Search

The Paris Agreement's nationally driven structure puts the spotlight on financing strategies at the national level. The role of national funding vehicles in mobilizing climate finance, however, has not received extensive attention. This paper remedies this gap by introducing a novel dataset of national climate funds established in developing countries. The database creates an inventory of national financing vehicles and tracks their major attributes, including scope, legal form, and the host, among others. We show that 39 countries have established national climate funds. These funds seek to access and mobilize finance from various sources, domestic and international. Most of these funds have broad mandates to tackle climate change, while a smaller share has a more targeted, sectoral focus. Funding sources vary from taxes to international aid. The funds offer a limited range of financial instruments, primarily awarding grants. The funds also differ in how integrated they are with overarching climate plans and strategies. We also find that most developing countries use existing budget lines to target finance towards climate change objectives. Only five countries track public expenditure on the basis of dedicated budget codes. This paper contributes to the literature by providing an empirical basis to pursue questions regarding the role and effectiveness of national climate funds. For policymakers, the limited range of instruments at the disposal of many of these national climate funds also suggests a need to ensure that the national climate funds have the design features they need to support the implementation of national policy goals. Key policy insights Systematic data on public climate finance are scarce. Most governments do not use climate change codes to track their expenditures related to climate change. Policymakers should adopt practices that will help instil transparency in public expenditure on climate change. Policymakers have to revisit the design features of national climate funds such as legal form and areas of operation as the wider operating context changes. Funds accredited with multilateral climate funds are underutilized by fund contributors. The Green Climate Fund's direct access modality offers one major avenue to foster synergies between national climate funds and multilateral climate funds. Policymakers have the opportunity to harvest lessons from existing funds and calibrate climate policies accordingly, especially as countries contemplate setting revenue-generating carbon prices. [ABSTRACT FROM AUTHOR]

Enhancing the Nationally Determined Contributions (NDCs) is an important exercise to achieve the long-term goals of the Paris Agreement. The Paris Agreement also recognizes that support to developing countries in this regard will help them to aim for higher climate ambition. The role of international support programmes in the NDC enhancement process is crucial but is not often covered in scientific research. Consequently, the factors driving a country's decision to apply for NDC-related assistance have also not yet been fully explored. Acknowledging the research gap, this paper framed and tested multiple hypotheses to evaluate the impact of potential factors on the likelihood of a country applying for assistance to enhance its NDCs. For this, a logistic regression method was employed. Data from the two initiatives coordinating the technical and financial assistance worldwide, namely the Climate Action Enhancement Package (CAEP) and Climate Promise, were reviewed for this purpose. The CAEP program is financially supported by Denmark, Germany, Netherlands, Norway, Sweden and the UK. This study identifies the level of socio-economic development and the population's exposure to air pollution as key factors which influence the likelihood of applying for assistance under CAEP and Climate Promise in developing countries. Further, the presence of democratic aspects in the form of governance may also influence this choice. Finally, this study discusses the results and associated policy implications for countries receiving assistance to enhance their NDCs. Developing countries with relatively low socio-economic development are more likely to apply for assistance to enhance their NDCs. The assistance is designed to help them to build capacities to develop and implement future climate policies. Air pollution and climate change issues are interconnected. Exposure to air pollution is a potential indicator that can influence the NDC enhancement process in developing countries. The assistance for enhancing NDCs will lead to NDC targets that are well-informed and are aligned with national and sub-national development priorities with realistic prospects of implementation. Climate vulnerability and net trade do not influence the decision-making process to apply for NDC enhancement assistance. [ABSTRACT FROM AUTHOR]

In view of the climate emergency, it is necessary to model and forecast road transport emissions for implementing more effective climate policy. This paper fills an important research gap by quantifying the challenges, barriers and remedies of achieving road transport emission reduction and air quality improvement in developing countries. It contributes to the debate on top-down and bottom-up approaches to reconcile carbon and other transport related emissions. China and India are chosen as case studies. Using various official statistics and proxy variables, we estimate and compare the road transport carbon emissions of the two countries systematically from 2009 to 2020. Insights from detailed mode-specific estimations of the bottom-up approach are valuable for targeted policies and measures. An analysis of the major components of road transport carbon emissions points to strategies of promoting electric vehicles, reducing transport demand, accelerating modal shift to low-carbon modes, and cleaner electricity to achieve climate policy. [ABSTRACT FROM AUTHOR]

