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Environmental and Climate Finance in a New World: How Past Environmental Aid Allocation Impacts Future Climate Aid

Author

Listed:
  • Marcoux, Christopher
  • Parks, Bradley C.
  • Peratsakis, Christian M.
  • Roberts, J. Timmons
  • Tierney, Michael J.

Abstract

In this paper we update previous work that categorizes foreign aid projects in terms of their likely impact on the natural environment. We then document trends in the global distribution of environmental aid over time and show that environmental aid has increasingly focused on global environmental issues (especially climate change), rather than local issues in recipient countries. Somewhat surprisingly, we also find that environmental aid is increasingly allocated through bilateral aid agencies rather than through the increasing number of multilateral channels created for this purpose. After providing these descriptive statistics and demonstrating trends, we offer a tentative explanation for this puzzling pattern. We argue that each individual aid project represents a negotiation between donor and recipient. This additional level of bargaining significantly conditions the costs and benefits of multilateralism for donors, especially as recipients have multiple outside options for obtaining development finance. Reflecting the growing political salience of global environmental threats, donors are providing increasing levels of environmental aid, and especially climate finance. However, at the same time, donors are increasingly failing to co-ordinate their allocation of climate finance (and other environmental aid) within multilateral institutions. At a practical level, this raises the question whether the effect of increasing levels of funding will be undercut by decreasing co-ordination and efficiency.

Suggested Citation

  • Marcoux, Christopher & Parks, Bradley C. & Peratsakis, Christian M. & Roberts, J. Timmons & Tierney, Michael J., 2013. "Environmental and Climate Finance in a New World: How Past Environmental Aid Allocation Impacts Future Climate Aid," WIDER Working Paper Series 128, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp2013-128
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    File URL: https://www.wider.unu.edu/sites/default/files/WP2013-128.pdf
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    References listed on IDEAS

    as
    1. Hicks, Robert L. & Parks, Bradley C. & Roberts, J. Timmons & Tierney, Michael J., 2010. "Greening Aid?: Understanding the Environmental Impact of Development Assistance," OUP Catalogue, Oxford University Press, number 9780199582792.
    2. Austin Strange & Bradley Parks & Michael J. Tierney & Andreas Fuchs & Axel Dreher & Vijaya Ramachandran, 2013. "China’s Development Finance to Africa: A Media-Based Approach to Data Collection," Working Papers 323, Center for Global Development.
    3. P. B. Anand, 2004. "Financing the Provision of Global Public Goods," The World Economy, Wiley Blackwell, vol. 27(2), pages 215-237, February.
    4. Gutner, Tamar, 2005. "World Bank Environmental Reform: Revisiting Lessons from Agency Theory," International Organization, Cambridge University Press, vol. 59(03), pages 773-783, July.
    5. Tammy L. Lewis, 2003. "Environmental Aid: Driven by Recipient Need or Donor Interests?," Social Science Quarterly, Southwestern Social Science Association, vol. 84(1), pages 144-161.
    6. Haas, Peter M., 1992. "Introduction: epistemic communities and international policy coordination," International Organization, Cambridge University Press, vol. 46(01), pages 1-35, December.
    7. Nielson, Daniel L. & Tierney, Michael J., 2003. "Delegation to International Organizations: Agency Theory and World Bank Environmental Reform," International Organization, Cambridge University Press, vol. 57(02), pages 241-276, March.
    8. repec:cup:apsrev:v:56:y:1962:i:02:p:301-309_07 is not listed on IDEAS
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