Insights from DAC Members’ reporting on environment and climate commitments

Climate change is a defining challenge of the 21st century, and it is both compounding existing threats to sustainable development as well as creating new obstacles (OECD, 2019[1]). Sustainable development and climate change are therefore inseparable. The latest assessment report by the United Nations Intergovernmental Panel on Climate Change (IPCC) concluded that “human-induced climate change is already affecting many weather and climate extremes in every region across the globe” (IPCC, 2021[2]). Heatwaves, heavy precipitation, droughts, tropical cyclones, sea-level rise and ocean warming and acidification are all phenomena that can undermine countries’ ability to achieve the objectives of the 2030 Agenda for Sustainable Development. Assessments by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) have also shown the significant alteration of nature across the globe by multiple human drivers, leading to a rapid decline in the majority of indicators of ecosystems and biodiversity health (IPBES, 2019[3]). All these phenomena are altering the ecological systems that underpin economic activity and human societies, including their well-being, safety and development (Hoegh-Guldberg, Jacob and Taylor, 2018[4]). Developing countries, especially those already affected by extreme poverty, fragility, inequality and other types of vulnerability, are the most exposed to the impacts of climate change (Hallegatte et al., 2015[5]). Ultimately, this is undermining countries’ ability to achieve sustainable development.

The importance of integrating climate and sustainability into development pathways and efforts to achieve development outcomes has been highlighted by an extensive body of research and analysis. This body of work has also highlighted the key role that development co-operation and development finance can play in catalysing countries’ transitions to low-emissions, climate-resilient and environmentally sustainable development pathways (Germanwatch/New Climate Institute, 2018[6]; OECD, 2013[7]; CPI, 2019[8]; WRI, 2018[9]). In particular, it underlines the opportunities for development linked to a better alignment between development policies and climate and environment objectives in areas like climate change mitigation, climate change adaptation, environmental protection, biodiversity and sustainable ocean use and management (OECD, 2019[1]; 2020[10]; 2021[11]).

Putting green growth at the heart of development co-operation is, therefore, a priority to bring about the shift to environmentally sustainable, low-emissions and climate-resilient development pathways in developing countries (OECD, 2019[1]). Investing in activities that help developing countries mitigate and adapt to climate change is a key lever to catalyse climate action and mobilise the capacity and finance needed to achieve a transition to environmentally sustainable, low-emissions and climate-resilient development pathways. This is in line with commitments made by developed countries in Article 9 of the Paris Agreement, including the commitment to mobilise USD 100 billion in climate finance from all sources by 2020.

The vast majority of international climate finance in support of climate action in developing countries comes in the form of official development finance. According to OECD estimates, in 2019, 79% of climate finance counting towards the USD 100 billion commitment took the form of official development finance. In addition, development finance instruments and activities directly mobilised private finance towards the USD 100 billion goal, which constituted a further 18% of the total reported (OECD, 2021[12]).

Yet, recent reports show that the gap that separates ambition and action is still large. The most recent United Nations Framework Convention on Climate Change (UNFCCC) Nationally Determined Contribution (NDC) synthesis report finds that available NDCs from all 191 Parties taken together could lead to a temperature rise of about 2.7 degrees by the end of the century (UNFCCC, 2021[13]). This would result in dramatic consequences for all countries but especially for those that have the least means to face the challenges that such a scenario would entail. At the same time, the Global Biodiversity Outlook 5 confirmed that none of the 20 Aichi Biodiversity Targets agreed through the Convention on Biological Diversity had been met by 2020, further threatening the achievement of the Sustainable Development Goals (SDGs) and weakening efforts to address climate change (CBD, 2020[14]). Finally, despite growing concerns regarding escalating climate risks, the Global Commission for Adaptation recently underlined that finance flows are still falling short and do not reach the people and regions that need them the most (GCA, 2020[15]).

To maximise its impact and effectiveness, development co-operation needs to evolve in response to the challenges posed by a world vulnerable to the escalating climate crisis and to the threats posed by worsening environmental degradation. Some elements of this transformation include better co-ordination across providers of development co-operation; enhancing the integration of climate and environmental concerns into development policies, strategies and approaches; proactive support for partner countries’ own transition plans through capacity building, technical assistance and provision of concessional finance; and better-targeted support for the most vulnerable countries, with a particular focus on Small Island Developing States (SIDS) (DAC, 2020[16]).

In November 2020, DAC Members came together to address these interrelated challenges. In the DAC High-Level Meeting Communiqué, they set out a number of commitments to improve their support to developing countries in taking ambitious climate action and achieving environmentally sustainable, low-emissions and climate-resilient development pathways, as the only sound option for achieving the ambitions of development co-operation under the 2030 Agenda (OECD, 2019[1]; DAC, 2020[16]). The four core commitments set out by Members of the DAC and on which this report is based are:

  • Commitment on co-ordinated approaches on environment and climate issues: “We will consider options for co-ordinating development approaches with international climate and environment objectives through a member-driven process, according to a calendar to be confirmed by DAC Members” (DAC, 2020[16]).

  • Commitment on systematic integration of environment and climate objectives: “We will work to ensure that our post-COVID-19 development policies and programmes are consistent with international climate and environment objectives, and will work to integrate them systematically” (DAC, 2020[16]).

  • Commitment on support for the sustainability transition: “In the spirit of fairness and just transition, we will support developing countries to achieve their own transitions to environmentally sustainable, low-emissions and climate-resilient development pathways, including by promoting sustainable, quality infrastructure” (DAC, 2020[16]).

  • Commitment on support for SIDS’ sustainable development: “We commit to improving how our policies and programmes address the particular needs of SIDS, and to working with them to address obstacles they encounter in accessing finance for resilient and sustainable development” (DAC, 2020[16]).

This chapter provides overarching findings on DAC Members’ efforts and progress in aligning their actions to these four core commitments. Information in this report reflects the most recent policies and approaches adopted by Members and, when possible, the evolution of such policies and approaches in recent years.

In response to the commitment to enhance its co-ordination on environment and climate issues, the DAC has conducted an extensive exercise, which resulted in a shared declaration to COP26. This declaration, which is presented in full in Box 1, highlights key priorities for DAC Members’ collective action in support of developing countries’ efforts to fight climate change, biodiversity loss and environmental degradation and, through this, come closer to achieving the objectives of the 2030 Agenda for Sustainable Development.

The commitments and action points set out in the declaration represent a collective agenda for DAC Members with regard to the environment, climate change, and its systematic integration across development programmes so as to translate into concrete actions, measures and outcomes.

Climate and environment mainstreaming refers to the deliberate and proactive integration of environmental concerns, including climate, into development policies, plans, budgets and actions (OECD, 2019[18]). While this integration of environmental and climate concerns is necessary to ensure the sustainability of all development co-operation activities, it has been difficult to achieve in practice (OECD, 2019[18]). In particular, most DAC Members have environmental safeguards in place to screen out negative environmental practices. At the same time, they recognise that the challenge of sustainable development requires far more robust policies, capacities and approaches that integrate the wider range of environmental and climate threats (OECD, 2019[18]). Similarly, there is a growing appreciation of the economic growth and broader development benefits that are to be gained from development pathways that fully integrate environmental sustainability and are nature positive.

