New Norway gov’t likely to continue climate policy

- level of funding might reduce

A new Conservative government will take power in Norway next month and questions are being raised about the future of the Nordic country’s climate initiative given its almost US$700 million in unspent climate forest aid including to Guyana.

Norway’s opposition Conservatives, promising tax cuts and better healthcare, won elections in a landslide on September 9  and Erna Solberg, 52, will become Norway’s second female prime minister, as well as its first Conservative prime minister since 1990, Reuters reported. Prime Minister Jens Stoltenberg, who has pioneered Norway’s forest initiative since 2007, will step down after eight years and two straight terms in office after his outgoing government presents the 2014 budget on October 14.

Responding to Climate Change (RTCC), a news and analysis website focused on providing the latest updates and insight into global low carbon developments, in a recent article, questioned whether Norway’s climate ambition would continue under Solberg, and was generally optimistic that it would, at least on the international front. It noted that the outgoing government has striven to position Norway as a leader in the international climate policy field, through large financial contributions and an active role in the UN climate negotiations.

“While the composition and political platform of the new government is yet to be negotiated, it seems clear that Norway’s commitment and approach to international climate policy will remain largely unchanged,” it said. “The incoming government will be decidedly more right-wing, but most of the parties that make up the new coalition have supported the same climate policy measures as the outgoing government and only the most right-leaning party contains elements of climate skepticism,” the article noted. “Funding for REDD+ initiatives in countries such as Brazil and Indonesia will continue, while implications for domestic climate policy are more uncertain,” it added.

However, it also noted that the Conservative party, the biggest party in the incoming government alliance, has indicated that they might want to reduce the level of funding, pointing to the fact that large portions of Norway’s contributions to Brazil remain unused in the Brazilian Amazon Fund.

Whether the change in government will lead to changes in domestic climate policy is more difficult to predict, the publication states.

Another publication based in Norway, said that in light of the unspent funds, it remains to be seen whether the new government will have the patience to continue to test the REDD (reduced emissions from deforestation and forestry degradation) model. It said that Norway might be able to continue for a few more years but it is hard to imagine that there is any other country that can afford to sit on that amount of unspent aid money for so long.  It was noted that results are a long time in coming.

Up to the end of June, Guyana had only spent a small portion of the money earned under the forestry partnership and further payments into the World Bank-administered Guyana REDD+ Investment Fund (GRIF) have been halted. The last report from the World Bank said that up to the end of June, Norway had not deposited the US$45 million that Guyana qualified for in 2012 under the two countries’ forests protection plan, into the GRIF.

Director of the Norway’s International Climate and Forest Initiative Per Fredrik Pharo later told Stabroek News that a consensual decision has been made to delay the pay-out while working on improving the financial mechanisms for funding projects.

Norway late last year had announced that it would contribute US$45 million to the GRIF bringing the total contribution from Oslo under the Norway-Guyana climate and forest partnership to US$115 million since 2009. However, the latest report from the World Bank revealed that as of June 30, 2013, cumulative contributions to the GRIF amounted to US$69.8 million – the same as in 2011. Up to that point, based on the GRIF Steering Committee funding decisions, the trustee recorded a total of US$14.4 million in funding decisions and transferred the same amount for projects up to June 30.

The largest transfers were to the Inter-American Development bank (IDB) with US$5.94 million and US$5 million for the Institutional Strengthening Project Micro and Small Enterprise Development Fund project respectively. Funds held in trust as of June 30, 2013 amounted to US$56.2 million.

Guyana has complained of slow disbursements from the GRIF and the two countries are looking to reform the mechanism.  Georgetown and Olso are examining whether the Guyana REDD+ Investment Fund (GRIF) or the IDB should take the lead on funding projects under the Guyana-Norway forests partnership. The GRIF is a fund for the financing of activities identified under the Government of Guyana’s Low Carbon Development Strategy (LCDS).

The fund will receive up to US$250 million from Norway in performance-based payments for the period up until 2017, based on an independent verification of Guyana’s deforestation and forest degradation rates and progress on REDD+ enabling activities.

Other countries involved in forests partnerships with Norway such as Brazil and Indonesia and institutions such as the Forest Carbon Partnership Facility have also experienced slow disbursement of funds.