Climate finance and biodiversity: an institutional perspective

Lieu Nguyen, Long Nguyen, Quyen Tran, Vi Bui and Bao Cong Nguyen To

Journal of Economics and Development, 2026, vol. 28, issue 4, 327-344

Abstract: PurposeThis study aims to develop an institutional perspective on the climate finance–biodiversity relationship. It examines whether institutional adaptation and mitigation finance are associated with biodiversity outcomes and how these relationships differ from voluntary carbon-credit activity.Design/methodology/approachThe study uses a country-year panel of 132 countries from 2002 to 2020. Biodiversity is measured by the Human Influence Index and the Red List Index. The empirical analysis combines panel regressions with robustness checks, a country-level carbon-credit benchmark, a predetermined top-donor budget-competition instrument, Lewbel's (2012) identification strategy and suggestive timing diagnostics over one-, three- and five-year horizons.FindingsAdaptation and mitigation finance are associated with lower future human pressure and better species conservation status. Voluntary carbon-credit activity shows the opposite pattern. This contrast suggests that climate-related capital is not ecologically homogeneous across institutional channels.Practical implicationsClimate-finance evaluation should consider institutional design alongside the amount of capital mobilized. Climate-finance and carbon-market frameworks should integrate biodiversity safeguards, land-use pressure, ecosystem integrity and long-term conservation capacity into project selection, monitoring and evaluation.Originality/valueThis study advances an institutional perspective by treating the governance channel of climate-related capital as a theoretically relevant source of ecological heterogeneity. It distinguishes institutional climate finance, embedded in intergovernmental cooperation and public planning, from voluntary carbon-credit activity organized around tradable mitigation claims. By comparing both channels at the country-year level, the study extends the biodiversity co-benefits literature beyond finance volume and positions institutional form as a central dimension for understanding ecological outcomes.

Keywords: Biodiversity; Climate finance; Human Influence Index; Red List Index (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/jed/article/28/4/327/13944 ... ity-an-institutional (text/html)
https://www.emerald.com/jed/article-pdf/28/4/327/11815697/jed-03-2026-0241en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jedpps:jed-03-2026-0241

DOI: 10.1108/JED-03-2026-0241

Access Statistics for this article

Journal of Economics and Development is currently edited by A. Professor Vu Hung Nguyen

More articles in Journal of Economics and Development from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().