To assess this commitment, this section provides an overview of the political commitments DAC Members have undertaken with regard to systematically integrating environment and climate goals into their activities, as well as the strategies, approaches, policies and tools they have deployed to give effect to these commitments.

DAC Members share a clear sense of urgency to integrate climate and environment concerns into their development co-operation activities. In their reporting, all DAC Members stressed their commitment to aligning their international development co-operation policies and approaches with the objectives set out by international environment and climate agreements and goals. These commitments were expressed through official statements, development co-operation strategies, enshrined in national laws or other official documents.

A number of DAC Members have committed explicitly to aligning their development co-operation with international climate and environmental objectives, notably the Paris Agreement. In France, for example, the French Agency for Development (Agence française de développement, AFD) has a formal commitment to be “100% Paris aligned” since 2017. Similarly, in 2019, Sweden started its work to ensure that the alignment of its development co-operation with the Paris Agreement would be further enhanced. Another approach is to include development co-operation as part of broader national commitments and processes. Iceland reports that its most recent NDC includes, as one of three new or enhanced aspects, commitments to increase climate-related ODA activities. Yet other DAC Members have enshrined commitments about integrating environment and climate change into development programmes by law. Spain, for instance, through the Spanish Climate Change and Energy Transition Law (Boletín Oficial del Estado, 2021[19]), mandates the adoption of an International Climate Finance Strategy, whose objectives include coherence of Spanish development co-operation with climate objectives, including by incorporating these principles into its regulatory and planning framework. Similarly, the law on Belgian development co-operation (Affaires Etrangeres, Commerce Exterieur et Coopération au Développement, 2013[20]) identified environment and climate as crosscutting issues that must be incorporated throughout all development co-operation. In 2019, the Netherlands published a policy to green its instruments for foreign trade and development co-operation, stipulating more specifically that these be in line with the Paris Agreement and the 2030 Agenda for Sustainable Development (Minister for Foreign Trade and Development Cooperation, 2019[21]).

Beyond specific national commitments, many DAC Members report ratification of, or support for, international conventions or agreements in relation to the systematic integration of international climate and environment objectives into their development approaches. The agreements most frequently cited in DAC Members’ reporting are the Paris Agreement on Climate Change (26 of 30 Members) and the 2030 Agenda for Sustainable Development (24 of 30). Several Members also include references to the Sendai Framework for Disaster Risk Reduction (8 of 30) and the Convention on Biological Diversity (6 of 30). In referencing these agreements or conventions in reporting on commitments for development co-operation, such reporting suggests that these agreements also serve as a direct framework for ODA activities. Most DAC Members do not provide additional information on what these commitments imply concretely with regard to development co-operation.

DAC Members also commonly reported creating or joining coalitions, alliances and partnerships as an expression of commitment to, and as a means of pursuing, common goals. For example, 23 out of 30 DAC Members have joined the High Ambition Coalition for Nature and People with the goal of protecting at least 30% of the world’s land and ocean by 2030. Similarly, slightly more than half of DAC Members take part in the Global Ocean Alliance with the aim to protect at least 30% of the global ocean as Marine Protected Areas (MPAs) and Other Effective area-based Conservation Measures (OECMs) by 2030. Table 1 lists some recent environment and climate initiatives to which several DAC Members have signed up. While joining these coalitions and initiatives implies a commitment to the high-level objectives they aim to pursue, and which may often go beyond domestic action, further information would be needed to assess to what extent participation in such common initiatives relates to or translates into commitments for development co-operation or external action more broadly.

Closely associated and often a key part of political commitments, many DAC Members – 24 out of 30 – report financial targets as underpinning the systematic integration of international climate and environmental objectives into their development programmes. A central, collective commitment for most DAC Members is the delivery to developing countries of USD 100 billion of climate finance per year by 2020.1 For this commitment, scaling up the provision of climate finance to developing countries is in itself a way to contribute to the alignment of development co-operation with international climate objectives. Several DAC Members have recently made use of international conferences, such as the Group of Seven (G7) Leaders Summit or the United Nations General Assembly (UNGA), to make special announcements, particularly on new financial commitments and targets, often in the context of the USD 100 billion objective.

Table 2 provides an overview of financial targets and commitments reported by DAC Members.

Alternatively, or in addition to financial commitments, DAC Members also set other quantitative objectives. For example, the Netherlands has set specific targets to deliver access to renewable energy to 50 million people and double the productivity and incomes of 8 million small-scale food producers between 2015 and 2030. Similarly, Japan has announced support for at least 5 million people over the four years from 2019 to 2022 to increase resilience to disasters and provide training for a total of 48 000 people, including government officials and local leaders, as well as education for a total of 37 000 children on disaster risk reduction (DRR). The United States has set specific targets by 2025, including to help at least 20 countries to mobilise at least 20% of needed funding to implement their NDCs and leverage resilience and adaptation goals. Finally, France’s approach takes into account targets in terms of carbon dioxide emissions by specifying that 50% of AFD support to developing countries needs to have climate co-benefits and should help avoid 4 million tonnes of carbon dioxide per year (on average) over 2020-22.

When it comes to the systematic integration of environmental and climate change objectives into development co-operation, the DAC statistical system provides widely used, publicly available and highly disaggregated data. Even before the introduction of the “Rio Markers”, the DAC had established a general environment marker in 1997. To favour alignment and track finance towards the objectives of certain international agreements and objectives, several UN Conventions have been integrated in the DAC statistics system since the 1990s. Since 1998, the DAC has tracked ODA flows targeting the objectives of the Rio Conventions on biodiversity, climate change and desertification through the OECD-DAC Creditor Reporting System (CRS) using “Rio Markers”. The Rio Markers identify activities that mainstream the conventions’ objectives into development co-operation and help track donors’ portfolios alignment with and support to the objectives of the conventions. DAC Members are requested to indicate for each development finance activity if the activity targets these environmental objectives. The Rio Markers on biodiversity, climate change mitigation and desertification were introduced in 1998, with a fourth marker on climate change adaptation being applied to 2010 flows onwards (DAC, 2020[22]). Given their stated purpose to track mainstreaming of international environmental and climate change objectives, the policy makers provide a good indication of the extent of the systematic integration of these objectives across development programmes of DAC Members (Figure 1). To date, the Rio Markers represent the most comprehensive, publicly available activity-level data on climate-related development finance from bilateral donors.

There is no ideal share that would include environmental and climate change objectives for bilateral ODA activities, as this depends on a variety of factors that include individual Members’ sectoral, as well as geographical priorities and comparative advantages, their operational models and instruments, their comparative use of multilateral channels for specific purposes, as well as some variation in individual reporting conventions. At the same time, the data do not support a strong or clear overall increase in the focus on environmental and climate objectives between 2015 and 2019, which could be expected from an overall enhanced focus on or mainstreaming of these dimensions across development programmes.

