Iceland
Political commitments, strategies and tools
Iceland’s political commitments and targets
Iceland, in co-operation with the other Nordic countries and other partners, has been at the front of the Build Back Better and Greener post-COVID-19 movement. Iceland’s commitment to aligning development policies and programmes with international climate and environment objectives is reflected in joint Nordic declarations and op-eds on the issue, including at the United Nations (UN), the World Bank and the OECD. This is also reflected in interventions and statements by the Icelandic Minister for Foreign Affairs and Development Co-operation over the last one and a half year.
Climate, together with human rights and gender equality, guides Iceland’s development co-operation. Iceland has committed to increasing its engagement and contribution to climate-related official development assistance (ODA) activities, including as one of three new and/or increased commitments in renewed Nationally Determined Contributions (NDCs). Iceland is already in the top five OECD Development Assistance Committee (DAC) donors contributing the highest proportion of ODA to climate-related actions, at over 40% in 2019.
Iceland is a Global Champion for the UN High-Level Dialogue on Energy (HLDE) that took place on 24 September 2021. At the HLDE event, Iceland presented its Energy Compact. The Energy Compact complements and is in line with the Paris Agreement. It includes the Icelandic NDCs and advances Sustainable Development Goal (SDG) 7 on energy. In the Energy Compact, Iceland commits to increasing ODA funding to support universal access to affordable, reliable, and modern energy services in developing countries. In addition, Iceland will continue to strengthen the integration of renewable energy solutions in its bilateral development co-operation programmes in education, health and water and sanitation. In 2021, Iceland reported that ODA contributions to funds and programmes supporting the implementation of SDG 7 and its targets should reach approximately ISK 614 million and will increase annually, proportionally in line with the increase in overall ODA.
Strategies and policies for systematic integration
Icelandic development co-operation efforts are guided by climate as an integral part of all activities. This, among others, is detailed in Iceland’s Policy for International Development Co-operation for 2019-2023.
Key provisions and pillars
The overall goal of Iceland shall be to reduce poverty and hunger and promote general well-being on the basis of human rights, gender equality, and sustainable development. One of the key priorities is the protection of the earth and sustainable use of natural resources by increasing the resilience of societies and enhancing economic growth on the basis of equality and sustainable use of natural resources, in addition to taking measures against climate change. The main components of this approach are:
increased use of geothermal energy and other renewable energy sources
the protection and sustainable management of the oceans and waters
increasing the resilience and adaptability of societies due to the impacts of climate change
Tracking towards goals is partially completed through a holistic performance management system, via a central database for all support and mechanisms.
Note: “Other environmental markers” include biodiversity, environment and desertification that do not overlap with mitigation and adaptation. Biodiversity-related ODA is integrated in the columns, as well as presented separately for better visibility.
Source: OECD (2021), Creditor Reporting System (database), https://stats.oecd.org/Index.aspx?DataSetCode=crs1
Operational tools for systematic integration
Standard operating procedures for strategic partnerships, such as with private sector partners and CSOs, stipulate that the environment and climate change shall be considered in all work.
All strategies including for climate and environment, as well as terms of reference, are quality assessed in an internal evaluation group.
Monitoring, evaluation and learning frameworks
As environment and climate is mainstreamed into Iceland’s development co-operation, such considerations also apply for monitoring and evaluation efforts, as well as any learning.
As per Section 4.1 of the Evaluation Policy 2020-2023, the environment is defined as a crosscutting issue and shall be addressed in all evaluations, irrespective of whether they are mentioned in underlying project documents.
Supporting national transition plans that are commensurate with international objectives
All Iceland’s activities in partner countries are based on the countries’/districts’ own development plans, including NDCs where applicable. In its current programming, Iceland is placing stronger emphasis on climate aspects, including by supporting districts to develop their own Climate Action Plan, in line with national strategies, and subsequently support climate action.
Examples of projects to support national transition plans
The GRÓ Geothermal Training Programme and the GRÓ Land Restoration Training Programme both support key national institutions to build capacity and work towards respective national energy transition and land degradation and sustainable land management targets.
Implementing the transition to environmentally sustainable, low-emissions and climate-resilient development pathways
Iceland is strongly focused on green and blue development efforts, linking sustainable management of natural resources and ecosystems to improved livelihoods and shared well-being. Strategic focus includes that Iceland will encourage innovation and apply circular economy and nature-based solutions. Iceland will both aim to strengthen institutional mechanisms for environmental sustainability, for instance through local governments, as well as mainstreaming efforts and provide support to dedicated programme components.
Examples of projects in support of environmentally sustainable, low-emissions and climate-resilient transitions
Iceland supports several international partners in developing and implementing sustainable, low-emissions and climate-resilient development pathways. This includes Sustainable Energy for All (SEforALL), International Renewable Energy Agency (IRENA) and the Global Geothermal Alliance, and the World Bank Energy Sector Management Assistance Program (ESMAP). All of these are strong partners in ensuring the transition towards carbon neutrality. In 2020, Iceland entered a new Memorandum of Understanding (MoU) with the UN Environment Programme (UNEP), focusing on geothermal development, gender equality, and land restoration and sustainable land management. Iceland is currently negotiating the terms of a new programme on an ecosystem-based approach to wetlands and forest restoration in Uganda, in co-operation with the Ministry for Water and Environment in Uganda, GRÓ Land Restoration Training Program and UNEP.
With regard to quality infrastructure, Iceland is supporting districts in Malawi and Uganda to electrify schools and healthcare as a part of infrastructure support, while also supporting a number of countries through expert rosters and GRÓ programmes in developing policies and planning for the energy transition (geothermal and hydropower), land restoration, gender equality in e.g., the energy sector, etc.
Responding to the particular needs of SIDS
Iceland, being a small island state, makes Small Island Developing States (SIDS) a natural partner for its development assistance. SIDS have been a major focus for training and capacity building by GRÓ especially in renewable energy and in the blue economy for many years.
Iceland has worked closely with, for example, the Food and Agriculture Organization (FAO) and the World Bank ProBlue programme to support SIDS in adapting and becoming more resilient to climate change.
Examples of projects in support of SIDS’ sustainable development
Iceland has trained a large number of people from SIDS in the Caribbean, the Indian and Pacific in the GRÓ programmes over more than 20 years. Iceland has also worked together with FAO, and local partners with on-site training modules. For example, the GRÓ Geothermal Training Program has run annual training in Central America and East Africa for years. Iceland is also considering SIDS as an emphasis on a renewable energy programme to be launched in 2022.
Iceland is currently seconding an expert to the World Bank, posted in the Pacific with a focus on the blue economy, including energy transition in fisheries. Iceland is also finalising seconding an Icelandic expert to FAO in Rome, working on the blue economy in SIDS, with a focus on sustainable and resilient value chains, among other things.