Denmark funds a series of initiatives that help developing countries and emerging economies to convert their climate objectives into specific projects.
Climate funding and the Paris Agreement
In the Paris Agreement the countries confirm their promise to mobilise 100 billion USD a year for climate initiatives in developing countries from among others public and private sources. A new objective of funding to the developing countries shall be adopted before 2025 for the period after 2025. In this way, the Paris Agreement also opens for more countries to contribute to the funding.
Denmark and the EU can play a central part by assisting developing countries to convert their climate objectives into specific projects by means of climate funding and build-up of capacity.
Climate funding in cross-disciplinary initiatives
In Denmark, we focus on assisting the important emerging economies in their green transition by making Danish experience, expertise and technology available. Denmark has made bilateral cooperation agreements in the field of energy and climate with a series of the growing, emerging economies, including China, Mexico, Vietnam and South-Africa. The cooperation advances favourable regulations and robust framework conditions which is an important prerequisite to external as well as national climate funding. This work is supported by multilateral organisations such as e.g. The International Energy Agency (IEA) and The International Renewable Energy Agency (IRENA). Furthermore, Denmark is involved in the promotion of more favourable framework conditions by means of cross-disciplinary initiatives related to i.a. phasing out of subsidies for fossil fuels.
Demand and mobilisation
Furthermore, Denmark focuses on the development of the demand from developing countries and their readiness to receive climate financing that includes support for the so-called "readiness" activities and projects. The purpose of the subsidy is to enhance the capacity of the developing countries to plan and develop qualified climate projects that are ambitious and coordinated with national development plans to achieve external climate financing. This category also includes support to i.a. the NAMA-facility, the Sustainable Energy for All initiative (SE4All), the World Bank's energy sector programme (ESMAP) and The Climate Technology Centre (CTCN).
Furthermore, Denmark supports the fact that the supply of climate financing is expanded by mobilisation of climate financing by means of support to important climate funds that fill up holes in the existing climate financing structure and contributes to an efficient scaling up of climate financing. It concerns support to The Green Climate Fund (GCF) and The Global Climate Partnership Fund (GCPF).
New and Innovative Solutions
Finally, subsidies are granted to innovative financing initiatives and instruments aiming at breaking down barriers to the private sector in the field of climate financing - such as e.g. warranties and insurances. The energy saving initiative Energy Savings Insurance Instrument (ESI) is an example of an innovative instrument that provides an insurance component for private investments in energy efficiency improvement in developing countries. Another instrument is the creation of Green Investment Fund (GIF) in Vietnam, that also encourages investments in energy efficient technologies, and The Danish Climate Investment Foundation (KIF), comprising i.a. a series of Danish pension funds and that invests in commercial climate projects in developing countries.