Norway - Climate

Norway's bilateral ODA for climate

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Norway's bilateral ODA for climate by sector

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Norway's bilateral ODA for climate by type of intervention, 2018

Climate change is a cross-cutting issue in Norway’s development policy

In 2018, Norway spent US$670 million of its bilateral allocable ODA on projects which targeted action against climate change as a principal or significant objective, making it the ninth-largest Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) donor to the issue, in absolute terms.

This represented 19% of Norway’s bilateral allocable ODA, below the DAC average of 22%, and places Norway 17th among DAC donors. Unlike most DAC donors, however, the majority of Norway’s climate funding is channeled to projects marked as targeting climate change as ‘principal’ objective: Principal climate funding represented 14% of Norway’s bilateral ODA, double the DAC average of 7% (see below).

 


Climate finance: funding for projects tagged in the OECD’s Creditor Reporting System (CRS) database with the Rio markers for climate change mitigation and/or climate change adaptation. Projects can be tagged with either or both markers.

Each marker has three possible scores:

1) Principal, for projects in which climate change mitigation or adaptation is a fundamental and explicitly stated goal,

2) Significant, for projects in which climate change mitigation or adaptation is not a key driver but still an explicitly stated goal, or

3) Not targeted, meaning the project does not address climate change mitigation or adaptation.

Not all projects are screened against the Rio markers; this funding falls into the ‘not screened’ category.


 

Norway’s climate-related ODA has increased over the past three years, rising from US$596 million in 2016 to US$670 million in 2018. This, however, remains below previous levels: in 2014 and 2015, funding for climate-related ODA was just above US$800 million, amounting to around 25% of Norway’s bilateral ODA. This decrease might be due to lower funding level under the Norway International Climate and Forest Initiative (NICFI, see below), as countries that have not met their pledges no longer receive funding.

In its 2020 ODA budget, the Norwegian government allocated NOK1.9 billion (US$237 million) to its budget line for ‘climate, environment and oceans’. In addition, NOK4.5 billion (US$553 million) was budgeted for ‘industrial development, agriculture, and renewable energy’. Of this, NOK867 million (US$107 million) was earmarked for renewable energy specifically. However, because of COVID-19, funds have been reshuffled and money is being redeployed from initiatives and programs halted as a result of the crisis. This has included reallocation of some of Norway’s climate-related funding.

In addition to these funds, provided by the Ministry of Foreign Affairs (MFA), Norway’s largest climate-finance initiative is the Norwegian International Climate and Forest Initiative (NICFI), funded with NOK2.9 billion per year (US$356 million) for emissions reduction and climate adaptation in partner countries.

Within Norway’s overall development policy, the fight against climate change is both a cross-cutting issue (along  human rights, women’s rights and gender equality, and anti-corruption) and one of five thematic priority areas (‘climate, renewable energy and the environment’). According to its 2016 white paper on ‘Common responsibility for a common future – the Sustainable Development Goals and Norwegian Development Policy’, renewable energies occupy a crucial place in Norway’s development cooperation for climate. In 2020, the government committed to increasing its efforts for climate adaptation, prevention and the fight against hunger, making this a key focus area in Norwegian development work. The overall goal of this work is to strengthen developing countries' ability to resist and adapt to climate-related dangers and natural disasters. The government is dedicated to designing Norwegian climate financing so that it contributes to transformative measures with verifiable climate effect.

High share of funding went to project with action against climate change as their principal goal; focus is on mitigation

Of the US$670 million spent on climate-related activities in 2018, US$511 million was spent on projects that targeted action against climate change as a ‘principal’ goal (see box for more information). This represented 14% of Norway’s bilateral allocable ODA, almost double the DAC average of 7%. The remaining US$159 million (4% of bilateral allocable ODA) went to projects targeting climate as a ‘significant’ objective (DAC: average: 15%). This is in stark contrast to other donors, who tend to invest larger amounts in programs targeting climate as a significant goal. 81% of Norway’s bilateral allocable ODA did not target climate change or was not screened against the Rio markers in 2018 (DAC average: 78%).

In 2018, US$531 million of Norway’s climate-related ODA went to projects supporting climate change mitigation, higher than the US$244 million funding that went to projects supporting climate-change adaptation. This included US$105 million (or 16% of total climate-related funding) which went to projects that contributed both to adaptation and mitigation.

This strong focus on mitigation is largely driven by Norway’s work on renewable energies. When it comes to adaptation, Norway’s 2016 ODA policy white paper mentions climate-smart agriculture as an important field, both from a business and from an environmental perspective.

Norway’s climate-related funding largely went to project in environmental protection: almost two-thirds (60%). This is consistent with the large share of Norway’s ODA that was spent on projects with climate as a principal objective. It was followed by funding for agriculture (19%), multisector activities (11%), and energy (6%).

Norway significantly increased contributions to GCF and GEF over the past two years

Norway is a strong contributor to multilateral organizations, including for climate funds (though not all these funds are counted as ODA). It includes contributions to the following multilaterals:

  • Green Climate Fund (GCF): Norway is a strong supporter of the Green Climate Fund, and hosted its last replenishment meeting in April 2020. At this event, it pledged a doubling of its yearly contributions to the fund, from NOK400 million (US$49 million) a year to NOK800 million (US$98 million) a year for 2020 to 2023 (totaling NOK3.2 billion, or US$393 million). Norway is the sixth-largest donor to the fund, and the third largest donor per capita.
  • Global Environment Facility (GEF): In April 2018, the Norwegian government increased its pledge to the GEF by 20%, pledging to contribute NOK520 million (U$64 million in 2018 prices) over four years.
  • Climate investments Funds (CIF): Norway is one of 14 donors to the World Bank’s Climate Investments Funds (CIF), and has contributed US$269 million to it since its inception in 2008.

MFA guides climate-related cooperation, Ministry of environment funds major climate initiatives

Under the Ministry of Foreign Affairs’ (MFA) leadership, the Minister for international development is in charge of development cooperation, including for climate-related issues. Within the MFA, the Department for Sustainable Development is responsible for Norway’s work relating to climate change and the environment, as well as for promoting Norway’s energy interests. Within Norway’s development agency, Norad, the Department for Climate, Energy and Environment is the most relevant to these issues. In addition, the Ministry of Climate and Environment funds NICFI, Norway’s major climate-finance initiative.

 

Unless otherwise indicated, all data in this section is based on commitment. For more information, see our Donor Tracker Codebook.