Integrating Environmental and Climate Action into Development Co-operation

Canada

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

Political commitments, strategies and tools

Canada’s political commitments

As articulated in the Speech from the Throne 2020 and Canada’s Federal Budget 2021, promoting a cleaner environment, climate action and a green economy is a core priority for Canada. This is also reflected in Canada’s commitments to combat climate change and biodiversity loss around the world.

At the 2021 G7 Leaders’ Summit, Canada announced a doubling of its international climate finance commitment, to CAD 5.3 billion over the next five years. This will help reach the collective goal of mobilising USD 100 billion annually in climate finance by 2025. Canada also endorsed the G7 2030 Nature Compact and its objective of halting and reversing biodiversity loss by 2030. It includes ensuring that international assistance does no harm to nature and delivers positive outcomes overall for people, climate and nature as part of its commitment and contributions to net-zero by 2050 and nature positive by 2030.

Targets

Canada’s International Climate Finance is a flagship programme leading efforts on promoting low-carbon and climate-resilient economies and societies in developing countries. At the 2021 G7 Leaders’ Summit, Canada announced a doubling of its international climate finance commitment, to CAD 5.3 billion over the next five years, which includes increased funds for adaptation and biodiversity. The Government of Canada also increased its grant contributions of climate financing up to 40%, from 30% previously. These commitments are tracked at the project level and Canada will continue to publish progress regularly in annual reports and on Canada’s Climate Finance webpage.

Canada tracks three key indicators related to environment and climate action in its development assistance, which are:

• number of people newly employed in the environment sector, including in technical, supervisory and management roles (Sustainable Development Goal [SDG] 13)

• number of beneficiaries from climate adaptation projects (SDG 13.1)

• mega tonnes of greenhouse gas emissions reduced or avoided (SDG 13).

Progress is shared in annual publications, such as the Report to Parliament on the Government of Canada’s International Assistance. 

Strategies and policies for systematic integration

Environment and climate action is one of six priorities under Canada’s Feminist International Assistance Policy (FIAP). Canada focuses its Environment and Climate Action Area efforts on three paths to action: 1) strengthening environmental governance and enhancing women’s participation in decision making; 2) investing in low-carbon and climate-resilient economies; 3) developing environmental practices that support healthy, resilient, adaptive communities.

The Environment and Climate Action Area Policy also guides the mainstreaming of environment and climate change considerations in all sectors of Canadian international assistance programming to ensure its environmental sustainability through an Environmental Integration Process (EIP). This process ensures not only that international assistance efforts do not harm the environment, but also that environmental degradation does not erode development gains and that opportunities linked to environment, climate change and natural resource management are identified and seized.  

The 2020-2023 Departmental Sustainable Development Strategy supports the Federal Sustainable Development Strategy (FSDS) as required by the Federal Sustainable Development Act. Global Affairs Canada supports the goals laid out in the FSDS through the activities described in this Departmental Sustainable Development Strategy (DSDS). Through the DSDS, Global Affairs Canada contributes to the achievement of three goals of the 201‑22 FSDS:

• greening government

• effective action on climate change

• clean growth.

Key provisions and pillars

In Canada’s FIAP, the main components of the Environment and Climate Action Area policy are:

• Path 1. Strengthening environmental governance and enhancing women’s participation in decision-making: Canada’s objective in this path is to support government institutions and international organisations’ efforts to develop, finance, implement and enforce strong environment-related and environmentally sensitive diplomacy, laws, policies, plans, frameworks and services. This path will have a strategic focus on engaging representatives of the private sector and civil society, particularly women and vulnerable people, as active leaders and participants. This approach supports evidence-based decision making grounded in reliable environmental data and analysis.

