Integrating Environmental and Climate Action into Development Co-operation

Netherlands

How are development programmes systematically integrating climate and environment objectives post-COVID-19?

Political commitments, strategies and tools

Dutch political commitments

Following the coronavirus (COVID-19) pandemic, the Dutch government has stressed in its statements in the Development Committee the importance of steering multilateral development finance sharply towards green and inclusive recovery and published this request with like-minded partners in The Guardian. In multilateral development banks, the Dutch government calls for climate leadership, full Paris alignment by 2030 and phasing out fossil fuel finance.

In terms of environment/nature more broadly, the Dutch government has set out in a letter to Parliament dated April 2020 how it intends to strengthen its efforts on international biodiversity further. Given both the increasing urgency of biodiversity loss and as a signal to the ongoing negotiations under the Convention on Biological Diversity (CBD), the Government committed to increasing its contribution to international biodiversity as well as to a stronger focus on biodiversity as a crosscutting issue, connecting it more strongly to its efforts on, in particular, climate, water and food security. They are in the process of doing this through including biodiversity more systematically in project development and assessment standards and procedures, among other ways.

Dutch ambitions and support to halt deforestation have intensified since 2020 (letter) as its approach links climate goals with biodiversity goals and the achievement of the Sustainable Development Goals (SDGs). The Netherlands has advocated for an ambitious EU regulation to stop deforestation, in co‑operation with the Amsterdam Declarations Partnership (declaration).

Targets

Since 2010, the Netherlands has realised a year-on-year increase in its climate finance, including both public and mobilised private climate finance. This has been achieved by an allocation of additional resources for climate-specific action (including the establishment a new Dutch Fund on Climate and Development that became operational in 2019), better integration of climate objectives in development co-operation, and a more effective mobilisation of private finance for climate action.

The Netherlands has, among other results, committed to achieving the following targets with respect to climate and the environment:

• to deliver access to renewable energy to 50 million people between 2015 and 2030

• to increase the forest area under sustainable management and increase the number of people benefitting from sustainable forest management

• to increase the number of people benefitting from projects funded by the Netherlands for integrated water resource management and safer deltas by about 3 million per year

• to double the productivity and incomes of 8 million small-scale food producers, the focus of Dutch-supported agriculture projects, by 2030.

Results are monitored and registered on the basis of progress reports of individual programmes. Cumulative results are reported once a year on the Netherlands Development Aid Portal. The actual status of (climate) finance of all climate-relevant programmes is published on the Ministry’s Climate Dashboard.

Strategies and policies for systematic integration

The Netherlands’ support for climate action in developing countries is an integral part of its international co-operation. The policy paper Investing in Global Prospects (Dutch Ministry of Foreign Affairs, 2018) sets out the development and trade agenda, which overall aims to contribute to the achievement of the SDGs and the objectives of the Paris Agreement. Promotion of sustainable inclusive growth and climate action worldwide is one of the four main objectives of that policy.

The Netherlands has integrated climate change objectives in key policies for Climate Diplomacy and its thematic priorities of Water, Sanitation and Hygiene (WASH), Food and Nutrition Security. Its ambition to “green” the instruments for foreign trade and development co-operation in support of the goals of the Paris Agreement and the SDG Agenda has furthermore been set out in a letter, International financing instruments for global prospects, from the Minister for Foreign Trade and Development Co-operation to the House of Representatives in February 2019. To implement this policy, the Government has phased out bilateral financial support for coal and for exploration and development of new oil and gas reserves as of 2020.

As Dutch support for climate action is part of development co-operation, the Netherlands has a strong focus on poverty. Poorer people and communities are typically affected the most by climate change, not only because they are often the most exposed but also because they have the least resources to cope and adapt. To support mitigation, the Netherlands focusses on providing access to renewable energy and on halting deforestation. To support adaptation, it focusses on climate-smart agriculture, integrated water resource management and the provision of climate-resilient water, sanitation and hygiene services. Resilience and adaptability of communities are also supported by the new strategic partnership, Amplifying Voices. Gender is an important crosscutting issue, as climate action is most effective when it builds on the capacities and addresses the needs as well as the vulnerabilities of both genders.

Key provisions and pillars

The Netherlands’ policy for Foreign Trade and International Co-operation, presented and adopted in 2018, addresses, in particular, the following major elements:

• Intensifying the Netherlands’ contribution to international climate finance with EUR 80 million per year.

• Making official development assistance (ODA) more climate-relevant.

• Establishing the Dutch Fund for Climate and Development (DFCD) aimed at financing and mobilising private investments, in particular, in climate adaptation projects in developing countries.

• Providing support to the Green Climate Fund (GCF) and the Global Environment Facility (GEF).

• Intensifying its support for various capacity-building and knowledge-development initiatives, such as the NDC Partnership and the Climate and Development Knowledge Network (CDKN).