Climate policy across the world is proceeding at a highly variable pace, with some places very committed to decarbonizing their economies and others just beginning. Emerging nations are generally just starting along this journey. However, among the few nation states that have pledged to achieve carbon neutrality, is Bhutan, a least developed country. Carbon neutrality is an ambitious climate policy that is increasingly being recognized as necessary in order to stabilize global temperature rise at 1.5°C. However, Bhutan is likely to face significant challenges in maintaining this status as the country balances its desire to grow in economic opportunities (GDP) and in human happiness (GNH). Little research has been conducted inside the policy processes to better understand how Bhutan will maintain carbon neutrality. Through open-ended, semi-structured interviews with key stakeholders, this study provides an inside view on the current situation and future challenges that Bhutan may face, along with the complexities associated with implementing and maintaining an ambitious carbon neutral policy. The paper highlights Bhutan's story and how it could be useful for policy learning and knowledge sharing, especially in the context of emerging nations' climate governance. [ABSTRACT FROM AUTHOR]

Recent Conferences of the UNFCCC Parties (COP) emphasized international technology funding as a means of achieving carbon emissions reductions in developing countries. Such funds are now being realized. Nonetheless, this paper is possibly the first theory-based discussion of international technology funding. It sets up an intuitive Ramsey model of a developing economy including imports of capital and embodied technologies from abroad. Going beyond a scale, technique and composition effect, it disentangles five relevant effects and four technology-related policy levers and their interactions. It then discusses their role in designing an international technology fund with the aim to reduce emissions efficiently. The paper concludes that it is inefficient to address emissions reductions independent of the technological absorptive capacity and other aspects of economic development. Therefore, it opts for an integrated technology funding scheme. [ABSTRACT FROM AUTHOR]

Summary Developed countries have relied heavily on aid budgets to fulfill their pledges to boost funding for addressing climate change in developing countries. However, little is known about how interaction between aid and other ministries has shaped contributors’ diverse approaches to climate finance. This paper investigates intra-governmental dynamics in decision-making on climate finance in seven contributor countries (Australia, Denmark, Germany, Japan, Switzerland, the UK, and the US). While aid agencies retained considerable control over implementation, environment and finance ministries have played an influential and often contrasting role on key policy issues, including distribution between mitigation and adaptation and among geographical regions. [ABSTRACT FROM AUTHOR]

Government support in the form of so-called feed-in tariff policies (FITs), which combine long-term, fixed-price electricity purchase agreements and guaranteed grid-access, has attracted large private-sector investments in sustainable electricity generation in the industrialized world. In an effort to replicate these experiences globally, a number of international organizations, NGOs, banks and donor countries are proposing mechanisms to cover part of the cost of FITs in developing countries. This paper reviews these proposals for supported FITs and then uses a case study of Thailand’s Alternative Energy Development Plan 2013–2021 to investigate the opportunities and challenges of supporting FITs at a global scale. The review highlights that these proposed mechanisms foresee different roles for national governments and supporting entities, particularly in terms of who is responsible to balance fixed FIT payments with uncertain revenues and savings from carbon markets, donors and avoided fuel consumption. The case study results then show that the uncertainty about the actual cost of supported FITs is so significant that the responsibility to balance the FIT budget has to be considered carefully in the design of any mechanism that is to be employed at scale. To a considerable extent, the uncertainty is driven by the counterfactual analysis, i.e., by assumptions about the future savings from avoided fossil fuel consumption: for example, depending on the fossil fuel price scenario the FIT may result in a cost of USD 17bn or savings of 23bn. Unlike uncertainty about the necessary level of FIT payments, uncertainty about the avoided fossil fuel cost materializes only over the course of the policy’s lifetime, making it politically challenging. This suggests that an international support mechanism that differentiates the allocation of responsibility depending on the income-level of the recipient country is more suitable for global-scale support than a one-size-fits-all approach. [ABSTRACT FROM AUTHOR]