Netherlands - Climate

 

 

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The Netherlands uses the Paris Agreement as a basis for climate policy and continues to increase ODA spending

n 2020, the Netherlands committed US$1.7 billion of its bilateral allocable official development assistance (ODA) to projects which targeted action against climate change as a principal or significant objective, making it the sixth-largest Organisation for Economic Cooperation and Development (OECD) Development Assistance Committee (DAC) donor to the issue in absolute terms.  

Netherlands’ ODA targeting climate has steadily increased since 2016, reaching an all-time high of US$1.7 billion in 2020, when 41% of bilateral allocable ODA was tagged with the Rio markers (DAC average: 23%), making the Netherlands the fourth-largest in relative terms. 

Climate protection is a priority for the Netherlands. The development strategy ‘Doing What the Netherlands is Good At’ lays out a plan to increase the share of ODA targeting climate change and its consequences. The Netherlands aims to mobilize US$2 billion for public and private climate financing by 2025. The Netherlands is committed to spending 50% of its public climate finance on adaptation. A more detailed international climate strategy is expected to be published in late 2022.  

The 2019 ‘National Climate Agreement’ gives a detailed domestic policy framework for the Dutch government’s plans to meet the Paris Agreement’s 2030 goals, namely to reduce the Netherlands’ greenhouse gas (GHG) emissions by 49% compared to 1990 levels.  

Policy focus is on climate adaptation and agriculture; 14% of bilateral allocable ODA goes to projects addressing climate change as a principal goal 

The Netherlands’ climate-related ODA focuses primarily on adaptation (85%). Interventions aimed at climate change mitigation account for 61% of the Netherlands’ commitments to climate. As is apparent from the relative size of these percentages, some projects target both adaptation and mitigation. In 2020, 46% of climate funding was channeled toward projects tagged with both markers. (For more information on the markers, see box.) 

In 2020, 27% or US$1.1 billion of the Netherlands’ bilateral allocable ODA was committed to projects with a significant climate change component, well above the DAC average of 14%. 14% or US$605 million of funding in 2020 targeted climate change as a principal goal, well above the 9% DAC average. This marks a significant increase from only 9% of funding dedicated to climate as a principal goal in 2019, to 14% in 2020. Still, a large proportion (59%) of Dutch bilateral allocable ODA did not target climate change or was not screened against the Rio markers in 2020 (DAC average: 77%).  

‘Government and civil society’ projects received the largest share (28%) of Dutch climate financing in 2020. ‘Agriculture’ and ‘trade policy’ took the second- and third-largest shares with 19% and 11%, respectively, followed by ‘water and sanitation’ (11%). 

Dutch climate finance supports multilaterals working to transition to clean energy and protect biodiversity 

The Netherlands also contributes climate financing through multilaterals, though not all this funding is ODA-eligible. This includes contributions to the following multilaterals:  

  • Global Environment Facility (GEF): At the seventh replenishment of the GEF in June 2018, the Netherlands pledged to continue supporting the GEF with US$94 million for the 2018-2022 period. 

  • Green Climate Fund (GCF): The Netherlands pledged US$137 million for 2020 - 2023. 

  • Tropical Rainforest Alliance 2020: The Dutch government aims to combat deforestation through a five-pronged approach, including supporting multi-stakeholder initiatives, such as the Tropical Forest Alliance 2020. The Tropical Rainforest Alliance was allocated a total sum of €18 million (US$21 million) for the 2018-2020 period under ‘Sectoral Partnerships.’  

At the 2021 United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP26), the Netherlands also committed to discontinuing financing fossil fuel projects abroad. 

The Dutch Fund for Climate and Development (DCFC) is a key instrument of the Netherlands’ climate-related development policy 

While the Ministry of Economic Affairs and Climate Policy leads on national policy, the Ministry of Foreign Affairs (MFA) is responsible for climate-related development cooperation. The Dutch Fund for Climate and Development (DCFC), managed by a consortium of climate and development expert organizations, is a key instrument in realizing the Netherlands’ commitment to funding projects combatting climate change in low-income nations. In particular, the DCFC is managed by the Dutch development bank FMO, SNV Netherland, and Climate Fund Managers on behalf of the MFA.