Norway pledges $300 million/year to green world's power
(Published by Thomson Reuters Point Carbon)
Norway will spend NOK 1.8 billion ($300 million) a year to devise ways to help some of the world's poorest people get better access to energy and to develop a new market-based system to limit emissions from global energy production, a foreign ministry official said Wednesday.
The Nordic nation expects to launch a plan by June that will see several richer states give money to nine poor countries to invest in new and more efficient power plants.
The government hopes the scheme will be eventually used as a worldwide example for attracting private sector cash via a new type of carbon market.
The Energy+ Partnership will see Norway, UK, France, Denmark, Switzerland, Netherlands and South Korea give money to Bhutan, Ethiopia, Kenya, Liberia, Maldives, Morocco, Nepal, Senegal and Tanzania.
The cash will depend on how well the recipient countries can prove they are increasing public access to energy while cutting greenhouse gas emissions compared to unchecked levels, according to a policy document seen by Point Carbon News.
Norway has already started working with Ethiopia and the Maldives, and in February will meet with officials from Kenya and Liberia, said Terje Kronen, an official from Norway's Ministry of Foreign Affairs.
"We are also looking into (including) India and South Africa (as recipients)," he said, adding that rich countries will source cash from their overseas aid budgets rather than use money pledged under the U.N. to help poor nations limit emissions and tackle the effects of climate change.
The Energy+ Partnership is due to be launched at the Rio+20 summit in June, where world leaders will discuss global measures to provide universal access to energy - a goal the International Energy Agency said will cost at least $48 billion a year.
Norway, whose vast offshore oil reserves have helped it to become one of the world's richest countries, wants the effort to mirror the REDD+ Partnership on halting deforestation in the developing world.
The Energy+ plan is intended to help drive efforts to reduce greenhouse gas emissions in developing countries, where renewable energy and energy efficiency measures account for around 9 percent of worldwide abatement potential.
The policy document said Energy+ cash will help the poorer countries develop the energy section of their country-wide U.N. pledges to cut emissions, known as Nationally Appropriate Mitigation Actions.
It will also develop practical examples "in establishing new carbon markets."
Last month's U.N. climate negotiations in Durban opened the door for the emergence of several new carbon market mechanisms, but investors expect little progress on them without more government backing.
Governments want to drive deeper emissions reductions by developing new markets across entire sectors rather than the existing project-by-project approaches in the U.N's Clean Development Mechanism (CDM) and Joint Implementation.
Norway's Kronen insists that finance from hosting CDM offset projects can still be used to develop cleaner energy sources alongside Energy+ cash.
"Many partner developing countries see results-based financing of reduced/avoided GHG emissions as a new and better way to benefit from climate financing," said Norway's Kronen.
He added that some of these countries had been able to develop very few CDM projects and saw the costs involved as too high for too small a result.