A study on the economic effects of climate assistance funds

Jing Zhang (), Xudong Zhu (), Shuang Zi () and Shuai Chen ()
Additional contact information
Jing Zhang: Shandong University of Finance and Economics
Xudong Zhu: Shandong University of Finance and Economics
Shuang Zi: Shandong Management University
Shuai Chen: Shandong University of Science and Technology

Mitigation and Adaptation Strategies for Global Change, 2025, vol. 30, issue 5, No 8, 29 pages

Abstract: Abstract Climate assistance funds have become a crucial source of support for developing countries in combating climate change. The ability of these funds to fully realize their potential in promoting sustainable development is crucial to the mission of building a shared future for humanity. This study focuses on one of the objectives of climate assistance funds — enhancing the economic development of recipient countries. First, based on the "Unbalanced Growth Model," the paper demonstrates that climate assistance funds can enhance the economic development of recipient countries once they reach a certain level. Second, empirical and robustness tests using data from 117 recipient countries in the OECD-DAC database validate the theoretical findings. The results show that climate assistance funds can positively impact the economies of recipient countries by promoting improvements in innovation and financial development. Additionally, the governance level of recipient countries moderates the economic effects of climate assistance funds, with lower governance levels correlating to a lower impact threshold. Finally, in terms of the choice of financial instruments, Climate mitigation funds are better suited for grants, while climate adaptation funds are more appropriate for loans; in terms of the flow of climate assistance funds, climate mitigation funds significantly impact social development, while climate adaptation funds more strongly affect economic development and environmental protection.

Keywords: Climate assistance funds; Economic effects; Level of financial development; Technological innovation; Level of governance (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11027-025-10220-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:masfgc:v:30:y:2025:i:5:d:10.1007_s11027-025-10220-1

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11027

DOI: 10.1007/s11027-025-10220-1

Access Statistics for this article

Mitigation and Adaptation Strategies for Global Change is currently edited by Robert Dixon

More articles in Mitigation and Adaptation Strategies for Global Change from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().