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Does energy‐related aid affect emissions? Evidence from a global dataset

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  • Sambit Bhattacharyya
  • Maurizio Intartaglia
  • Andy McKay

Abstract

Donor countries have been using international aid in the field of energy for at least three decades. The stated objective of this policy is to reduce emissions and promote sustainable development in the global South. In spite of the widespread use of this policy tool, very little is known about its effect on emissions. In this paper we perform an empirical audit of the effectiveness of energy‐related aid in tackling CO2 and SO2 emissions. Using a global panel dataset covering 128 countries over the period 1971–2011 and estimating a parsimonious model using the Anderson and Hsiao estimator, we do not find any evidence of a systematic effect of energy‐related aid on emissions. We also find that the non‐effect is not conditional on institutional quality or level of income. Countries located in Europe and Central Asia do better than others in utilizing this aid to reduce CO2 emissions. Our results are robust after controlling for the environmental Kuznets curve, country fixed effects, country‐specific trends, and time‐varying common shocks.

Suggested Citation

  • Sambit Bhattacharyya & Maurizio Intartaglia & Andy McKay, 2018. "Does energy‐related aid affect emissions? Evidence from a global dataset," Review of Development Economics, Wiley Blackwell, vol. 22(3), pages 1166-1194, August.
    • Handle: RePEc:bla:rdevec:v:22:y:2018:i:3:p:1166-1194
    DOI: 10.1111/rode.12409
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    Cited by:

    1. Liu, Yang & Dong, Kangyin & Taghizadeh-Hesary, Farhad, 2023. "How does energy aid mitigate the recipient countries’ carbon emissions?," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 359-375.
    2. Joyeeta Gupta & Louis Lebel, 2020. "Access and allocation in earth system governance: lessons learnt in the context of the Sustainable Development Goals," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 20(2), pages 393-410, June.
    3. Michelle Scobie, 0. "International aid, trade and investment and access and allocation," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 0, pages 1-16.
    4. Muhlis Can & Jan Brusselaers & Mehmet Mercan, 2022. "The effect of export composition on energy demand: A fresh evidence in the context of economic complexity," Review of Development Economics, Wiley Blackwell, vol. 26(2), pages 687-703, May.
    5. Michelle Scobie, 2020. "International aid, trade and investment and access and allocation," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 20(2), pages 239-254, June.
    6. Joyeeta Gupta & Louis Lebel, 0. "Access and allocation in earth system governance: lessons learnt in the context of the Sustainable Development Goals," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 0, pages 1-18.

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