Determinants of Climate-Related Development Finance: Policy Implications for South Korea's CRDF in Comparison with CRDF Trends of Japan, Germany, and France

Abstract

As climate change is a global agenda that requires combined and collective global efforts, each country, developed or developing, needs to mainstream climate change policies, both domestic and external, to achieve its' Nationally Determined Contribution (NDC) targets and ultimately the goals of the Paris Agreement (PA). For this end, climate finance, domestic or international, public or private, plays crucial role in the much-needed transitioning of carbon-intensive industries as well as adapting to the effects of climate change. This study, within the context of Climate-Related Development Finance (CRDF) for developing countries as part of bilateral Official Development Assistance (ODA), aims to derive policy implications for South Korea's CRDF by means of empirical analyses of CRDF determinants for Japan, Germany, and France, which are one of the largest donor countries of CRDF among member countries of the Development Assistance Committee for the Organization for Economic Co-operation and Development (OECD DAC). South Korea should scale up CRDF to recipient countries to which export volume is comparatively higher, reflecting its economic interest, as largest donor countries do consider export volume in their CRDF allocations.