• Providing support to various programmes, including the Energizing Development Program (EnDev) with the aim of helping 50 million people in developing countries gain access to renewable energy by 2030.

• Providing support to international initiatives such as the EU FLEGT (Forest Law Enforcement, Governance and Trade) and EU REDD+ (Reducing Emissions from Deforestation and Forest Degradation) to combat deforestation and offer (small) farmers a new economic perspective.

• Increasing the focus on the integration of gender and biodiversity considerations in activities focussed on climate, water and food security.

• Ensuring investments for Forest Conservation and Forest Restoration are doubled to at least EUR 25 million per year (letter). Key provisions and pillars of this letter are:

  • increased forest diplomacy and policy influence

  • support multi-stakeholder processes

  • strengthen forest governance

  • increase private finance for forest conservation

  • support developing countries to conserve their forests.

The total of these measures resulted in an increase of public climate funding to EUR 596 million in 2020 from an expected EUR 400 million in 2018.

Box 1. Creditor reporting system’s environmental and climate markers

Figure 1. Netherlands’s integration of climate objectives

Note: “Other environmental markers” include biodiversity, environment and desertification that do not overlap with mitigation and adaptation. Biodiversity-related ODA is integrated in the columns, as well as presented separately for better visibility.

Source: OECD (2021), Creditor Reporting System (database), https://stats.oecd.org/Index.aspx?DataSetCode=crs1

Operational tools for systematic integration

The Netherlands Ministry of Foreign Trade and Development Co-operation, responsible for the programming and planning of climate finance, promotes the integration of climate change considerations in its Annual Pitch and Bids for Climate Change Action, the Multi-annual Strategic Plans of Central Departments and Missions, and in the projects and programmes that it supports.

When developing and appraising new programmes, concerned policy officers are required to assess climate and biodiversity relevance, consider these in context and problem analyses and Theories of Change (ToCs), allocate and score all Rio Markers, and where relevant, monitor and report on the progress of climate/environment-specific indicators contained in the Ministries’ Thematic Result Frameworks.

For these purposes, the Ministry has adapted their project intake and assessment forms and designed a number of practical tools, including guidelines and climate change profiles. A Climate Mainstreaming Toolbox provides easy access and/or links to both internal as well as other relevant (e.g. OECD) reports, guidelines, country climate profiles, etc. Staff awareness and knowledge is enhanced through ad hoc training and orientation sessions and an online training course.

More specifically, the Ministry also developed an internal framework instruction for greening multilateral development banks (dated 14 February 2020) and A Quick Reference Guide for Integrating Gender Equality in Climate-smart Development.

Monitoring, evaluation and learning frameworks

Ministry-level Theories of Change and Result Frameworks integrating environment and climate objectives exist, and are referred to in the development, assessment and/or monitoring of programmes supported by the Ministry of Foreign Affairs. Comprehensive, integrated, monitoring, evaluation and learning (MEL) frameworks for the different thematic areas are currently still under review/development.

An in-depth evaluation of climate finance in the period 2010-19 was carried out and published by the Evaluation Department in 2021. The report, among others, presented some 32 recommendations for the new government’s consideration (Policy and Operations Evaluation Department (IOB) Report: Evaluation Dutch Climate Finance for Development). This study on climate finance is the first in a set of IOB studies to review Dutch climate policy, with a focus on development co-operation. It will inform the Ministry of Foreign Affairs, in particular the Minister for Foreign Trade and Development Co-operation and the Inclusive Green Growth Department, in view of future decision making on new policies and programming.

How are development programmes supporting country-owned transitions to environmentally sustainable, low-emissions and climate-resilient development pathways?

Supporting national transition plans that are commensurate with international objectives

Dutch public climate finance is first and foremost intended to assist poor communities and countries. To address their needs, the Netherlands works with a multitude of actors, including national, regional and local authorities, multilateral organisations, non-governmental organisations, private-sector organisations, farmers’ organisations, water boards, and so on. These organisations all have their own processes to ensure that their activities meet the needs of their target populations. The Netherlands only approves finance for activities if it is clear how they will meet the needs of target populations.

For the countries and regions on which the Netherlands focuses its development co-operation, climate change profiles have been drafted and are regularly updated. These profiles contain an overview of country-specific climate change impacts as well as relevant policies and strategies of each national government. They are used to guide the integration of climate action in their development co-operation programmes in these countries.

Support for technology transfer and for capacity building is an integral part of many activities that the Netherlands supports. Capacity-building support is focused on individuals, institutions as well as at the systemic level. At the systemic level, the Netherlands supports the NDC Partnership, which has a key role to play in building the capacity of governments to formulate and implement enhanced Nationally Determined Contributions (NDCs). As co-chair in 2019 and 2020, the Netherlands focused on the further strengthening of the NDC Partnership through political and financial support.

The Netherlands has contributed financial resources to green recovery support through the NDC Partnership and the Climate Investment Funds Technical Assistance Facility (CIF TA) window for green, resilient and inclusive recovery.