• Path 2. Investing in low-carbon and climate-resilient economies: Canada’s objective in this path is to promote the transition toward low-carbon and climate-resilient economies. This goal will be pursued by working with a full range of financial partners, as well as think tanks, universities and civil society, to increase investment and business opportunities and enhance livelihoods, including for women and vulnerable people, in low-carbon, clean-growth sectors. Canada will aim to improve access to, and the availability of, gender-responsive financing for climate change mitigation and adaptation initiatives, and of innovative environmentally sustainable technologies, with a focus on those that respond to the needs and priorities of women. 

• Path 3. Environmental practices that support healthy, resilient, adaptive communities: Canada’s objective in this path is to support the adoption of environmentally sound practices to build resilience, strengthen climate-change adaptation and mitigation, reduce pollution, and improve sustainable natural resource management. This path will strategically focus on supporting the leadership and ownership of women, youth and vulnerable groups in developing local practices and technologies, such as climate-smart agriculture, that equip them to plan, prepare and respond to sustainability challenges. This approach will harness traditional ecological knowledge and practices, and will also incorporate disaster-risk reduction, including strategies to improve climate resilience.  

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

Figure 1. Canada’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 Impact Assessment Act (IAA) ensures that all Government of Canada resources, including development assistance, are utilised in a manner that does not cause harm to the environment and society.

The Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals dictates that all Policies, Plans, and Proposals, including all documents of strategic nature, are assessed in order to reduce potential adverse risks and seek opportunities to enhance these initiatives.

To comply with the IAA and the Cabinet Directive, since May 2014, Global Affairs Canada has implemented the Environmental Integration Process (EIP), which is applicable to development assistance initiatives. The process integrates and streamlines the department's environmental policy and legal requirements into a single process, and applies a screening process to all of its development assistance initiatives.

Monitoring, evaluation and learning frameworks

The FIAP Environment and Climate Action Area policy is operationalised in an Action Area Results Framework (AA RF), which contains the following results-based management operational tools: a corporate-level logic model, theory of change and an indicator menu. The indicator menu includes key performance indicators (KPIs) that are used for data aggregation and roll-up of strategically selected project-level results at the corporate level. Results reporting with an analysis of progress on or toward the achievement of expected outcomes is completed annually for each project. Such monitoring at the project level is made by implementers and by departmental programme staff.

Global Affairs Canada’s Evaluation Division is integrating environment and climate objectives in all evaluations where it is relevant, and specifically where programming has had such a focus. The division is also working closely with departmental experts to assess how evaluations can be used to systematically collect common data on environment and climate change. Its rolling 5-year Departmental Evaluation Plan, which is mandated by the Treasury Board Policy on Results, is based on an extensive analysis and a number of consultations with key stakeholders to ensure that planned evaluations can reflect the requirements, needs and priorities of the department. This plan includes an upcoming evaluation on the Environment and Climate Action, one of the key action areas of the FIAP. The evaluation division also recently concluded a joint evaluation with Environment and Climate Change Canada on International Climate Change Co-operation, where an internal review of its climate finance programming was integrated.

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

To support partner countries in the implementation of their own national transitions to environmentally sustainable, low-emissions and climate-resilient development pathways, Canada has established funds at many international financial institutions, including the Asian Development Bank (ADB), Inter-American Development Bank (IDB), the World Bank and other climate and environment-focused facilities, such as the Green Climate Fund and the Global Environment Facility. These funds support sustainable, quality infrastructure, including in renewable energy.

Examples of projects to support national transition plans

• As part of its international climate finance, Canada has committed CAD 4 million to the National Adaptation Plan (NAP) Global Network to support developing countries, particularly the poorest and most vulnerable, in undertaking more effective adaptation planning and implementation. 

• Canada supported Haiti with a project to produce a national action plan for the clean energy sector to restructure the energy used by households and small businesses by reducing the use of wood or charcoal and promoting alternatives.

