Impact Assessment of Climate Mitigation Finance on Climate Change in South Asia

Abstract

Climate change is considered the greatest threat to human life in the 21st century, bringing economic, social and environmental consequences to the entire world. Environmental scientists also expect disastrous climate changes in the future and emphasize actions for climate change mitigation. The objective of this study was to explore the influence of climate mitigation finance on climate change in the region most vulnerable to climate shock, i.e., South Asia, in the period from 2000 to 2019. The panel autoregressive distributed lag model was used to estimate the influence of climate mitigation finance on climate change. The findings of this study demonstrate that, in the long-run, climate mitigation finance has a significant role in mitigating climate change, while in the short-run, climate mitigation finance has an insignificant effect on climate change. The result also shows that, in the long-run, climate change has a negative causal relation with GDP and globalization, but it has a positive causal relationship with energy consumption. The short-term effects of all independent variables are insignificant. Finally, based on the outcome of this study, several policy measures are recommended in order to mitigate climate change.