Norway - Climate

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

In 2019, Norway spent US$488 million of its bilateral allocable official development assistance (ODA) on projects which targeted action against climate change as a principal or significant objective, making it the 13th-largest Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) donor to the issue, in absolute terms.


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.


Funding marked with the Rio markers represented 16% of Norway’s bilateral allocable ODA, below the DAC average of 23%. This puts Norway in 21st-place 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 10% of Norway’s bilateral ODA, above the DAC average of 7% (though down from 14% in 2018).

Norway’s climate-related ODA increased between 2016 and 2018, rising from US$547 million in 2016 to US$620 million in 2018. In 2019, funding decreased to US$488 million. 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 2021 ODA budget, the Norwegian government allocated NOK1.5 billion (US$166 million) to its budget line for ‘climate, environment and oceans’. In addition, NOK3.5 billion (US$394 million) was budgeted for ‘business development, agriculture, and renewable energy’. Of this, NOK399 million (US$45 million) was earmarked for renewable energy specifically. In 2020, funds were reshuffled as a result of the COVID-19 pandemic, money was 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$330 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$488 million spent on climate-related activities in 2019, US$295 million was spent on projects that targeted action against climate change as a ‘principal’ goal, down from US$473 million in 2018 (see box for more information). This represented 10% of Norway’s bilateral allocable ODA, above the DAC average of 7%. The remaining US$193 million (4% of bilateral allocable ODA) went to projects targeting climate as a ‘significant’ objective (DAC average: 16%). This is in stark contrast to other donors, who tend to invest larger amounts in programs targeting climate as a significant goal. 77% of Norway’s bilateral allocable ODA did not target climate change or was not screened against the Rio markers in 2019 (DAC average: 77%).

In 2019, US$430 million of Norway’s climate-related ODA went to projects supporting climate change mitigation, higher than the US$123 million funding that went to projects supporting climate-change adaptation. This included US$65 million (or 13% 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.

Almost half (49%) of Norway’s climate-related funding went to projects related to environmental protection. 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 energy (35%) and agriculture (7%).

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 GCF, 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$45 million in 2019 prices) a year to NOK800 million (US$91 million) a year for 2020 to 2023 (totaling NOK3.2 billion, or US$364 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$59 million in 2019 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$282 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.