Examples of projects to support national transition plans

As indicated above, the leading role played in and technical and financial support provided through the NDC Partnership is an important example of Dutch support for the development of national strategies in partner countries. Through the NDC Partnership, partner countries are supported with increased access to the resources, expertise and tools they need to develop and implement their NDCs and combat climate change.

Implementing the transition to environmentally sustainable, low-emissions and climate-resilient development pathways

The Netherlands believes that the climate challenge can only be resolved through an effective collaboration between all relevant social actors, each of which has a unique role to play. The climate interventions of the Netherlands works with alliances with the private sector, knowledge institutes/networks, non-governmental organisations (NGOs) and multilateral organisations.

The multilateral architecture is key in the creation of an effective mix of climate finance delivery instruments. The Netherlands has traditionally been an active supporter and funder of the multilateral institutions, which play an increasingly important role in climate action. The Netherlands also contributes to climate change-specific multilateral funds.

The action, knowledge and financial resources of the private sector and knowledge institutes are also necessary to succeed in the transformative change required for low-emissions, climate-resilient development. The Netherlands has thus set up a number of collaborations with the private sector focusing on climate-smart infrastructure, water, food systems and energy. Increasingly, it has also approached such challenges in an integrated manner, for instance in the newly established Dutch Fund on Climate and Development.

The Netherlands also works closely with civil society in implementing its climate-related activities. Civil society offers the creativity, access and mobilising power to address complex challenges like climate change. Through the Power of Voices programme, various new collaborations and partnerships with civil society organisations have launched in early 2021 to strengthen their advocacy and promote climate-resilient pathways that are both just and locally led.

All infrastructure projects are required to be subjected to and present an elaborate Environmental and Social Impact Assessment (ESIA). In the case of a negative outcome, and no mitigating measures can be taken, the project will not be approved.

The Dutch government has phased out bilateral financial support for coal, and for exploration and development of new oil and gas reserves as of 2020.

Support for sustainable, quality infrastructure

At the moment, the Ministry of Foreign Affairs is in the process of extending two of its main infrastructure programmes (Develop2Build and Development Related Infrastructure Investment Vehicle - DRIVE). The new phases will contain a more extensive greening component for which additional finance will also be made available.

Examples of projects in support of environmentally sustainable, low-emissions and climate-resilient transitions

Important commitments made include:

• EUR 120 million contribution to the Green Climate Fund for the period 2020-23.  

• EUR 55 million contribution to the Least Developed Countries Fund (LDCF) for the period 2018-22. 

• EUR 83.6 million contribution to the Global Environment Fund (GEF-7) for the period 2018-22. 

• USD 10 million to the Climate Investment Funds (CIF) for the 2021 COVID-19 TA Response Initiative for green and resilient economic recovery. 

• EUR 10.9 million for the NDC Partnership, including its Climate Action Enhancement Package, for the period 2018-20. 

• EUR 160 million to the Dutch Fund for Climate and Development for the period 2019-24. The Fund aims to attract and deploy public and private capital in well-designed and impactful climate-relevant projects, in particular for climate adaptation. 

• EUR 15 million to the Central African Forest Initiative supporting Central African countries with high forest cover to implement the Paris Agreement on Climate Change, fight poverty and fulfil the post-2020 biodiversity framework. 

• EUR 29 million to IDH (The Sustainable Trade Initiative) to support the development of sustainable landscapes (natural resource base linked to agri-value chains). 

• EUR 38.5 million to the World Bank’s Regional Off-grid Electrification Project in the Sahel for the period 2019-26. 

• EUR 35.6 million for the AGRI3 Fund for the period 2020-39. The Fund aims to provide guarantees to commercial banks and other financial institutions to mobilise financing by de-risking and catalysing transactions that create sustainable, deforestation-free agricultural supply chains. 

• A total of about EUR 220 million to strengthen civil society organisations active in lobby and advocacy in the areas of climate (justice), nature, biodiversity and sustainable/resilient WASH and food security. 

On top of these large commitments, the Netherlands supports innovative, interdisciplinary initiatives such as the Global Innovation Lab on Climate Finance, the Climate and Development Knowledge Network and the Mobilising More for Climate programme. 

How are development programmes supporting SIDS to achieve sustainable development?

Responding to the particular needs of SIDS

Support for Small Island Developing States (SIDS) is channelled through contributions to multilateral climate funds.  

Geographical focus is on the focus regions in the Dutch development co-operation and on river basins in Africa and the Middle East. In addition, the Netherlands supports a scholarship programme for SIDS to strengthen their capacity in the water sector to cope with the effects of climate change. The IHE Delft Institute for Water Education supports capacity building in the water sector in developing countries through education, research and partnerships (knowledge networking) programmes. Climate change is an integral part the programmes.  

Supporting SIDS’ access to finance

The Netherlands did not report activities in this area.