Global climate mitigation finance : the determinants of its provision and allocation

• Main Author: Halimanjaya, Aidy Steveany
• Published: University of East Anglia 2014
• Subjects: 338.91
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.614603

In recent years development aid (also commonly referred to as Overseas Development Assistance or ODA) has increasingly been allocated for the mitigation of climate change, often diverting funding from more traditional development purposes such as poverty alleviation. To the author's knowledge no other study identifies the determinants of the increasing provision of official mitigation finance and the patterns of its allocation across 180 developing countries. This PhD thesis includes three empirical studies and a theoretical discussion and seeks to fill this gap in the academic literature. The analysis makes use of fixed-effect, random-effect and two-part models, the institutional analysis and development framework and 1998-2010 Organisation for Economic Co-operation and Development (OECD) Rio Marker project-level data from 23 donors and 180 developing countries. This research finds that donors' emission levels, CO2 intensity, commitment to the Kyoto Protocol, political views and domestic environmental spending significantly influence their allocation of mitigation finance and the proportion of their total ODA that they designate to it, and that recipient developing countries' potential for mitigation, such as their environmental assets and emission problems, and their institutional and economic factors affect how mitigation finance is allocated to them. The findings show that donors tend to provide loans to recipients with large emission problems and grants to those with large environmental assets. Across donors, the determinants of mitigation finance tend to be heterogeneous. These findings lead to a discussion whether mitigation finance is a perverse incentive for developing countries' emission mitigation and whether it will permanently remain reliant on ODA. The overall research gives guidance and reflection of the future of official mitigation finance.