Abstract
To promote the sustainable development of developing countries through the reduction of greenhouse gas emissions and the impact of anthropogenic activity on the atmosphere, for some decades, developed countries and international institutions provided an increasing amount of climate financing tools, allocated through multiple channels. After the Copenhagen Conference of the Parties (COP15) held in 2009, developed country parties pledged to provide new and additional resources, including forestry and investments, approaching USD 30 billion for the period 2010–2012 and with balanced allocation between mitigation and adaptation. This collective commitment has come to be known as “Fast-start Finance” (FSF). To assess the key factors contributing to the amount and distribution of funding supporting projects using FSF, in this paper, we investigate the relationship between FSF, energy use, and greenhouse gas emissions. To this aim, two main analyses were carried out: (i) a qualitative examination of donor’s funding strategies and (ii) a quantitative analysis deepening the relationship between climate finance and greenhouse gas emissions by beneficiaries through a quantile regression model. Findings indicate a need to redesign the current aid scheme, and suggest an increasing need for financed projects to support sustainable economic innovation patterns of developing countries while paying close attention to the environmental policy context. The purpose was to provide useful feedback to policymakers to assess the effectiveness of the flow of funding for environmental plans and to avoid excessive aid dispersal and consequently a reduction of the FSF benefits.
Highlights
The current dominant economic system led by developed countries has proven to be no longer sustainable; at least along the social and environmental dimension due to the negative externalities it generates
This evidence suggests the use of a quantile regression model [62] to assess whether and how the funding concentration of Fast-Start finance is affected by the impact of anthropogenic activity
Except for the share of fossil energy, which becomes significant at 10%, there are no significant differences between the two estimate models
Summary
The current dominant economic system led by developed countries has proven to be no longer sustainable; at least along the social and environmental dimension due to the negative externalities it generates. The anthropogenic activities resulting from this system has contributed to the breaching of several ecological boundaries, in relation to climate change, biodiversity loss, and environmental degradation [1,2,3]. The common risks associated with climate change and the need to limit the impact of anthropogenic activities in the atmosphere were only recognized internationally in 1997 during the 3rd Conference of the Parties held in Kyoto in 1997. The final protocol signed by countries represents a corner-stone for the subsequent actions to promote the reduction of greenhouse gases (GHG) emissions. The Kyoto protocol provided for the creation of two sets of countries: developed countries (Annex I) which are obligated to reduce their GHG emissions and developing countries (Non-Annex I), which do not have emission reduction obligations
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