This contrasts with an increased highlighting by developing countries for support in integrating, in particular, climate change aspects across a broad range of sectors and activities, many of which show very low shares of ODA activities that integrate climate objectives (OECD, 2019[1]). Overall, the picture clearly points to substantial unused scope to enhance the integration of climate and environmental objectives across development co-operation activities.

Strategies and policies are important to translate commitments into development co-operation approaches, programmes and operations. This is particularly relevant, where commitments take the form of support of broad international agreements or objects in the area of climate change or environment, which do not provide for clear or direct measures or objectives with regard to development co-operation.

Despite the transition being a priority for most Members, a relatively small number of DAC Members has reported having dedicated strategies or action plans to underpin the systematic integration of specific international climate change or environmental objectives into their development co-operation programmes. To substantiate its commitment to be 100% Paris aligned, as mentioned above, for instance, France’s AFD adopted a new climate strategy for the period 2017-22 with an explicit focus to ensure the compatibility of all its activities with the Paris Agreement. Additional key pillars of the strategy, which is crosscutting and applied to all sectoral and country/regional strategies, are: increasing the volume of climate finance, contributing to the redirection of financial flows towards climate, and co-building solutions and bringing influence to bear on standards. Similarly, in 2019 the UK government made a commitment to align UK ODA with the Paris Agreement. This was articulated in the United Kingdom’s Green Finance Strategy. In practice, this approach involves using an appropriate carbon price in relevant bilateral programme appraisal, ensuring any investment support for fossil fuels aligns with the Paris Agreement temperature goals, implementing a proportionate approach to climate risk assurance and ensuring that aid programmes do not undermine countries’ NDCs and National Adaptation Plans (NAPs) (UK Government, 2019[23]). The Slovak Republic’s 2019-2023 Medium-term Strategy for Development Co-operation (SlovakAid, 2018[24]) also stipulates alignment with the Paris Agreement as an explicit objective, alongside the 2030 Agenda and the New European Consensus on Development, while ruling out any support for activities that have negative environmental impacts. Moreover, several Members, including Australia, Germany, Italy, Japan and Poland, also reported policies to align with the Sendai Framework for Disaster Risk Reduction.

All DAC Members report that environment and climate change are either a key objective or a crosscutting priority for their development co-operation. Sixteen Members identified biodiversity as a priority area as well. While they may not be based specifically on international objectives, this highlights the central priority environment and climate action assumes in DAC Members’ programmes. In addition, several DAC Members stress working with multilateral institutions, notably multilateral development banks (MDBs), to ensure that ODA channelled through multilateral channels is also aligned with climate and environmental goals.

A majority of DAC Members developed dedicated strategies for climate and environment to guide their support to developing countries. In November 2019, for instance, Australia released its Climate Change Action Strategy (2020-25) (CCAS) (Department of Foreign Affairs and Trade, 2019[25]), which drives both targeted climate-specific investments across the development programme and mainstreaming of climate action in key sectors (e.g.  clean energy, infrastructure, agriculture, water, health, governance). Another example is the Policy and Programming Act for International Environmental Co-operation 2020-2022 adopted by Italy’s Ministry for the Ecological Transition in 2020 (Ministry for the Ecological Transition, 2020[26]), which promotes the strengthening of synergies among the objectives of the three Rio Conventions, with the 2030 Agenda and the Sendai Framework for Disaster Risk Reduction. It includes general and specific priorities for environmental development co-operation.

Several DAC Members reported that they are currently working to develop or update their climate strategies and policies, reflecting the renewed importance of the topic and evolution of the agenda.

In addition to specific strategies for climate and environmental objectives, a number of DAC Members have specific policies for mainstreaming climate and environment considerations into all their activities across relevant sectors, including through climate and environment screenings. In Ireland’s current policy for international development, A Better World (Government of Ireland, 2019[27]), one of the key pillars of the climate strategy is to climate-proof development co-operation activities by integrating climate action into all work. In 2021, Luxembourg launched a new Environment and Climate Change Strategy for development co-operation, to strengthen mainstreaming and ensure alignment with Luxembourg's international commitments in this area.

Below the level of overall climate change strategies and mainstreaming policies, many DAC Members also refer to specific strategies for different sectors, policy areas and priorities for systematic mainstreaming across their programmes at a more granular level. Germany, for instance, has several action plans and strategies in place to ensure the alignment of its work in relevant sectors and areas such as water, forests, marine conservation and sustainable fisheries, and health. Japan uses operational strategies in several environment- and climate-related sectors, including national environment conservation, environment management, climate change, energy and disaster risk reduction.

Twelve DAC Members have developed post-COVID-19 development policies and programmes aimed at building back better and greener. For instance, the Nordic countries (Denmark, Finland, Iceland, Norway and Sweden) have developed a common “building back better and greener” approach and are turning it into action by strengthening the Nordic Development Fund (NDF) with additional capital of EUR 350 million, for climate work in developing countries (Ministry for Foreign Affairs, 2020[28]). Germany’s strategy for the COVID-10 recovery focuses on supporting the sustainability and climate focus of the World Bank’s extensive reconstruction programmes, as well as targeted resourcing of developing country capacity, notably in developing country finance ministries on climate-friendly recovery packages.

A majority of DAC Members report using specific operational tools to further assist with the alignment, as well as to systematically integrate climate and environment considerations into monitoring, evaluation and learning (MEL) frameworks. The tools range from guidelines, environmental and social safeguards, environmental risk and impact assessment tools, climate-proof screening, carbon footprint accounting, exclusion lists, tagging and reporting, and learning tools.

Guidelines serve multiple purposes, such as setting standards and action plans, providing assessment checklists, exclusion lists, eligibility requirements and potential risk-screening criteria. They can be broad strategic guidelines, such as Austria’s 2009 Interministerial Strategic Guideline on Environment and Development in Austrian Development Co-operation (Federal Ministry for European and International Affairs, 2009[29]), or they can have a more narrow, specific focus, such as the Netherlands’ Quick Reference Guide for Integrating Gender Equality in Climate-smart Development (Dutch Sustainability Unit, 2014[30]) and the Internal Framework Instruction for Greening Multilateral Development Banks.

Safeguard and screening policies are applied by many DAC Members to check whether activities may increase environmental, climatic and associated social vulnerability and, where necessary, ensure risk management measures are put in place. Impact assessment tools are used to assess whether strategies, programmes and projects are at risk from climate change, environmental degradation and natural hazards and to ensure that resources and development assistance are used efficiently. Switzerland’s Climate, Environment and Disaster Risk Reduction Integration Guidance (CEDRIG) tool (CEDRIG, 2021[31]), for example, serves to assess both whether strategies, programmes and projects are at risk from, or could further contribute to, greenhouse gas emissions, environmental degradation or disaster risks.

