In September, the world agreed on new ambitious World Development goals. With this momentum we moved toward the COP21 climate summit in Paris, where it is clear that the world needs to act to keep the temperature rise below 2 degrees in 2100. Paris will be a test for all countries. We will all have to make tough compromises, but we need to make them and be ambitious -- and not send a huge unpaid bill to our grandchildren.
To succeed -- now and after Paris, where the real hard work begins -- we need to do many things. I will focus on the need to develop innovative climate financing and more private-sector involvement, better market conditions and better sharing of solutions and best practices.
We need to develop innovative climate financing. To meet the target of 100 billion USD a year for climate finance, we have to rely more on the private sector to make investments in developing countries. Governments cannot and should not provide all the necessary finance. To speed up private-sector investment in climate-friendly solutions, we must develop new financing mechanisms that combine public and private funds. We must use public funds in a smarter way, so they help reduce the risks that prevent investors form entering developing markets.
We have as an innovative public-private partnership created the Danish Climate Investment Fund (DCIF), with a total capital of around USD 190 million. Sixty percent of the fund's capital are provided by institutional investors. In Kenya, the fund has for example invested millions in the Lake Turkana Wind Farm that will be able to cover 15% of Kenya's electricity production. The fund is expected to generate investments up to 1.4 billion USD in the coming years. We must scale such initiatives up to mobilise the financial muscles of the private sector.
We must all -- developed and developing countries -- improve the market conditions for long-term private investments. All countries need to look at their laws, regulations and market conditions to facilitate innovative finance to flow to new projects. Dysfunctional markets and unstable political environments may deter investors to engage in developing countries. Donor governments may have implemented rules that limit the possibilities to enter into public-private partnerships with development aid. We must set the right conditions to let the free market unfold its energy and entrepreneurial spirit.
We have to share solutions and best practices more and better. Thirty years ago, Denmark chose to pursue a sustainable economic path. It has benefitted our economy and the climate. Let me give you a few examples on renewable energy and energy efficiency:
Denmark generates around 40% of its electricity from wind -- our goal is that wind will provide 50% of our electricity in 2020. On windy days, we already generate more electricity than we consume. This poses a "problem" because surplus energy cannot be stored. The solution lies in market based cooperation. When the wind blows, surplus Danish electricity is exported to our neighbors, including Norway. Norway generates substantial amounts of electricity from hydro power plants. When the wind blows in Denmark, Norwegian hydro-power plants stop electricity production and fill their water reservoirs -- ready to send power the other way. In effect, the Norwegian water reservoirs work as a battery that stores Danish wind power, ready to send it to Denmark when the wind is not blowing.
Rethinking the way we use our energy technology is one answer to the inherent problems with renewable energy: securing supply when the renewable resource is temporarily unavailable. The system is based on efficient and free markets where energy can be bought and sold at prices that reflect the supply and demand.
We consider energy efficiency as a resource. Not using energy is the most effective way of reducing negative climate impacts and it saves money at the same time. Making Denmark among the most energy-efficient countries in the world has required a host of initiatives and projects. Many are attracting international interest, such as a network of district heating in our cities that use household waste to generate heating. Danish companies are highly innovative and researchers and companies develop a wealth of hi-tech energy saving solutions that has tripled the export of green technology since 2000.
We have been able to decouple economic growth from increasing energy use and CO2 emissions. Our economy has grown around 40% since 1990, while keeping our energy consumption stable and reducing our CO2 emissions. Energy saved is money saved and going green makes economic sense.
Denmark came to Paris with the clear ambition to get a global agreement. And we brought something to the table -- the will to share our knowledge on developing sustainable-energy solutions; experience of developing efficient markets and regulation; and the will to rethink the way we provide finance for our partners in the developing countries.
This post is part of a "Nordic Solutions" series produced by The Huffington Post, in conjunction with the U.N.'s 21st Conference of the Parties (COP21) in Paris (Nov. 30-Dec. 11), aka the climate-change conference. The series will put a spotlight on climate solutions from the five Nordic countries, and is part of our What's Working editorial initiative. To view the entire series, visit here.