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CO 2 mitigation in developing countries: the role of foreign aid

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  • Mohamed Boly

    (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper empirically investigates the link between foreign aid and pollution, specifically CO2 emissions in developing countries. We use a more complete and recent dataset to re-assess the environmental impact of foreign aid. Focusing on 112 aid recipient countries over the period 1980 - 2013, we find that the effect of aid depends on the donor, with multilateral aid more likely to reduce pollution than bilateral aid for which we find no effect. However, when we more precisely look at the composition of bilateral aid, we find it has an effect when specifically targeted toward environment. This effect is non-linear, since we observe a pollution-reducing effect only for important amounts of bilateral environmental aid.

Suggested Citation

  • Mohamed Boly, 2018. "CO 2 mitigation in developing countries: the role of foreign aid," Working Papers halshs-01740881, HAL.
  • Handle: RePEc:hal:wpaper:halshs-01740881
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01740881
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    Keywords

    CO2 emissions; Foreign aid; Environmental aid; Threshold effect;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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