Rethink financing of global public goods
While the “common” good can be said to overlap with traditional aid priorities, using aid to finance initiatives that benefit wealthy countries undermines the whole idea of official development assistance. It creates an untenable pressure on scarce aid funds. And it takes attention away the fact that the response required to finance global public goods is on a scale that goes far beyond aid.
Norway, it turns out, has reached farthest into its aid budgets to finance such global initiatives. This is the conclusion of a report by the Norwegian aid agency Norad, which found that about one-fifth of total Norwegian bilateral aid over the past six years has gone to global public goods. No other OECD donor spends more of its aid in this way than Norway.
Global public goods financed by Norwegian aid include fighting climate changing, nuclear disarmament, stabilizing oceans, the development of vaccines. These are all areas that have been key Norwegian political priorities over the last decade.
Using aid to finance these areas has led to confusing aims and conflicting goals – like arguing that aid money should be used to fund the development of COVID-19 vaccines on the grounds that these vaccines will benefit the poor; or offering billions of crowns to persuade tropical countries to leave trees standing, in the name of preventing climate change, while continuing to draw up oil from the North Sea.
We have observed similar contradictions in Danish aid, where stemming migration is a political priority. The government’s principal concern is to prevent asylum seekers from coming to Denmark and it is trying to establish an asylum centre in an African country to manage its business. Denmark is using aid to grease the wheels – so far, without success. But the narrative is that Denmark is helping people in need by providing what the government calls “a fairer and more humane asylum system.”
In its report, Norad highlights the contradictions of such an approach. It argues that the aid budgets must be sheltered, and it proposes a fundamental re-think in the way global public goods are financed.
While separating things like climate interventions and pandemic response from aid would mark a break with current practice, looking back only two decades we find that this approach is not untried. At the time, Denmark was the global ODA leader with an aid level of 1 per cent of its Gross National Income. On top of this, Denmark had a frame for environmental programmes, mainly in developing countries, which were not reported to the OECD as aid.
Recently, Norway launched a new NOK 10 billion renewable energy fund for emerging economies. Not surprisingly, it is partly funded by aid. This is precisely the kind of initiative that should not be financed from the aid budget. Rather, it should be seen as a way for Norway to reinvest some of its oil wealth in renewable energy.
A new coalition government of Labour and Centre is about to take office in Oslo. The last time Labour led the government, it launched the rainforest scheme which has, over the years, claimed almost NOK 35 billion from the aid budget. At the time, Labour and its then coalition partner Centre Party ignored the advice of civil society organisations who argued that such a massive climate mitigation project should be funded from outside the aid budget.
Thirteen years on, Labour and Center now face the same dilemma. But this time, the price tag for global public goods is much higher. They need a new vision for how Norway can combat climate change and be better prepared for deadly pandemics than merely raiding the aid budget.