NDF at COP27: Questions & Answers

 

What is the COP process about?

The UN Climate Conference, officially called the ‘Conference of the Parties to the United Nations Framework Convention on Climate Change’ has taken place every year since 1995. The annual summits are an important space for stakeholders to discuss the climate crisis on a global level. These annual conferences bring together those that have signed the United Nations Framework Convention on Climate Change (UNFCCC), in which every UN member state come together to find solutions.  Effectively every nation, country, or state in the world is involved, giving a total of 197 signatory parties. In addition, NGOs (non-governmental organisations) and IGOs (inter-governmental organisations) with observer status to the UNFCCC are eligible to attend.

This year, from 6 to 18 November, Heads of State, Ministers and negotiators, along with climate activists, mayors, civil society representatives and CEOs will meet in the Egyptian coastal city of Sharm El-Sheikh for the largest annual gathering on climate action.

The 27th UN Climate Conference will build on the outcomes of COP26 in Glasgow to deliver action on an array of issues critical to tackling the climate emergency – from urgently reducing greenhouse gas emissions, building resilience and adapting to the inevitable impacts of climate change, to delivering on the commitments to finance climate action in developing countries. 

Faced with a growing energy and food crisis, record greenhouse gas concentrations, and increasing extreme weather events, COP27 seeks renewed solidarity between countries, to deliver on the Paris Agreement. This year will also mark 30 years since the UNFCCC was adopted and seven years since the Paris Agreement was agreed at COP21.

With the strapline, ‘Together for implementation,’ COP27 is seen as the ‘African COP’ in reference to its location as well as the expectation that African countries’ exposure to some of the most severe impacts of climate change will be at the front and centre of the discussion.

What are the expectations with COP27?

In Glasgow (COP26), Parties reaffirmed the long-term global goal under the Convention, and the temperature limitation goal of the Paris Agreement, and recognized that urgent action needs to be taken to keep the 1.5-degree target within reach, a call confirmed by the latest Intergovernmental Panel on Climate Change (IPCC) report.

Furthermore, Parties and stakeholders confirmed the importance and priority of aadaptation and rresilience for all countries and communities, particularly in developing countries. IPCC reports highlight that the world is not on track to deal with current climate impacts and is not prepared to deal with the increasing number and magnitude of climate change induced impacts.

The COP26 outcomes also highlighted the centrality of urgently scaling up support, including appropriate finance, capacity building and technology transfer. Priorities were also to enhance adaptive capacity, strengthen resilience and reduce vulnerability to climate change in line with the best available science, considering the priorities and needs of developing countries.

COP27 is a critical summit for global climate action. To have a chance of limiting warming to 1.5 degrees, global emissions must halve by 2030 and reach net-zero level by 2050. While Glasgow needed to show that 1.5 degrees can be kept within reach in a credible way, Egypt needs to show the way from commitments to action.

The 2021 IPCC report states clearly that it is still possible to achieve the 1.5-degree-target but only if clear action is taken now. In addition to accelerating the emission reductions globally, Glasgow also needs to be the moment when adaptation needs and responses are taken seriously at scale.

A successful outcome in Egypt also requires developed countries to make clear steps towards the promise they made back in 2009 of mobilizing $100 billion per year by 2020 to support climate action in developing countries. It is clear the goal has not been met.

Governments cannot achieve this alone. Therefore, there is an urgent need to create bankable, adaptation investment opportunities in developing countries that will attract private investment and help shift global investment trends. Equally important is a successful, broad-based development of the enabling environment without which investments will not take place at scale.

Strengthening the ability to adapt to climate change impacts is thus another important element of COP27, as is the question of how to deal with economic and non-economic harms caused by climate change impacts which cannot be avoided through adaptation or mitigation, known as ‘loss and damage’. Significant progress is expected of COP27.

The IPCC report is a wakeup call. It has a clear message: the window for action is narrow. Despite this, the report also provides hope and underscores that the technological and financial tools already exist to slow down the negative trajectory. The most important message is that action needs to happen now and that expression of solidarity to those impacted hardest are meaningless unless coupled with concrete and sufficient action. 

In summary, a successful outcome of COP27 requires most importantly significant progress on measures to deal with the impacts of climate change, materialisation of the promised level – and above - of financing for these measures, as well as a step-up in the implementation pace of such measures. This requires a clear and visibly demonstrated increase in solidarity and collaboration.

Why is NDF participating?

COP27 convenes up to 200 delegations from different countries. In addition to the official negotiations the event is an important forum for the broad spectrum of leaders, institutions, organisations, activists, and other stakeholders working with climate change -related topics. This makes it an important event for NDF as a forum for outreach, partnership building and knowledge sharing.

Through participation in the various events, discussions and meetings, NDF seeks to create visibility around NDF as an action-oriented climate finance actor to provide financing for projects and investments focusing on the nexus between climate change and development.

In addition, NDF seeks to promote solutions for identified climate change and development problems through showcasing its previous experience, through discussing new initiatives with existing and new partners at the conference site, and through continued discussions going forward. NDF is a concrete tool of the Nordic countries to support lower income countries in climate change adaptation and mitigation needs.

What are the expected outcomes for NDF?

