Does energy‐related aid affect emissions? Evidence from a global dataset

Abstract

Donor countries have been using international aid in the field of energy for at least three decades. The stated objective of this policy is to reduce emissions and promote sustainable development in the global South. In spite of the widespread use of this policy tool, very little is known about its effect on emissions. In this paper we perform an empirical audit of the effectiveness of energy‐related aid in tackling CO2 and SO2 emissions. Using a global panel dataset covering 128 countries over the period 1971–2011 and estimating a parsimonious model using the Anderson and Hsiao estimator, we do not find any evidence of a systematic effect of energy‐related aid on emissions. We also find that the non‐effect is not conditional on institutional quality or level of income. Countries located in Europe and Central Asia do better than others in utilizing this aid to reduce CO2 emissions. Our results are robust after controlling for the environmental Kuznets curve, country fixed effects, country‐specific trends, and time‐varying common shocks.

The effect of export composition on energy demand: A fresh evidence in the context of economic complexity

“…Noteworthy in this context, however, are the findings by Bhattacharyya et al. (2018), who could not find a systemic effect of energy‐related aid on emissions.…”

“…Other authors highlighted the usefulness of energy reform subsidies in these developing countries as well (e.g., Groot & Oostveen, 2019). Noteworthy in this context, however, are the findings by Bhattacharyya et al (2018), who could not find a systemic effect of energy-related aid on emissions.…”

Does Climate Aid Truly Work for Carbon Emissions Reduction? Evidence from the Belt and Road Countries

“…(Kretschmer et al 2013) examined the impact of total aid, industrial sector aid and energy sector aid on carbon emissions in developing countries and concluded that total aid and industrial sector aid had little impact on carbon emissions in recipient countries, while energy aid helped reduce energy intensity but not carbon emissions. (Bhattacharyya et al 2018) performed an empirical audit of the effectiveness of energy-related aid in tackling CO 2 emissions and showed that aid had no signi cant CO 2 emissions reduction effects. (Chung et al 2018) examined the effects of climate technology-related development nance on CO emissions of the recipient country and showed that climate technology-related development nance did not have a signi cant effect on CO emissions as a whole, but different types of technical aid had heterogeneous effects in different sectors.…”

The structure of the climate debate

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