Finland's 'polluter pays' approach — financing with a twist

At a time when most traditional donors are slashing their foreign aid budgets, how was Finland able to increase its official development assistance spending last year to 0.6 percent of gross national income?

By allocating 100 percent of carbon emissions payments to the government to development cooperation, Pekka Haavisto, Finnish minister for international development, highlighted in a video interview with Devex President and Editor-in-Chief Raj Kumar at the European Development Days in Brussels.

“It has been remarkable [at a time] when we have a very tight budget situation in the country, with almost all sectors cutting, [that] we have been able to increase our development cooperation budget,” he said, adding that emissions trading could contribute even more in the future to ODA.