A number of DAC Members use mainstreaming tools to strengthen organisational capacity to support climate change integration across development programmes. This includes Australia’s Climate Change, Energy and Environment Toolkit, the Netherlands’ Climate Mainstreaming Toolbox, Japan’s Climate Finance Impact Tool, and Finland’s Guideline for Crosscutting Objectives in Finland’s Development Policy. Irish Aid has established a centralised online Climate and Development Learning Platform as a resource for Ireland’s Missions, Units and development partners.

DAC Members often make use of approaches or tools from international organisations or developed through international processes that have assumed a function as a reference standard. Examples reported by DAC Members include the International Finance Corporation (IFC) safeguards, the Environmental and Social Safeguards Standards of the Green Climate Fund, and standards and principles from the Association of European Development Finance Institutions. Further examples include, e.g. Austria and the United Kingdom adopting the recommendation frameworks by the Task Force on Climate-Related Financial Disclosures for their development banks’ sustainability reporting. At a basic level, DAC Members such as Spain and the European Union also stress the key function of the environmental OECD markers to track their climate-related expenditures, evaluate their performance and set targets.

Finally, when DAC Members channel development co-operation mostly through multilateral organisations, they strongly depend on the operational tools applied by the latter, implying strong reliance on international organisations, either as implementing agencies or as providers of guidelines and standards. As a consequence, three DAC Members also report a focus on their governing role in international organisations, and in particular as shareholders of MDBs and development finance institutions, as part of their commitments and efforts to mainstream environmental and climate objectives systematically across development co-operation. In view of this, Members such as France and the United Kingdom report having specific approaches or strategies for their role as donor-shareholders in these institutions. They serve to define, in particular, positions to influence MDBs and international partners to move away from funding fossil fuel projects in third countries and to actively use their leverage to harness the transformative potential of these institutions and accelerate climate action in developing countries.

Achieving low-emissions, climate-resilient development pathways now represents the only viable option for achieving the ambitions of development co-operation under the 2030 Agenda (OECD, 2019[1]; IPCC, 2021[2]). This section provides an overview of:

  • How DAC Members have engaged with partner countries’ own strategies for the transition and how they are supporting them through different instruments and approaches, including with a view to ensuring the consistency of national processes and strategies with the international objectives they were designed to support and collectively achieve. National strategies include, among others: NDCs; NAPs and processes; Long Term Strategies (LTS); National Biodiversity and Strategy Action Plans (NBSAPs); and Land Degradation Neutrality targets (LDN targets).

  • How their projects and programmes in partner countries provide for transitions that are environmentally sustainable, climate-resilient and consistent with low-emissions development pathways towards net-zero.

DAC Members’ understanding of the transition and of the types of support required to implement it differ substantially. Most DAC Members’ view of the transition is framed by the global climate, environment and sustainability agenda and its key components – in particular, the 2030 Agenda and the Sustainable Development Goals, the Paris Agreement, but also, for example, the Sendai Framework for Disaster Risk Reduction and the Convention on Biological Diversity. Many Members also reference the central role of NDCs for the transition. This, and other central frameworks (like for EU members, the Green Deal) together with national policies, strategies and principles form important parts of the basis for co-operation for transition support.

The vast majority of DAC Members (27 of 30) report conducting specific activities or contributing to specific programmes focused on supporting partner countries in achieving transitions to environmentally sustainable, climate-resilient and low-emissions development pathways. Transition support is provided through a variety of channels and programmes, via bilateral and multilateral support, specific funds, MDBs and a range of initiatives, targeting both development and implementation of transitions plans, including capacity building, technical support and investments. In addition to contributions through dedicated funds such as the Green Climate Fund (GCF), the Global Environment Facility (GEF), the Adaptation Fund and others, and support delivered through major multilateral organisations such as the United Nations Development Programme (UNDP) and the International Fund for Agricultural Development (IFAD), Members report a range of programmes and initiatives, with different scope and covering different aspects of the transition.

Only a few Members report the existence of specific policies or approaches for development co-operation to support the transition and the transformative change it implies. They stress the need for the integration of different environmental dimensions, notably biodiversity and climate change, to effectively support the transition, and the approaches centre on making use of leveraging finance, policy and capacity building in a way to actively promote or achieve transformational change.

Swedish Sida’s Environment Policy proscribes a proactive promotion of transformation to an environmentally sustainable development by integrating environmental aspects in all operations and sectors. Germany refers to transformation, e.g. in the context of the Federal Ministry for Economic Cooperation and Development (BMZ)’s work with the German Sustainability Strategy and the implementation of the 2030 Agenda and its SDGs. The level of detail regarding Germany’s understanding of transformative change processes is similar to the 2030 Agenda itself, tackling the economic, ecologic and social dimensions of sustainability.

In Norway, the forthcoming strategy and environmental action plan for Norad aim to strengthen support to developing countries’ transitions to a resilient, low-carbon society. Norad will seek to identify types of development assistance that can have transformational effects towards this end, i.e. contributing to broad changes in society beyond the immediate results of the development assistance. The United States, as part of its Global Climate Ambition Initiative, intends to engage strategically with governments, the private sector, civil society, and communities to support transformational policies and programmes, build human and institutional capacity, and create momentum toward a zero-emissions, climate-resilient future.

While DAC Members, for the most part, do not have a clear definition or conceptual approach to the transition, the reporting by DAC Members reveals some common elements shared by DAC Members in how they work with developing countries to support their transitions.

Broad collaboration is an important component of how DAC Members understand their support for the transition. Members frequently stress the importance of local ownership and a partnership approach. To ensure local ownership, Belgium, for example, emphasises policy dialogues at different levels with developing country partners, including a broad network of civil society partners. The Netherlands underscores a focus on effective collaboration between all relevant social actors. In their climate interventions, they work through alliances with the private sector, knowledge institutes/networks, non-governmental organisations (NGOs) and multilateral organisations. Australia describes taking a partnership approach and working co-operatively with countries in the Indo-Pacific to help the region reduce emissions and adapt to climate change, as reflected in their NDCs, NAPs and other national development plans.

Sharing their own transition experiences is an important component stressed by some Members. Recognising that the transition has a significant impact on societies, economies and industries, Poland, for example, strives to share its own experience, knowledge and know-how related to overcoming the economic and social challenges of the transformation towards a low-carbon and low emissions economy. Similarly, Spain, in the context of policy dialogues with developing country partners or in other contexts, shares its experiences in this regard with special reference to the coal transition.

Members focus their support on specific priorities for the transition. They describe particular topics or focus areas for their engagement that are seen as central elements of or priorities for the transition, while also reflecting DAC Members’ overall priorities and comparative advantages, in view of ongoing engagements, resources and capacities for development co-operation.

Examples of this include financing and mobilising private investments by the Netherlands, for which they established the Dutch Fund for Climate and Development (DFCD) aimed at, in particular, climate adaptation projects. Austria works particularly at supporting transition and adaptation at local levels. Canada and Luxembourg put a special emphasis on girls and women, aimed at advancing women’s leadership, creating economic opportunities for women in clean energy, supporting entrepreneurship and local production, especially among women. Italy has a particular focus on agriculture, which it considers to be at the centre of the transition to a low-emissions and climate-resilient development, in addition to a geographic focus on African partner countries. Several other Members also report focusing on specific regions or geographical areas for co-operation on transitions.

