Determinants of access to climate finance: Nuanced insights for SIDS and other vulnerable economies

Abstract

Empirical studies of the determinants of access to climate finance have coalesced around a broad set of independent variables, including recipient need, merit and adaptive capacity, and donor interest. This paper provides comprehensive and nuanced insights into the allocation of the varied sources of climate finance by providing answers to the following questions: (i) Do the eligibility criteria used by donors to determine which countries receive climate finance differ from the criteria used to determine the amount of finance allocated? (ii) Do the eligibility criteria and determinants of amounts allocated for mitigation aid differ from those for adaptation aid? (iii) Do different kinds of donors determine eligibility for financing and amount of finance allocated in different ways? (iv) Do SIDS receive more (or less) climate finance than is justified by their relative vulnerability and adaptive capacity? The results provide a better understanding of the challenges faced by SIDS in accessing climate financing, highlight an underemphasized bifurcation within this group of countries, and underscore the need for further exploration of suitable types of support and modalities of delivery.