Which mode of funding developing countries’ climate policies under the post-Kyoto framework?
AbstractFunding developing countries’ climate policies after Cancun (COP16) has a dual goal: firstly, to support mitigation of developing countries in order to sustain the two-degree pathway of stabilising the global mean temperature; secondly, to empower the vulnerable countries in lowincome regions to adapt to and recover from the most adverse impacts of climate change. So far, the political and scientific discussion has mainly concentrated on the appropriate level of funding. Referring to the newly emerging climate finance architecture under the post-Kyoto framework, this paper argues that a stronger focus must be put on the question: which mode of funding to choose? This is for the reason that the currently discussed funding instruments, such as earmarking of industrialised countries’ transfer payments to developing countries for reducing loss and damages, mitigation, or adaptation costs, may cause fundamental changes in the countries’ strategic behaviour concerning mitigation and adaptation efforts. Moreover, some of the instruments fall short of a minimum requirement for the donors to voluntarily provide means, and thus cannot guarantee sustained funding. We develop our results in a non-cooperative two-country framework in which donor and recipient decide on mitigation in the first, and on adaptation in the second stage of the game.
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Bibliographic InfoPaper provided by RECAP15, European University Viadrina, Frankfurt (Oder) in its series Discussion Paper Series RECAP15 with number 004.
Length: 20 pages
Date of creation: Jul 2012
Date of revision:
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adaptation; climate policy; funding; mitigation; non-cooperative behaviour;
Other versions of this item:
- Heuson, Clemens & Peters, Wolfgang & Schwarze, Reimund & Topp, Anna-Katharina, 2012. "Which mode of funding developing countries' climate policies under the post-Kyoto framework?," UFZ Discussion Papers 10/2012, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- F35 - International Economics - - International Finance - - - Foreign Aid
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-01-19 (All new papers)
- NEP-ENE-2013-01-19 (Energy Economics)
- NEP-ENV-2013-01-19 (Environmental Economics)
- NEP-GTH-2013-01-19 (Game Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ficre Zehaie, 2009. "The Timing and Strategic Role of Self-Protection," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 44(3), pages 337-350, November.
- Johan Eyckmans & Sam Fankhauser & Snorre Kverndokk, 2013. "Equity, Development Aid and Climate Finance," Grantham Research Institute on Climate Change and the Environment Working Papers 123, Grantham Research Institute on Climate Change and the Environment.
- Karen Pittel & Dirk Rübbelke, 2013. "Improving Global Public Goods Supply through Conditional Transfers - The International Adaptation Transfer Riddle," CESifo Working Paper Series 4106, CESifo Group Munich.
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