A substantial share of Members sees addressing the biodiversity crisis and its links with climate change as a key dimension of the transition. Germany, for example, sees COVID-19 as a symptom of a multi-dimensional crisis that has biodiversity loss and climate change at its roots, which has been reflected in the 2020 selection criteria for projects within the International Climate Initiative (IKI). Norway, as the main donor of the UN-REDD (Reducing Emissions from Deforestation and Forest Degradation) programme, supports transition strategies with a focus on forest conservation and management in a high number of countries.

Canada recognises that urgent action is needed to address the interconnected crises of climate change and biodiversity loss, which disproportionally affect the poorest and most vulnerable, and intends to increase supporting nature-based solutions to climate change and to support sustainable development objectives more broadly. Overall, a substantial subset of DAC Members (10 of 30 reports an increasing focus on nature-based solutions, pointing clearly to an area of increasing interest. At the same time, the interest has yet to be matched with more concrete action, practical tools and learning, including in the potential to mobilise resources at scale through nature-based solutions.

Overall, support to energy transitions clearly emerges as a central feature of the transition to low-emission development pathways. Many DAC Members see supporting energy transitions, renewable energy and increased energy access as central priorities for supporting environmentally sustainable and low-emissions transitions and have committed to assisting developing and emerging economies in the decarbonisation path.

In light of the growing body of scientific evidence, DAC Members agree on the importance for the world economy to achieve a net-zero transition as quickly as possible. A broad range of initiatives and support schemes exist, focusing on this key dimension of the transition. For example, the United States has committed to transforming the Southern Africa region's reliance on fossil fuels and assisting its path to decarbonisation and supporting renewable energy deployment, particularly in the Southern African region, through its Power Africa Initiative (USAID, 2021[32]). Korea recently announced its commitment to end all public financing for new overseas coal-fired plants and to support the energy transition of countries highly dependent on coal-power generation (Government of Korea, 2021[33]) .

The Energising Development (EnDev) Programme, initiated by Germany and the Netherlands and supported by Norway and Switzerland, is a global energy access partnership. It is active in more than 20 countries, supporting partner countries in developing sustainable energy systems, including the necessary political and legislative foundation, with the aim of helping 50 million people in developing countries to gain access to renewable energy by 2030.

The Africa Renewable Energy Initiative (AREI), an Africa-led initiative to fight climate change and improve Africans' access to energy, was launched by African heads of state at COP21. It is supported by France, the European Union and other Members, including through financial support to the Independent Delivery Unit of AREI and its activities. Sweden supports the World Bank’s Energy Sector Management Assistance Program (ESMAP), which helps create sustainable energy systems including by supporting national reform processes to create incentives for investment in renewable energy, reforms to integrate solar and wind power into national electricity grids, and the development of electrification plans and processes for introducing clean energy.

In addition to engaging in broad initiatives, DAC Members also focus on energy through bilateral partnerships and programmes. Luxembourg, e.g. supports Cabo Verde for the development of its Renewable Energy Strategy aiming to improve access to clean energy and increase energy independence. Subsequent bilateral co-operation programmes were adapted to support Cabo Verde in the implementation of the strategy. The objective of Portugal’s support for carbon sustainability and ecosystem services for Príncipe Island in São Tomé e Príncipe is to promote economic growth through the development of a roadmap for carbon sustainability. Some DAC Members that do not currently have dedicated support programmes in support of energy transition report taking active steps to explore options for enhanced engagement in this area.

The high importance DAC members attach to energy transitions is not yet reflected in ODA data to the energy sector from 2015-2019. Figure 2 provides an overview of DAC Members’ ODA in support of energy over the 2015-19 period.

Overall ODA spending in support of energy over 2015-2019 did not exhibit an increasing trend. Within ODA support to energy, renewables account for the highest share (34%) of aggregate support over the 2015-2019 period, but year-on-year ODA to this sub-sector has recorded decreasing spending in 2018 and 2019. Substantive shares of energy ODA are allocated to energy policy (including energy efficiency) (20%) and energy distribution (28%) which, given the key role of policy and regulatory measures as well as the need for smart energy distribution systems for mobilising private investments, are considered key areas for the transition. Similarly to renewable energy generation, these sectors do not exhibit increasing ODA commitments over 2015-19. Conversely, while fossil fuel-based activities, including energy generation, as well as energy manufacturing and upstream activities account for a smaller share of ODA to energy over the period (16%), ODA spending in this sectors shows a strong increase in the latest available year (2019), when these activities account for the highest share among energy sub-sectors.

ODA support to the energy sector is highly concentrated among DAC providers (see Figure 3). The three largest DAC donors to energy account for more than 70% of total ODA in this area, and the largest five donors account for over 90%.

One relevant factor that explains this trend is that, for many DAC members, large infrastructure projects are not part of their operating model, which is mainly grant-based. At the same time, they consider in particular Multilateral Development Banks as key channels to promote these activities. The concentration is even more pronounced in the area of fossil fuel-based activities, as only a small number of Members provide ODA financing for new fossil fuel-based power generation, related infrastructure, upstream exploration and manufacturing activities. At the same time, ODA to fossil fuel-related sectors (Figure 2) often includes activities aimed at enhancing governance, improving development focus or outcomes from fossil-fuel based sectors and activities in developing countries, and promoting energy efficiency measures. Members who do provide financial support to the energy sector report that they do so (Figure 3) in response to needs for stable energy supply, getting out of poverty, and greater financial support to achieve a just transition in developing countries.

According to the net-zero pathway by 2050 developed by the International Energy Agency (IEA), there is no need for investment in additional fossil fuel supply, with no new oil and gas fields approved for development in the IEA pathway, and no new coal mines or mine extensions required (IEA, 2021[34]).

Overall, DAC member prioritisation of supporting the transition toward net-zero energy systems would point to an expected evolution with regard to overall spending and composition of ODA to the energy in the future, in a way that addresses the demands of developing countries to support their development priorities in the most sustainable way possible.

There are international discussions related to ending the promotion of new fossil fuel-based power generation capacity and additional exploration. Several Members, whose development financing activities traditionally included financing of power generation or other additional fossil fuel investments and financing, had announced individual commitments related to the phasing out and exclusion of fossil fuels investments and finance from their development finance. Among these countries, the United Kingdom, through the introduction of the Fossil Fuels Policy of 31 March 2021 (Department for Business, Energy and Industrial Strategy, 2021[35]), announced that it will end support to the fossil fuels energy sector overseas. France established in 2019 a new Energy Transition Strategy (AFD, 2019[36]) excluding from its financing any coal-fired power plants, as well as any fossil fuel exploration, or production projects, or projects exclusively dedicated to coal, gas and oil transport, conventional and unconventional. In a similar manner, Slovenia has implemented a legal ban to finance programmes or projects that contribute to an increased use of fossil fuels (EUR-Lex, 2021[37]). These commitments come on top of the commitments by G7 countries to end new direct government support for unabated international thermal coal power generation by the end of 2021, including through ODA, export finance, investment, and financial and trade promotion support agreed at the 2021 G7 Summit (G7 Summit, 2021[38]).

