How Do Energy Use and Climate Change Affect Fast-Start Finance? A Cross-Country Empirical Investigation

Renato Passaro, Ivana Quinto, Giuseppe Scandurra and Antonio Thomas
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Renato Passaro: Department of Engineering, University of Naples Parthenope, 80143 Napoli, Italy
Ivana Quinto: Department of Industrial Engineering, University of Naples Federico II, 80125 Napoli, Italy
Giuseppe Scandurra: Department of Management and Quantitative Studies, University of Naples Parthenope, 80132 Napoli, Italy
Antonio Thomas: Department of Engineering, University of Naples Parthenope, 80143 Napoli, Italy

Sustainability, 2020, vol. 12, issue 22, 1-23

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.

Keywords: climate finance; Fast-start Finance; developing countries; renewable energy generation; greenhouse emissions (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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