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Integration is already a common approach among development cooperation providers to integrate environmental and climate aspects. It can ensure that the measures contribute to the necessary transformation and do not undermine climate objectives, which are the essence of the first feature of Paris-oriented development cooperation (section 2.2). Effective integration requires a mandate for institutions to integrate environmental issues as a key basis for sustainable development (OECD, 2019[55]). Such a mandate allows for the systematic consideration of policies, plans, budgets and activities at all stages of the programme cycle. Climate mainstreaming integrates climate into monitoring and evaluation, as well as into the design of development policies and programmes, underlining the need to integrate new knowledge and lessons learned. This feature of integration is characterized by the fact that suppliers see it as a tool that contributes to alignment with Paris, as it is in line with Characteristic 4 of Paris-oriented development cooperation – that is, it proactively responds to ideas and opportunities to meet the needs of developing countries (Section 2.2). Climate mainstreaming has the potential to enable coherence and ensure that policy decisions are not contradictory in development cooperation portfolios. Integration is a useful and necessary tool that can contribute to the achievement of the goals of the Paris Agreement. Nevertheless, effective climate action requires more than the interpretations and approaches of traditional integration, as evidenced by the characteristics of Paris-oriented development cooperation presented in this report. For development cooperation providers, the Alignment of Paris means that they should reassess and fully refocus all their activities to ensure that they are in line with the objectives of the Paris Agreement.

Integration can contribute to this process. However, it must take place in parallel with broader political and strategic changes so that objectives are a defining feature of overall development cooperation and are not simply seen as isolated imperatives or checkboxes in programming. Development cooperation service providers report on other climate-related indicators (with or without targets) in business dashboards and performance monitoring systems. Common indicators integrated into development cooperation strategies include the volume of greenhouse gas emissions avoided or saved and the beneficiaries of adaptation efforts. For example, the European Union reports in its results framework on its total emissions (not the emissions saved or avoided) using indicators aligned with the SDGs. Another example of development finance institutions is the Inter-American Development Bank (IDB), which calculates and reports on gross emissions from emission projects and emission reductions from mitigation projects. Bilateral development cooperation donors have begun to define the Paris direction as a key dimension of financial decision-making, and they have committed to aligning. The French Development Agency (AFD) is an example. After committing to making its activities “100% compatible with the Paris Agreement”, AFD created a mechanism for analysing “sustainable development” (AFD, 2018[43]; AFD, 2017[44]).

This mechanism defines six operational dimensions for sustainable development, including a two-part dimension of climate change for “the transition to a low-carbon pathway” and “resilience to climate change”. This approach places climate action at the heart of sustainable development alongside five other dimensions of sustainable development (AFD, 2018[43]: sustainable and resilient economic growth; social well-being; gender equality; biodiversity conservation and environmental and natural resource management; and project sustainability and impact governance. AFD also defines the scope of climate protection at the national level through the respective NDCs. This reinforces coherence with countries` climate action, but requires a focus on the role of development cooperation in boosting ambition and ensuring that NDCs themselves focus on Paris. Box 2.5 describes the AfD`s approach. Current national adaptation planning, focused on economic development and growth, is very coherent. The financing for development audit is crucial to assess the three levers through which development cooperation can achieve the objectives of the Paris Agreement (Figure 2.1). Financing, policy support and capacity-building measures have an impact on and reflect the flow of financing for development. These flows serve a broader purpose by targeting policies and other areas that influence and catalyze systemic change, such as the development of financial systems and the expansion of fiscal capacity in developing countries. One of the main challenges in aligning financing for development with the Paris Agreement is to mobilize and recruit a wider range of actors to finance sustainable development (Section 2.3). For the FMO, the implementation of SDG 13 means climate adaptation, climate protection and mobilizing climate finance. Aligning development cooperation with the goals of the Paris Agreement preserves the progress already made in development and contributes to the achievement of the SDGs.

Climate action and sustainable development are inextricably linked, as stipulated in Article 2(1) of the Agreement. As sustainable development is the primary objective of development cooperation, the impact of climate change must be taken into account in the pursuit of this objective. This includes all areas that directly or indirectly have a significant impact on climate change or are significantly affected by it, such as investment, taxation, tax systems, energy, agriculture and sustainable food production, employment, transport and regional and urban policy. In this way, one can create a comprehensive understanding of what the Paris orientation means for development cooperation and what is relevant to most policies and sectors in developing countries. .

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