Since 2010, Denmark has contributed more than DKK 7.5 billion to support the fight against climate change, including DKK 2 billion from the Climate Envelope. The funds address both climate change mitigation and adaption in developing countries. Since December 2015, the Paris Agreement has been an important part of the juridical and administrative framework guiding the Danish contribution of climate finance to developing countries.
The increasingly significant consequences of climate change are enhancing the need for a transition towards more sustainable solutions. At the same time it is evident that adaptation to climate change is urgently needed, especially for the poorest and most vulnerable countries. Including the private sector is central in financing the needed climate investments. These circumstances are the background for Denmark’s contribution to climate finance in the developing countries. Danish public climate finance is administered within the framework of Danish development assistance, as it is difficult to separate finance for climate activities from development assistance, since both should be incorporated into the national development plans of the recipient countries.
Apart from the Climate Envelope, contributions to United Nations Environment Programme (UNEP) and the Green Climate Facility (GEF) have a focus on climate but are financed outside of the Climate Envelope. Further, Danish public climate finance is channelled through a number of bilateral programmes within e.g. energy, environment, and agriculture. An overall statement from OECD/DAC shows that Denmark in 2014 allocated about DKK 1.8 billion to climate-related activities as a part of the overall development cooperation.
The Climate Envelope
Initially the Climate Envelope was established to support the active participation of especially the poorest developing countries in the negotiations towards a new, global climate agreement in order to strengthen their ownership to the negotiation process.
Today the Climate Envelope is primarily financing contributions to activities which assist the developing countries in reducing emissions and adapting to the consequences of climate change. The intention is to seek a balance between contribution to adaptation targeting the poorest and most vulnerable countries and mitigation targeting the reduction of greenhouse gas emissions. In addition to a number of global interventions with multilateral partners, support is given to bilateral cooperation in e.g. Vietnam, Indonesia, Bangladesh, Kenya, Ethiopia and Mexico. Furthermore contributions have been made to specially vulnerable island developing states (SIDS, Small Island Development States) in order to promote the use of renewable energy and the increase in energy efficiency in these countries.
The Green Climate Fund
The Green Climate Fund was established at the climate summit in Copenhagen in 2009. The fund is supposed to mobilise finance for investments in low-emission and climate-resilient development in the developing countries. Denmark has agreed to support the fund with DKK 400 million. The Danish contribution is per capita in line with Germany’s announced contribution of EUR 750 million in four years.
The Green Climate Fund is foreseen to play a central role in order to support the developing countries’ transition and adaption to climate change. The fund will e.g. support renewable energy, forest programmes and capacity building. Denmark is sharing seat in the board of the fund with the Netherlands and Luxembourg, and participated in the approval of support to the first concrete mitigation and adaption activities in November 2015.
Links to our collaborating organisations and funds can be found below.