Climate finance


Denmark provides and mobilizes climate finance from public, private and alternative sources to support mitigation and adaptation action in developing countries.

Climate finance and the Paris Agreement

To reach the long-term goals of the Paris Agreement, it is necessary to mobilize financial resources to support the green transition globally. With the Paris Agreement, Parties agreed to a long-term goal of making global financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development. This sends a strong signal about the global orientation towards sustainable financial development and emphasizes the importance of mobilizing both public and private financing for climate-related investments in order to reach the goals of the Paris Agreement.

At COP21 in Paris, developed countries confirmed their commitment to mobilize 100 billion USD annually from 2020 to 2025 from public and private sources to support climate action in developing countries. Developed countries have since then continued to confirm their commitments and increasingly mobilize climate finance. The EU, including Denmark, is the largest contributor of public climate finance globally with a contribution of 23.2 billion Euro in 2019. Beyond finance, Denmark and the EU play a key role in assisting developing countries in translating their climate objectives into specific projects, through technological support and capacity building instruments. At COP21, Parties also agreed to set a new climate finance goal for the period after 2025. Deliberations on this new climate finance goal will begin at COP26 in Glasgow.

Climate finance in bi- and multilateral cooperation

Denmark has a strong focus on assisting large emerging economies in their transition to sustainable development by sharing Danish experience, expertise and technology. Denmark has established bilateral cooperation in the field of energy and climate with several emerging economies, including China, Mexico, Vietnam and India, with a focus on advancing favorable regulatory environments and robust framework conditions, which are important conditions for attracting private climate finance.

This work is supported by multilateral organizations such as the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA) and the Organisation for Economic Co-operation and Development (OECD). Furthermore, Denmark is involved in the promotion of more favorable investment conditions through engagement in cross-disciplinary initiatives, such as phasing out subsidies for fossil fuels.

Climate finance for funds and initiatives

Denmark provides advisory services for developing countries in planning, developing and implementing ambitious climate projects, which are in line with national climate and development plans. Support is partly provided through multilateral climate funds, which are part of a broader established climate finance architecture containing The Green Climate Fund (GCF), the Least Developed Countries Fund (LDCF) and Climate Technology Centre & Network (CTCN). Support is also provided to selected funds and initiatives with focus on specific issue areas. Among these are the Global Partnership Fund (GCPF) and Sustainable Energy for All (SE4All).

New and innovative solutions

Part of the Danish support for financing initiatives and instruments aims at breaking down barriers to private investments in climate projects.

Initiatives include the public-private partnership initiative Partnering for Green Growth and the Global Goals 2030 (P4G) which seeks to foster partnerships at scale among businesses, governments and civil societies to deliver on the SDGs and the Paris Agreement. It also includes the Danish Climate Investment Fund and its follow-up, the Danish SDG Investment Fund, both administered by the Investment Fund for Developing Countries (IFU) and both focused on blending public and private finance to increase investments in commercial climate projects in developing countries. The Climate Investment Coalition is another public-private partnership – it builds on the pledge to invest an additional 350 billion DKK in climate-related investments towards 2030, made by Danish pension funds in 2019, and aims to mobilize increased private investment and finance from institutional investors globally.

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