
- The Government has allocated NOK 3 billion to the Norwegian Climate and Forest Initiative in 2015. This money is also known as the rainforest billions.
Why is Norway funding climate measures in poor countries?
The poor countries are hardest hit by the climate changes, yet have the least capacity to manage them. Therefore in 2009 the industrialised countries promised to mobilise USD 100 billion annually for climate measures in developing countries. The money will go to emission reductions and climate change adaptation. Demonstrated progress towards this goal is crucial for confidence in the climate negotiations and the quality of the new agreement. If we are to achieve the goal of limiting global warming to two degrees, developing countries must also contribute.
The green climate fund
- The green climate fund was formally established in 2010. In the years to come the fund will be a key tool for funding climate measures in developing countries.
- The goal of the fund is to give balanced support to adaptation and emission reductions, and to mobilise as much private funding for climate measures as possible.
Norway plays an active role in the fund. We have chairmanship of the board until autumn 2015. Norway will donate NOK 1.6 billion to the fund in the period from 2015 to 2018.
At the end of November 2014 the fund had received almost NOK 60 billion in contributions from both industrialised countries and developing countries. This is good news for poor countries that are planning to implement more substantial climate measures in coming years.
Norway has emphasised that large parts of the climate funding must still come from public sources. But it will not be possible to reach the goal of USD 100 billion within 2020 with only public sources of funding. It must also be worthwhile for the private sector to invest in climate-friendly solutions.
The Government is a driving force in setting an international price on carbon. This is followed up in particular through the work with promoting and developing market-based mechanisms both within and outside the framework of the UN's convention on climate change. By setting the price, it will send a clear signal to investors that it is less profitable to invest in activities with high CO2 emissions.
It is also important to use public funds strategically in order to increase private climate funding. It means, for example, supporting initiatives that make it more interesting for private parties to invest in renewable energy. The Norwegian Investment Fund for Developing Countries (Norfund) is a good example of an entity that is clearing the way for higher investments in renewable energy in poor countries.
Norway is an advocate for an ambitious climate agreement in 2015 in which all countries participate. We are working to create support on key principles on funding in the new agreement. Rich countries must continue to contribute with the lion's share of the climate funding.
At the same time, it is important that countries which are poor today put the conditions in place for climate investments. As the poor countries eventually have growing levels of affluence and emissions, they should also increase their own funding of climate measures. An increasing number of analyses show that funding climate measures is economically profitable.
The new agreement should therefore contain a commitment for all countries to mobilise funding for climate measures in line with their national capacity. At the same time rich countries must commit to mobilising increasing support for climate measures in poor and vulnerable countries.