The Danish Climate Envelope
The Danish Government has allocated 500 million DKK (67 million euro) to the Climate Envelope in 2013 with the aim of assisting developing countries with the transition to low carbon economies and preparing to enter into a new global climate agreement. Denmark is thereby increasing its international climate finance contribution with 25 pct. compared to the annual level of the "Fast Start Finance" from 2010 – 2012 (app. 54 million euro annually).
The Danish climate finance in 2013 will focus on bilateral and multilateral climate activities in the poorest and most vulnerable countries that are most severely affected by climate change as well as mitigation activities in the so called emerging economies with rising emissions and large mitigation potentials. Denmark seeks to strike a balance between funding for adaptation and mitigation purposes.
The funds are administered by the Danish Ministry of Foreign Affairs, but the allocation suggestions are prepared by the Ministry of Foreign Affairs and the Ministry of Energy, Utilities and Climate in a joint effort followed by approval by the Danish Government.
In 2013 initiatives initiated by the Ministry of Energy, Utilities and Climate will be directed towards the implementation of UNFCCC-decisions as well as “on-the-ground” activities in selected emerging economies. Focus will be on reform efforts in the field of fossil fuel subsidies and enhanced efforts in the field of energy efficiency, two areas with very significant cost-effective opportunities to reduce emissions.
An important cross cutting priority is the leverage of private climate finance. In 2012, Denmark created a climate fund to attract institutional investors. In 2012, 100 million DKK were allocated to the fund, and another 125 million DKK are planned to be allocated in 2013.
Denmark has also pledged to contribute 100 million DKK (13.5 million euro) to the Green Climate Fund when it becomes operational.
The Climate Envelope 2013 is a continuation of the Danish Fast Start Finance (2010-2012). All of the Fast Start Finance contributions are grants and all the money has been allocated, programmed and approved. In 2012, Denmark allocated 46 pct. of the funds to adaptation and 54 pct. to mitigation.
Denmark is mainstreaming the prevention of the negative impacts of climate change into its bilateral programmes. When counting also these additional efforts, Denmark is providing in the range of 200 million USD per year to climate relevant activities according to Danish Ministry of Foreign Affairs.
The Danish Climate Envelope 2010 – 2012
With the Copenhagen Accord agreed at COP15 in Copenhagen in 2009, the developed countries committed to provide 30 billion USD for the period 2010-2012 as start-up funding for the developing countries for climate adaptation, emission mitigation, capacity building, technology, and forests. The Climate Envelope represents the Danish contribution and amounts to 1.2 billion DKK. The funds were allocated with respectively 300 million DKK in 2010, 400 million DKK in 2011, and 500 million DKK in 2012. The total EU Fast Start Finance amounts to 7.2 billion Euro.