At COP27, NDF will highlight the critical focus on adaptation action in the most vulnerable countries, and the role of flexible, early-stage climate financing that will make solutions reality.

Through various events, NDF will draw attention to the important role of multilateral institutions bringing together both public and private financiers. We will also highlight the critical role of reliable climate data for effective planning and implementation of climate action. In all our action, we promote key Nordic values, such as gender equality, non-discrimination, and transparency. 

Through organising events at the Nordic Pavilion, and by participating in other events, discussions, and meetings, NDF aims to raise awareness around NDF’s work and to reach out to existing and new partners for continued and new collaboration for effective and efficient implementation, as well as to keep abreast with the global climate and development agenda more broadly. 

How can NDF contribute to a successful outcome of COP27?

NDF provides financing to both mitigation and adaptation activities within the nexus of climate change and development in lower-income countries. With its latest capital injection, NDF is an action-focused tool of the Nordic countries to support the goals of the Paris Agreement and to accelerate transformative climate action in the countries and among the populations that are most vulnerable. NDF supports the global agenda and shows Nordic leadership through its clear focus, its global partnerships, and its flexible financing toolbox.

NDF supports adaptation through a wide range of activities that will enhance the ability of partner countries to respond to climate change-related issues such as sea level rise, storms, floods, and drought, and threats to water resources, health, infrastructure, agriculture, and food security. Social impacts are particularly relevant regarding adaptation as the poor and generally disadvantaged tend to be the most vulnerable to the adverse impacts of climate change.

NDF also provides financing to projects mitigating climate change through supporting a more competitive low-carbon economy that makes efficient, sustainable use of resources, including reduction of greenhouse gases, improvement of energy efficiency, promotion of added renewable energy capacity and efficient smart electricity grids, fossil-free transport systems, carbon sequestration, waste minimisation and recycling. Also, adaptation and mitigation projects often have significant co-benefits which should not be overlooked.

Through its financing, NDF provides different kinds of solutions for the financing of nationally prioritised projects implemented by public sector entities, especially the multilateral development banks in the focus countries. NDF co-finances projects in the public sector through grants and concessionary loans with the goal of validating the project's concept and leveraging financing from other sources. In addition, NDF identifies financing opportunities and acts as a matchmaker between the public and private sectors to help raise capital for demonstrably viable and scalable initiatives.

NDF’s approach to private sector operations recognises the central role of private sector actors and stakeholders in achieving the global climate and development goals determined in the Paris Agreement and the Sustainable Development Goals. This approach highlights the private sector as an essential source of innovation, cutting-edge solutions, efficient interventions, and market development. In this context, a guiding principle is that private sector companies, such as technology providers and project developers, play an important role in leading the transition of developing countries towards green, resilient, and sustainable economies and societies.

Making the private sector actors more resilient for climate change, regardless of their business focus, is of equally big importance in strengthening the overall resilience of economies. By supporting initiatives and partnerships between the public and private sector, by offering flexible financing and risk sharing mechanisms, and by focusing on a broad-based development of the enabling environment, NDF strengthens these transformational processes.

NDF strives to increase the probability that innovative early-stage climate and development projects, in a planning or pilot stage, will be validated, developed, and tested to a point where they can draw financing for scale-up from public or commercial sources. By creating a larger pipeline of effectively designed and implemented early-stage projects, NDF seeks to increase the number and effectiveness of large-scale and highly replicable climate and development solutions.

NDF strives to enable and catalyse financing from the public and private sectors for climate and development impact. By increasing the number of projects that receive scale-up financing and improving leverage ratios to create a larger volume of climate finance, NDF facilitates the more widespread creation of climate and development solutions capable of delivering inclusive and climate-friendly development.

These activities together contribute not only to the outcome of COP27, but also to a long-term green and resilient trajectory in line with the broader development agenda.

What are NDF’s key messages in COP?

The Nordic countries have ambitious climate goals and we strongly believe that we can do more by working together. NDF is an action-focused tool of the Nordic countries to support the goals of the Paris Agreement and to accelerate transformative climate action in the countries and among the populations that are most vulnerable.

NDF supports the global agenda and shows Nordic leadership through its clear focus, its global partnerships, and its flexible financing toolbox.

NDF puts emphasis on the need to act now, provide concrete support to design, launch and scale-up of prioritised interventions. Furthermore, NDF emphasises the importance to provide co-financing in collaboration with strategic partners in a way that the collaboration amplifies the strengths of each contributing partner resulting in an impact which is larger than the sum of the financing provided.

The Nordic countries have joined forces since 2015 at COP Conferences to create dialogue and knowledge sharing on climate solutions and challenges. With a large number of events, the Nordic Pavilion at COP27 in Egypt covers a wide range of topics on climate change and solutions. NDF is an integral part of the Nordic pavilion and contributes through events on topics that are of particular interest given the purpose and strategy of NDF.

NDF puts emphasis on the need to act now. It provides concrete support to design, launch and scale-up of prioritised interventions. Furthermore, NDF emphasises the importance to provide co-financing in collaboration with strategic partners in a way that the collaboration amplifies the strengths of each contributing partner resulting in an impact which is larger than the sum of the financing provided.