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How does energy aid mitigate the recipient countries’ carbon emissions?

Yang Liu, Kangyin Dong () and Farhad Taghizadeh-Hesary

Economic Analysis and Policy, 2023, vol. 79, issue C, 359-375

Abstract: As the global community collectively tackles climate change, energy aid has emerged as a potential solution to reduce carbon dioxide (CO2) emissions in recipient countries. However, the impact and underlying mechanisms of energy aid on CO2 emissions remain uncertain. Accordingly, this study empirically examines the influence of energy aid on CO2 emissions. Analyzing data from 65 nations between 2002 and 2020, we find that energy aid contributes to reducing recipients’ CO2 emissions. A sectoral heterogeneity analysis reveals that this impact primarily stems from aid related to renewable energy generation and energy policies, highlighting the need to optimize the energy aid structure to improve its effectiveness. Additionally, technical and structural effects are identified as the two primary transmission paths to explore the mechanism linking energy aid and carbon emissions. This study confirms the importance of energy aid in mitigating CO2 emissions and provides recommendations for enhancing aid effectiveness.

Keywords: CO2 emissions; Energy aid; Heterogeneity; Transmission mechanism (search for similar items in EconPapers)
JEL-codes: C33 F35 Q43 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:79:y:2023:i:c:p:359-375

DOI: 10.1016/j.eap.2023.06.022

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