• Canada supports the Africa Climate Change Fund (ACCF), focusing on gender equality and climate action in Africa. This funding supports small-scale, climate-resilient projects aimed at increasing women’s economic empowerment and initiatives enhancing women’s participation in climate negotiations in countries across Africa. Project activities include: 1) supporting women and girls in climate change adaptation work and other grantees seeking to address opportunities and challenges for women in the transition to low-carbon economies; and 2) organising training, outreach and awareness-raising activities to increase women’s participation in climate negotiations and to promote the integration of gender equality issues in Nationally Determined Contributions (NDC) and other national climate change strategies.

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

Canada’s increased commitment to international climate finance recognises that urgent action is needed to address the interconnected crises of climate change and biodiversity loss, which disproportionally affect the poorest and most vulnerable. This funding will help developing countries build domestic capacity to take climate action, build resiliency, and reduce pollution, including by finding nature-based solutions to climate change like protecting biodiversity and planting trees, and supporting the transition to clean energy and the phasing-out of coal.

Alignment with the Paris Agreement should prioritise low-carbon energy initiatives, other low-carbon activities and emissions reductions technologies such as carbon capture, usage and storage (CCUS), end-use energy efficiency, and climate resilient investments that support developing countries’ domestic climate change plans. Low-carbon energy includes renewable electricity generation, nuclear energy, sustainable fuels, and other low-carbon energy sources. Transitioning away from coal to clean energy, both domestically and in developing countries, is essential to safeguard development gains made over the last decades and to further empower the poorest and most vulnerable, particularly women and girls. This transition could require using other, less carbon-intensive, fossil fuels, such as oil and gas in certain circumstances.

Support for sustainable, quality infrastructure

Canada supports quality infrastructure through its dedicated climate funds. For example, the Canadian Climate Fund for the Private Sector in Asia funded a project in Viet Nam to install floating solar panels over the expansive reservoirs of Viet Nam’s Da Mi hydropower plant to sustain the power stations even during the dry season. The 47.5 MWp floating solar plant is now the first large-scale floating solar project in Southeast Asia, and it is paving the way for other countries to gain more confidence in renewable energy.

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

• Started in 2018, the CAD 250 million International Finance Corporation (IFC)-Canada Blended Climate Finance Program (BCFP) provides concessional co-financing alongside IFC to initiatives that: 1) increase private sector financing and engagement across a broad cross-section of climate mitigation and adaptation activities; and 2) seek to promote market transformation activities that can move markets towards low-emissions and climate-resilient pathways. With a growing focus on the poorest and most vulnerable countries, the BCFP promotes gender-sensitive climate investing, recognising that climate change disproportionally effects girls and women.

• Canada also supports the Canadian Climate Fund for the Private Sector in Asia. The fund aims to catalyse greater private sector investment in climate change mitigation and adaption projects in low and lower middle-income Asian and Pacific countries and upper middle-income Small Island Developing States (SIDS) in the region. The fund provides concessional financing alongside ADB resources, to private sector projects that require more generous terms to be viable.

• Canada participates in key energy transition initiatives, and in strategic clean energy dialogues at the G7, G20, the Organisation for Economic Co-operation and Development (OECD), the International Energy Agency, the International Renewable Energy Agency, the Nuclear Energy Agency, the Clean Energy Ministerial and Mission Innovation. Canada co-chairs, with the United Kingdom, the Powering Past Coal Alliance, which is the world’s leading initiative to accelerate a global phase-out of coal-fired electricity. Canada is also member of a group of like-minded senior government representatives, who are shareholders in the big six multilateral development banks (MDBs), to advocate for MDB alignment with the Paris Agreement. 

How are development programmes supporting SIDS to achieve sustainable development?

Responding to the particular needs of SIDS

Canada has been leading efforts along with Jamaica and United Nations (UN) counterparts through the Financing for Development in the Era of COVID-19 and Beyond initiative to develop short, medium and long-term policy responses to the economic devastation caused by the pandemic – including for SIDS.

SIDS in particular have made extensive use of the opportunities that the Financing for Development initiative provided to feed into and facilitate dialogue with the G20, G7, International Monetary Fund (IMF) and World Bank, and to call attention to the particular economic and climate-related vulnerabilities of SIDS.