As part of the OECD DAC Declaration on a new approach to align development co-operation with the goals of the Paris Agreement on Climate Change, DAC Members agreed collectively to end new ODA for unabated international thermal coal power generation by the end of 2021, on the same terms as agreed by the G7 (OECD DAC, 2021[17]). They further stressed the commitment to making financial flows consistent with pathways towards net-zero development, prioritising support to technologies for the net-zero transition, and focusing on accelerating progress in this regard.

Infrastructure choices and investments will be decisive for achieving climate objectives. They also play an important role for other environmental objectives, including biodiversity. In particular, infrastructure will be critical for supporting the climate and sustainability transition, recovering from the coronavirus (COVID-19) crisis and achieving the long-term development objectives of developing countries. Quality infrastructure investment, including implementation through appropriate delivery mechanisms and efficient management over their lifecycle, is therefore vital to ensuring that infrastructure fulfils its potential as a catalyst for growth and sustainable development (OECD, 2020[39]).

A majority of the Members (17 of 30) describe a clear approach to supporting quality infrastructure in support of and consistent with the transition to environmentally sustainable, low-emissions and climate-resilient development pathways in partner countries. Among these, a number of typically larger donors with substantive infrastructure investment support programmes describe elaborated methods to support quality infrastructure throughout the project cycle, assuring compliance with (Group of Twenty) G20 principles or that investments contribute to the SDGs.

Japan has been actively promoting quality infrastructure, and the G20 Principles for Quality Infrastructure Investment were endorsed at the G20 Osaka Summit in 2019. Japan describes strengths in helping to develop infrastructure that is truly contributory to “quality growth” in developing countries, which also includes technology transfer and job creation. Several other DAC Members refer to the G20 Principles as key reference or guidance for their infrastructure engagement, while applying them with complementary policies with regard to fossil fuel-based investments, which is not within the scope of the principles. France has adopted commitments to further implement the G20 Principles for Quality Infrastructure Investments at the Summit on the Financing of African Economies held in 2021. Building on agreed standards, such as the G20 Principles for Quality Infrastructure Investment, and supporting initiatives, such as the Coalition for Climate Resilient Investment (CCRI), one dimension of the United Kingdom’s promotion of quality infrastructure investment is the support for co-ordinated action among G7 members to ensure higher standards and improved disclosures. Germany is, among other things, engaged in technical co-operation and support to the Programme on Infrastructure Development in Africa (PIDA).

Another set of donors refer to the provision of quality infrastructure through MDBs and dedicated climate funds. One example is Denmark, which primarily supports infrastructure through multilateral organisations and banks that meet the G20 principles, after assessing all supported partners on environmental and social safeguards according to the Danish Aid Management Guidelines. Several Members, whose ODA activities do not encompass direct project finance of infrastructure investments, report limited or no specific information on support to quality infrastructure.

Multilateral institutions, and their alignment with climate and environment objectives, are also seen as central for supporting transitions. As earlier described, while many Members use different channels for their transition support and climate finance, support through multilateral institutions, including MDBs, dedicated climate funds, and other international organisations, is often a central – sometimes the only – channel. Multilateral channels are particularly important for the financing and funding of key infrastructure in developing countries, which is part of the core business model of these institutions. Consequently, the alignment of the operations of major multilateral financers of infrastructure in support of climate and environment objectives is an important priority that directly defines the scope and nature of the delivery of climate action by DAC Members.

Finland, for example, does not have bilateral programmes explicitly designed to support transitions and channels most of its development co-operation finance through multilateral organisations. Finland encourages implementing partners to align development co-operation activities with national transition strategies, a recommendation that is explicitly integrated in their development policy guideline for crosscutting objectives. Canada has established funds at several international financial institutions, including, for example the World Bank and the Green Climate Fund, to support partner countries to implement their own national transitions. DAC Members also report being members of informal groups of senior representatives from like-minded governments, who are shareholders in multilateral development banks to advocate for MDB alignment with the Paris Agreement.

Aligning with and supporting national plans – when they exist – is central to DAC Members’ approaches to supporting the transition. As DAC Members see ownership and partnership as a central dimension of supporting developing countries on their transitions, they share a strong focus on working with developing country partners on their own plans and strategies for achieving climate and environment objectives. This alignment with partner countries’ national transition plans is a recurring theme among DAC Members. For the Czech Republic, for instance, partner countries’ national strategies are reflected in relevant country strategies, and in the identification of bilateral projects. Similarly, for Portugal, a specific Memorandum of Understanding (MoU) on environmental activities details the areas where projects are to be developed in line with the partner country’s own needs and national plans. Luxembourg seeks to provide support to those interventions that are anchored in and aligned with NDCs and national choices of the target countries, guided by the principles and approaches defined in the Paris Agreement.

Many DAC Members support developing countries to develop and enhance the ambition of NDCs. Nationally Determined Contributions are at the heart of the mitigation efforts of the Paris Agreement. Each party to the agreement is required to prepare, communicate and maintain successive NDCs that they intend to achieve, describing their priorities and efforts to reduce national emissions and adapt to the impacts of climate change. Taken together, the ambition of the NDCs determines how the world will achieve the temperature goals of the Paris Agreement. Recognising that the long-term climate goals will be achieved over time, the Paris Agreement builds on a successive ratcheting up of aggregate and individual ambition, with parties submitting new NDCs every five years. Consequently, NDCs, together with LTS, NAPs and other national strategies and policies, are of utmost importance, and DAC Members see a key part of their transition support to work with developing countries on their NDCs. DAC Members’ support for these processes is made even more relevant by the fact that many developing countries, and especially Least Developed Countries (LDCs) and SIDS, have indicated that the achievement of their goals and targets is contingent on the level of support they receive from developed countries for implementation (Fransen, Northrop and Mogelgaard, 2017[40]).

DAC Members see the NDC Partnership as an important channel for transition support. Eighteen DAC Members are part of the NDC Partnership, and this initiative is described by several of them as having a central role in channelling and co-ordinating Members’ transition support to partner countries, and was reported as being an important channel of support by six DAC Members. The NDC Partnership is a network through which member countries can gain access to targeted technical assistance and capacity building, opportunities for knowledge to fill information gaps and enhanced financial support. The United Kingdom reports that the partnership co-ordinates major donors’ technical assistance support for NDC implementation. For example, by co-ordinating NDC facilitators who support with planning, reporting and implementation, and embedding economic advisors into finance/planning ministries to support with green recovery packages in response to COVID-19. France likewise describes that finding synergies between its own and other sources of support for partner countries’ national transitions is made possible by the support and close co-ordination with the NDC Partnership. Germany supports partner countries by financing various programmes and projects that are contributing towards a green and climate-sensitive transition under the umbrella of the NDC Partnership.

