Abstract

This paper analyzes the factors explaining the underprovision of climate finance from developed countries to developing countries from 2011 to 2020. Developed countries committed to mobilize USD 100 billion per year by 2020 for developing countries but failed to achieve this goal. To address these issues, we use a unified empirical framework to study the relationships between climate finance and three donor countries’ characteristics: payment capability, self-interests and political commitment. First, our results demonstrate the importance of the existence of international agreements. Donor countries’ climate aid behavior has changed significantly after making political commitments to the international community. Second, it is the long-term economic development level but not the short-term economic disturbance that affects the provision of climate finance. Third, donor countries’ domestic political tendencies toward the green have positive but very weak impacts on climate aid. Finally, our results support the existence of tied aid effects that innovations in energy technologies and gross exports are beneficial for climate finance provisions. The findings in this paper can shed light on the improvement in global climate finance governance in the future.

Citation

Qian, H., Qi, J. & Gao, X. What determines international climate finance? Payment capability, self-interests and political commitment. GPPG 3, 41–59 (2023). https://doi.org/10.1007/s43508-023-00062-5