Tuesday, October 22, 2019

Ulstein plans ‘substantial scale up’ in climate adaptation financing

Norway is the OECD’s least generous donor in helping poor countries adapt to climate change, spending the lion’s share of its climate aid on mitigation. Now Development Minister Dag Inge Ulstein wants to address this imbalance by making adaptation a “key pillar” of Norwegian aid.

According to the OECD, Norway spent more than NOK 6 billion (USD 710 million) on climate aid in 2017, 72 per cent of this for mitigation projects. Ulstein signals that he will in next year’s budget increase adaptation financing by NOK 500 million.

“Being cognisant of the imbalance in Norwegian climate finance and the huge gap in the need for finance to climate adaptation, I have decided that Norway will [in 2020] substantially scale up its support for strengthening climate adaptation, resilience to climate change and the fight against hunger in climate vulnerable countries … by NOK 500 million,” Minister Ulstein says to Development Today.

Mitigation refers to initiatives like renewable energy schemes that aim to avoid and reduce emissions of greenhouse gases. Adaptation refers to actions like early warning systems, mangrove protection and improved dryland crop production that reduce vulnerability to the consequences of climate change in the poorest countries.

The Paris climate agreement of 2015 called for a 50-50 balance in climate financing between mitigation and adaptation.

OECD DONORS’ CLIMATE AID, MITIGATION VS ADAPTATION (2017):

Donor

Sweden

Norway

Denmark

Finland

Mitigation-related aid (%)

30%

72%

34%

39%

 in (USDm)

352

508

132

182

Adaptation-related aid (%)

43%

21%

40%

31%

in (USDm)

505

146

157

145

Adaptation + Mitigation (overlap) (%)

28%

8%

26%

31%

in (USDm)

325

55

100

144

Total per Nordic donor

1,182

710

390

471

Source: OECD

OECD statistics on climate aid show that in 2017 Norway was the donor that spent the largest proportion of its development assistance for climate on mitigation – 72 per cent – and the smallest – 21 per cent – on adaptation. The OECD also has a category of “overlapping” climate financing for aid that has both adaptation and mitigation as objectives. In this category, Norway provided just 8 per cent of its climate aid.

Norway’s climate aid is dominated by the climate forest programme and renewable energy investments, mainly hydropower, managed by Norfund.

“For a long time, Norway has championed emission reductions in developing countries through our forest initiative and substantial investments in renewable energy. These are important efforts and will continue in the years ahead,” the minister says. “But only reducing future emissions is of little help to those who already suffer from climatic changes and find the struggle to secure their livelihoods becoming harder by the day.”

He says it has become increasingly clear that climate change is undermining efforts to reach the Sustainable Development Goals. Hunger is on the rise and without urgent action climate change impacts could push an additional 100 million people into poverty by 2030.

Half of the food production in parts of Africa could be lost in the near future due to climate change, the minister says.

Ulstein plans to make climate adaptation a “key pillar in Norwegian development cooperation,” part of the new action plan on sustainable food systems. “This will be a major contribution to our efforts to catch up with climate change. It will also be my most important priority as Minister of International Development,” Ulstein says.

While the bulk of Norway’s climate aid goes to mitigation, Sweden, which allocated USD 1.18 billion for climate activities in 2017, struck more of a balance: 30 per cent of these initiatives were purely mitigation-related; 43 per cent were for adaptation; and 28 per cent had both mitigation and adaptation as objectives.