Norway Launches Initiative to Cut Emissions in Developing Countries
News story | Date: 19/11/2024 | Ministry of Climate and Environment
Norway will use up to US$740 million under the Paris Agreement Article 6 to contribute to emission reductions and green growth in developing countries.
Through a new initiative, Norway will enter into agreements with four new countries and establish a new fund.
“This effort will bring us one step closer to achieving the temperature target of the Paris Agreement. We will cut greenhouse gas emissions at home, and there is also a great need to fund emission reductions in other countries,” said Prime Minister Jonas Gahr Støre.
Norwegian Global Emission Reduction Initiative
In addition to achieving the NDC target under the Paris Agreement, Norway will contribute to emission reductions in other countries. The emission reductions from the Initiative will help Norway become climate neutral (see box 1). Article 6 of the Paris Agreement allows countries to cooperate on reducing greenhouse gas emissions. This is also known as carbon trading. Carbon credits can be traded between countries, but the goal is also for private actors to contribute more.
At the UN Climate Change Conference in Baku, the Norwegian government launched a new initiative to strengthen Norway’s international cooperation on emission cuts and mobilize more private capital. The Norwegian Global Emission Reduction (NOGER) Initiative will, among other things, support the expansion of renewable energy and the phasing out of fossil fuel subsidies.
“Choosing green solutions is costly, and many countries lack financing. We know we need to do more. By supporting renewable energy projects in developing countries, we reduce global emissions,” said Norwegian Minister of Climate and Environment Tore O. Sandvik.
Total budget US$740 million
The Norwegian Parliament authorized the use of up to about US$740 million, 8.2 billion Norwegian kroner, for the work under the NOGER Initiative in the 2024 state budget. This means the government can enter into contracts for emission reductions up to this amount. The government has proposed to extend the authorization in the budget proposal for 2025.
Through the NOGER Initiative, Norway is signing agreements with Benin, Jordan, Senegal, and Zambia in Baku.
“Cooperation under Article 6 has the potential to trigger large investments from the private sector. The world needs new initiatives that can help improve market conditions and secure the needed financing for green solutions and emission reductions,” said Minister of Green Economy and Environment Mike Mposha from Zambia.
In addition, a new fund of up to US$100 million is being established in collaboration with the Global Green Growth Institute (GGGI). The fund will assist Norway in developing programs and managing payments when emission reductions are achieved. There are also plans to establish a cooperation with the Asian Development Bank up to US$50 million in 2025.The initiative will also work to scale up private investments in measures that cut emissions.
“I hope the initiative can help mobilize more private money into climate mitigation efforts,” said Norwegian Minister of Climate and Environment Tore O. Sandvik.
Strict requirements
The collaborations Norway enters into will finance climate policies and measures that the host countries cannot do on their own. Norway has extensive experience from this type of cooperation with other countries, including under the Kyoto Protocol from 2008 to 2020.
The NOGER Initiative sets strict requirements that the activities must represent real and verifiable emission reductions. Norway will only pay for emission cuts that have been verified by an independent third party. Cooperation will also be subject to safeguards against corruption and human rights violations.
- The carbon credits can help Norway become climate neutral from 2030, as per decision 897 in 2015–2016 by the Norwegian Parliament.
- In coming years carbon trading will help accelerate the green transition in developing countries.
- The emission reductions can be used to cover any shortfall in meeting Norway’s 2030 target under the Paris Agreement, in a situation where EU cooperation does not fully achieve a 55 percent reduction in emissions.
- All countries, including developing countries, have submitted national climate targets under the Paris Agreement.
- Article 6 of the Paris Agreement allows countries to voluntarily cooperate on reducing emissions, which can then be transferred between countries to meet mitigation targets. This is also known as carbon trading. Article 6.2 regulates cooperation between countries.
- A carbon credit is a license that represents the verified reduction of one ton of CO2.
- To trade emission reductions, Article 6 has strict rules to ensure that emissions are not counted twice. When a credit is transferred to a buyer country, the seller country must adjust its accounting so that the emission reductions are only counted towards one climate target.
- Financing of emission reductions for carbon credits under the Paris Agreement Article 6 does not count as official development assistance.
- Cooperation under Article 6 of the Paris Agreement can accelerate the green transition in developing countries and ensure that limited funds for climate action achieve the greatest possible climate impact.
- There is currently an unregulated international market where companies and organizations can buy carbon credits. There have been significant challenges related to the quality of many of these credits. Article 6.4 of the Paris Agreement establishes a mechanism that in the future can also be used by private actors to buy UN-approved carbon credits.
The launch of the initiative will be streamed at Norden.org.
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