A similar initiative in support of NDCs is the Regional Pacific Nationally Determined Contributions Hub (Pacific NDC Hub), which, as reported by Australia, assists Pacific island countries and territories by providing in-country advice and technical support, and promoting regional collaboration to address common issues across the Pacific with NDC implementation.

DAC Members also support other national transition plans, like NAPs, National DRR and Resilience Plans, LTS and NBSAPs. Germany, for instance, provides support to partner countries in bilateral and various multilateral projects and programmes in developing and raising the ambition levels of their NDCs and LTS, including transposition of LTS and NDCs into sectoral policies and implementation. Members may also support developing countries in the implementation of Sendai Framework for DRR and Resilience through bilateral and multilateral expert assistance, such as the Czech Republic which focusses its support on LDCs.

Another example is the NAP Global Network (NAP GN), a channel through which the United States, Canada and Germany support NAP processes and South-South knowledge exchange. Ireland, in keeping with its particular focus on adaptation, supports the NAP process in LDCs and SIDS and funds the Least Developed Countries Expert Group (LEG), the only body mandated by Parties to the UNFCCC to provide dedicated support to LDCs. The LEG assists these countries in their efforts to design, plan and implement NAPs and facilitates access to financial and technical support. Norway supports other initiatives, such as the Biodiversity Finance (BIOFIN) Initiative of the UNDP, which assists developing countries in incorporating biodiversity comprehensively into their national development planning and financial strategies, including their NBSAPs.

France’s AFD focuses parts of its efforts on national climate strategies. Having itself committed to being 100% aligned with the Paris Agreement, it ensures that 100% of its projects are in line with the priorities identified in partner countries’ own national climate strategies. Tools have been made available to support the development of such strategies or provide technical assistance for preparation and implementation when needed. One example is the Adapt’Action Facility, which assists countries and regional organisations particularly vulnerable to climate change to implement adaptation strategies. It provides technical assistance and capacity-building support to strengthen climate governance, and helps countries incorporate climate-change adaptation within their public policies and projects. In addition, countries, including, for example, Japan, support institutional and capacity development to prepare greenhouse gas (GHG) emissions inventories as a prerequisite for preparing and developing concrete plans and measures, as well as reviewing progress in partner countries.

A general challenge relates to the fact that supporting national plans by developing countries may not be commensurate with the objectives they are meant to achieve. As shown by recent reports, current NDCs are insufficient to achieve the objectives of the Paris Agreement (UNFCCC, 2021[13]), and stronger action is required. In this context, many DAC Members see their transition support to developing countries in terms of working with them towards strategies and plans enhanced or accelerated action towards the transition. Development co-operation has a key role to play to help enable developing countries to develop and take forward operational strategies and plans that eliminate inconsistencies between the objectives of international climate and environmental agreements, including the Paris Agreement, and their national development and transition plans (OECD, 2019[1]). At the same time, information provided for this report mostly does not provide clear approaches DAC Members take in the case of significant inconsistencies between developing countries’ current national plans and strategies and international climate and environmental objectives they have subscribed to.

As a group of countries bearing some of the most severe impacts of climate change, SIDS have been specifically mentioned in the DAC HLM Communiqué. For SIDS to seize new development opportunities, embark on sustainable development pathways, and become more resilient to the challenges posed by climate change, it is important that the international community take their specific circumstances into account to make development co-operation work better for them (OECD, 2018[41]). This sub-section provides a summary overview of how DAC Members support SIDS in relation to these challenges.

Four DAC Members have a dedicated development co-operation strategy for engaging with SIDS, or for engaging with a geographical subset of them (Ireland, France, Japan and New Zealand). France’s SIDS Strategy coincides with its ocean strategy (Three Oceans Policy). Japan has developed a strategy for engaging specifically with SIDS in the Pacific through the Pacific Bond KIZUNA Policy, which focuses on five key priorities, among which COVID recovery, sustainable oceans, climate change and disaster resilience are included. New Zealand has pledged 60% of its total ODA to developing Pacific Island Countries and aligned these under the Pacific Islands Forum’s Roadmap for Sustainable Development.

A larger number of Members acknowledges the specific challenges of SIDS in their overarching development co-operation strategies and identify SIDS as one of the priority groups for support, either in specific sectoral or geographic development co-operation strategies. This is the case with respect to Australia’s Climate Change Action Strategy; Denmark’s Development Strategy; Germany’s adaptation and resilience-building focus in its BMZ 2030; Italy’s development co-operation on climate action; Korea’s ODA Strategy for Fragile States; Luxembourg’s Environment and Climate Change Strategy; Norway’s Strategy on Climate Change, Hunger and Vulnerability and its Marine Litter Programme; Sweden’s Strategy for Regional Development Co-operation in Asia and the Pacific Region in 2016–2021; and the European Union’s Global Climate Change Alliance+.

Many DAC Members have in place development co-operation programmes and projects benefitting SIDS and, for a few Members, SIDS account for a significant share of their ODA portfolio. For instance, most of Portugal’s development co-operation partner countries are SIDS (e.g. Cabo Verde, Guinea-Bissau, Sao Tome and Principe and Timor-Leste), accounting for 42% of Portugal’s ODA portfolio in 2019. The following Members also allocated that year a large share of their ODA portfolio to SIDS: New Zealand (44%), Australia (31%) and Spain (10%).

Acknowledging SIDS’ unique capacity constraints, a number of DAC Members report support for the participation of SIDS’ representatives in key climate and ocean negotiations and processes. For instance, Germany supports the Alliance of Small Island States (AOSIS) and its members in international climate change, sustainable development negotiations and processes. Italy has supported training and capacity building in international climate and ocean negotiations for young politicians from developing Pacific islands. Norway supports AOSIS on capacity building and facilitation for the group in negotiations. Australia has supported the participation of women in climate-related negotiation processes through the Pacific Women Climate Change Negotiators Training, which has seen an increase in Pacific women delegates attending UNFCCC negotiations.

In describing their nature and climate support to SIDS, 21 Members indicate that climate change is a key priority, 11 Members point to a sustainable ocean economy and resilience, 9 to disaster risk reduction, and 9 to renewable energy. Recent examples of increased support in these areas include the announcement in 2019 by Ireland of a new EUR 12 million climate change and disaster resilience fund at the Asian Development Bank dedicated to SIDS in the Pacific. The trust fund aims to help increase SIDS’ resilience to the impacts of climate change and to disasters caused by natural hazards. The fund also seeks to help increase investments in climate change mitigation and adaptation among SIDS. Other Members have a long track record of support in these areas, such as Japan’s assistance to Pacific SIDS to mainstream disaster risk reduction, which includes training meteorological agency personnel of each country and developing rapid evacuation systems for residents.