In the Caribbean, Canada has prioritised support for SIDS’ natural disaster resiliency and recovery. Following the 2017 hurricane season, Canada committed CAD 100 million for reconstruction to strengthen climate and economic resilience in the Caribbean, including by engaging the private sector. In 2020, Canada announced CAD 61.5 million in new initiatives to support Caribbean Community (CARICOM) countries in bolstering their climate and economic resilience, increasing capacity building through technical assistance, and enhancing educational exchanges. This includes CAD 20 million for the Canada-CARICOM Climate Adaptation Fund, which will support Caribbean Catastrophe Risk Insurance Facility (CCRIF) premiums for nine official development assistance (ODA)-eligible CARICOM countries and provide technical assistance to develop new innovative financing instruments for climate adaptation and resilience.

At the most recent G7 Leaders’ Summit, Canada announced a doubling of Canada’s climate finance, including increased support for adaptation, as well as nature and nature-based solutions that are in line with the G7 2030 Nature Compact, which will benefit SIDS.

Canada has sought to advance work in international fora such as the UN, World Bank and IMF, Green Climate Fund and in the G7, to better address the challenges of SIDS and help improve their access to climate financing for adaptation and mitigation. As such, Canada supports the CCRIF, which developed parametric policies backed by traditional and capital markets, and provides rapid pay-outs. Through the G7 Development and Finance Minister’s Meeting, and the Paris Club, Canada also championed resilient debt instruments, which provide debt service relief to countries after natural disasters.

During its G7 Presidency, Canada supported increased mobilisation of resources and knowledge through innovative financing approaches, such as blended finance, climate resilient debt instruments, risk mitigation tools and investor partnerships. Canada established blended (concessional) finance funds to mobilise private sector investment in climate action, including through the IDB and the IFC, both of which have specific targets for supporting the Caribbean.

Through a conference in Nairobi in 2018, Canada committed CAD 65 million to the World Bank’s Multi-Donor Trust Fund - PROBLUE. Caribbean countries are increasingly looking at the Blue Economy (sustainable use of ocean resources for economic growth, improved livelihoods and jobs, and ocean ecosystem health) to maximise and protect the opportunities from their large marine territories, and to try to diversify their economies. As such, further to its commitment to the PROBLUE trust fund, Canada and the Caribbean Development Bank co-hosted two events on the margins of the Caribbean Renewable Energy Forum to share and build a vision for the Blue Economy. Canada also supported discussions on the role of women in the Blue Economy at these events.

Finally, the Caribbean has committed to the Sendai Framework for Disaster Risk Reduction and hosted the VI Regional Platform on Disaster Risk Reduction in the Americas in Jamaica in July 2020, which was viewed as an opportunity for the region to accelerate action against natural and man-made disasters. Canada has supported ODA-eligible countries’ attendance at past conferences.

Examples of projects in support of SIDS’ sustainable development

Canada made global economic resilience to disasters a priority of its G7 Presidency in 2018 and announced CAD 100 million for Climate Risk Insurance coverage in vulnerable countries, including SIDS.

Canada provided CAD 60 million to establish a Renewable Energy in Small Island Developing States Program at the World Bank. This funding supports the expansion of clean energy systems and infrastructure (including battery solutions), improvement of energy access for women and girls, and the provision of training and employment opportunities for women in non-traditional, sustainable technology sectors, in SIDS.

Supporting SIDS’ access to finance

Canada provided CAD 9.5 million to the Climate Finance Access Network to support the most climate vulnerable developing countries, including Pacific Small Island Developing States, in building their capacity to structure and secure public and private finance for priority climate mitigation and adaptation investments. Although Small Island Developing States make negligible contributions to global greenhouse gas emissions rates, they find themselves on the frontline in the fight against climate change and are the most vulnerable to its impacts.