A number of new and ongoing initiatives suggest growing Members’ engagement with SIDS on the sustainable ocean economy. The UK GBP 30 million Commonwealth Marine Economies Programme is assisting SIDS to develop climate-resilient, sustainable economies while safeguarding their marine environment. The United Kingdom is also establishing a new GBP 500 million Blue Planet Fund, launched by the Prime Minister at the G7 Summit, to help countries protect and restore the marine environment and reduce poverty, including in SIDS. Through its co-operation with Pacific SIDS, Italy supported the creation and implementation of Marine Protected Areas for a total of about 2 million square kilometres in the Pacific Ocean, favouring the conservation of marine resources that are severely threatened by the effects of climate change. Korea is committed to protecting the ocean ecosystem and strengthening the capacity of SIDS in managing marine resources. Korea launched the Blue Growth Initiative for Small Island Developing States in co-operation with the Food and Agriculture Organization (FAO) in order to help SIDS develop and introduce a new management model for marine resources. The European Union launched the Pacific-European Union Marine Partnership Programme, 2017-2023 (PEUMP), with the overall objective of improving the economic, social and environmental benefits for 15 PACPs (Pacific members of the African, Caribbean and Pacific group [ACP]) through stronger regional integration and the sustainable management of natural resources and the environment. The purpose of the programme is to support improved sustainable management and development of fisheries for food security and economic growth, while addressing climate change and conservation of marine biodiversity. Canada, Norway and other DAC Members supported the establishment of PROBLUE, a new 150-million multi-donor trust fund that is hosted at the World Bank to foster ocean conservation and sustainable ocean activities. Other Members focus on specific aspects of the sustainable ocean economy in their support to SIDS, such as Japan on sustainable waste management in the Oceania region through its “MARINE Initiative”, and the United States on sustainable fisheries and illegal, unreported, and unregulated fishing through the United States Agency for International Development (USAID)’s Oceans and Fisheries Partnership (USAID Oceans).

Many SIDS have made ambitious commitments on clean energy, which some Members are helping to support. SIDS reliance on high carbon-emitting energy sources often weighs particularly heavily on their import bill given their remote location and high import costs, reducing the fiscal space available for development investments. Among the specific projects reported by Members in this area, Canada provided USD 60 million to establish a Renewable Energy in Small Island Developing States Program at the World Bank. This funding supports the expansion of clean energy systems and infrastructure (including battery solutions), improvement of energy access for women and girls, and the provision of training and employment opportunities for women in non-traditional, sustainable technology sectors in SIDS. France is active on the subject of access to sustainable energy for SIDS (e.g. geothermal, solar, wind, marine energies, etc.), both through direct bilateral co-operation and through its support to the International Renewable Energy Agency (IRENA)'s SIDS Lighthouse Programme, to which France provided a contribution mainly aimed at promoting marine energies, in particular by identifying and mapping the potential of different territories for this type of energy. In addition to France – Denmark, Germany, Italy, Japan, New Zealand, Norway, the United Arab Emirates and the United States contribute to IRENA’s SIDS Lighthouse Programme, which fosters a transformation from fossil fuel dependence to renewable energies. Spain has been supporting renewable energy projects with the International Union for Conservation of Nature in Oceania.

In 2019, climate funding to SIDS fell back to 2017 levels (from USD 2.1 billion to USD 1.5 billion) after a temporary increase in 2018, signalling SIDS’ continued challenges to access climate and nature finance (OECD, 2021[12]). Recognising that SIDS often face structural challenges in attracting and gaining access to private finance for climate action, Australia reports its support for developing pipelines of investment-ready projects to facilitate increased private finance, including by bridging the gap between project proponents and financiers. The United Kingdom has also been engaged in supporting SIDS’ access to finance through various initiatives, including its role in co-chairing with Fiji the Taskforce on Access to Climate Finance; its work with Belize and Fiji on a SIDS Access to Concessional Finance Roundtable Process; and through the Commonwealth Climate Finance Access Hub (CCFAH). The CCFAH, for instance, embeds Commonwealth National Climate Finance Advisers within governmental institutions to work specifically with ministries and other stakeholders focused on climate change to strengthen institutional capacity by bridging gaps in institutional and financial knowledge, skills and technical capabilities.

In December 2017, at the first One Planet Summit, the French President announced the Kiwa Initiative, sponsored by Australia, Canada, France, New Zealand and the European Union. The Kiwa Initiative aims to fund climate change adaptation or coastal zones restoration and preservation projects, as well as other initiatives that can have a positive impact on communities and climate resilience. During its G7 Presidency, Canada supported the increased mobilisation of resources and knowledge through innovative financing approaches, such as blended finance, climate resilient debt instruments, risk mitigation tools and investor partnerships. USAID (with over USD 200 million) and New Zealand have supported partners to access climate finance from international organisations, such as the Green Climate Fund (GCF), the Adaptation Fund and the Global Environment Facility through targeted technical support for the development and submission of bankable project proposals that are translated into country-driven actions to respond to the urgent climate change priorities of Pacific Island Countries. For example, the USAID Climate Ready Activity supported capacity-building efforts in the Federated States of Micronesia and Palau, which secured USD 10.4 million in climate change-related grants from the GCF in 2021. Additionally, New Zealand has pledged 20% of its ODA as Aid for Trade to Pacific SIDS and provided technical assistance for financial reforms, debt management and increased foreign investments attraction.

For a few smaller DAC Members, SIDS are outside the scope of the priority countries chosen. In line with the OECD DAC Peer Review recommendations, based on their comparative advantage and in view of capacity constraints, they focus their direct activities on a small number of countries, often in their geographical neighbourhood. Some, mostly smaller, Members therefore mainly target support to SIDS via the multilateral development system, and in particular, climate vertical funds (i.e. Austria, Belgium, Netherlands, Slovak Republic). For instance, Austrian development co-operation supports the Pacific and the Caribbean Centres for Renewable Energy and Energy Efficiency (PCREEE and CCREEE) on specific renewable energy and energy efficiency solutions to SIDS. In late 2020, Finland joined, as a financer, CREWS (Climate Risk and Early Warning Systems), which is a mechanism that funds LDCs and SIDS for risk-informed early warning services in order to better equip them to forecast and respond to climate risks.

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[13] UNFCCC (2021), Nationally determined contributions under the Paris Agreement. Synthesis report by the secretariat, United Nations Framework Convention on Climate Change, https://unfccc.int/sites/default/files/resource/cma2021_08_adv_1.pdf.

[32] USAID (2021), Power Africa, https://www.usaid.gov/powerafrica.

[9] WRI (2018), Toward Paris Alignment: How the Multilateral Development Banks Can Better Support the Paris Agreement, World Resources Institute, https://files.wri.org/d8/s3fs-public/toward-paris-alignment_1.pdf.

Note

← 1. The UNFCCC Annex II parties are those that are required to provide financial resources to enable developing countries to undertake emissions reduction activities under the Convention and to help them adapt to adverse effects of climate change, and who are required under the Convention to provide information on financial resources provided. The Annex II list is narrower than the OECD DAC Membership.

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