Climate or development: Is ODA diverted from its original purpose?

We analyze the interaction of climate and development policy that has taken place since the early 1990s. Increasing dissatisfaction about the results of traditional development cooperation and the appeal of climate policy as a new policy field led to a rapid reorientation of aid flows. At the turn of the century, over 7% of aid flows were spent on greenhouse gas emissions mitigation. However, the contribution of emissions mitigation projects to the central development objective of poverty reduction as specified in the Millennium Development Goals is limited and other project types are likely to be much more effective. Adaptation to climate change can be expected to have higher synergies with poverty alleviation than mitigation, primarily through its impact on health, the conservation of arable land and the protection against natural disasters. An analysis of the Clean Development Mechanism shows that projects addressing the poor directly are very rare; even small renewable energy projects in rural areas tend to benefit rich farmers and the urban population. Use of development aid for CDM projects and / or their preparation via capacity building is thus clearly not warranted. --ODA,climate policy,poverty reduction,MDGs,CDM,mitigation,adaptation

UN approval of greenhouse gas emission reduction projects in developing countries: The political economy of the CDM Executive Board

The approval of methodologies and individual projects in the context of the Kyoto Protocols Clean Development Mechanism (CDM) is often an issue of national interest. Decisions of the CDM Executive Board (EB) can thus be expected to be highly politicized. Based on data for about 250 methodologies and about 1000 projects discussed by the EB so far, this paper provides a first econometric analysis of this hypothesis. The results suggest that indeed, along with formal quality criteria, political-economic variables determine the final EB decision. This is most clearly the case for decisions on CDM projects which are far less transparent than those on CDM methodologies. In particular, EB membership of the country or countries concerned raises the chances of a project to be approved. Moreover, clearly, with rising numbers of methodologies and projects, EB decision making has become stricter over time. --International climate policy,CDM,political economy,rational choice,international organization

CDM: Current status and possibilities for reform

The Clean Development Mechanism (CDM) has seen a spectacular rise of activity since mid-2005 that has led to more than 400 project submissions with a combined estimated emission reduction volume of 570 million t CO2 eq. until the end of the commitment period. Several technologies have been mobilised in a large scale that had not been predicted to play any significant role. However, many observers continue to criticize the CDM Executive Board's handling of the project cycle and the lack of development benefits of CDM projects. Therefore, calls for CDM reform have gained strength. An analysis of the CDM project portfolio shows that Least Developed Countries and Africa have so far been sidelined. However, more small-scale projects have been submitted than expected from theoretical analyses of project cycle transaction cost, maybe due to high CER price expectations and a high share of unilateral projects. While developing country companies have been able to capture almost half of the CDM consultancy market, they have not made an inroad into validation and verification. The concentration of host countries has increased. Development benefits of CDM projects are often limited, especially of the large projects destroying industrial gases. The rejection rate of proposed methodologies remains stubbornly high but consolidation of methodologies simplifies document submissions. The time lag from submission of project documentation to registration has recently been falling. Additionality testing is a key element that also supports the development target of the CDM. --CDM,sustainable development,baselines,additionality,reform

Baseline Determination at Government Discretion: Multi-Project Baselines for the First Track of Joint Implementation?

The "first track" of Joint Implementation under the Kyoto Protocol gives host and investor countries total freedom in choosing a baseline for a project reducing or sequestering greenhouse gases. This is due to the fact that an overly generous granting of emission credits leads to a corresponding reduction of the host country's emission budget. Standardised, multi-project baselines can reduce transaction costs, especially in relatively homogeneous sectors such as electricity production or landfill methane collection. Host countries need capacity to calculate such baselines which currently does not exist. "Boundary organisations" can bridge the gap between technical analysis and strategic considerations. Interviews with government officials and other stakeholders in East European EU accession countries lead us to the conclusion that countries have not yet realised the chances and pitfalls of baseline definition under the first track, especially as they assume that the EU will define the "acquis communautaire" as the baseline. However, this would make international emissions trading more attractive than JI.Joint Implementation, baselines, institutions, host countries, Environmental Economics and Policy, Q25, O13,

Climate business for poverty reduction? The role of the World Bank

The World Bank is increasingly active in the area of climate change mitigation. While it justifies this engagement with its poverty reduction objective and its capacity to pave the way for new business activities in developing countries, critics blame the World Bank as a "climate profiteer” and as an unfair competitor in private markets. Our econometric analysis of over 2,000 projects registered until May 2010 under the Clean Development Mechanism (CDM) of the Kyoto Protocol allows us to compare the activities of the Bank with those of other, primarily private actors. The results indicate that hardly any of the CDM projects can be considered as strongly pro-poor. Nevertheless, in comparison to the rest of the CDM projects, the Bank's portfolio shows a relatively clearer orientation towards poor countries. Within these countries, however, the Bank does not show any particular pro-poor focus, and tends to implement those projects that are commercially most attractive. Moreover, there is no evidence of the Bank phasing out its activities once the market becomes fully operational, which goes against its professed pioneering and catalytic role in carbon market

Old wine in new bottles? Does climate policy determine bilateral development aid for renewable energy and energy efficiency?

Since the UN Conference on Environment and Development in Rio de Janeiro in 1992 bilateral and multilateral donors have stressed that development assistance has increasingly been oriented towards climate-friendly interventions. With respect to energy aid, this should lead to a substantial increase in projects related to renewable energy and energy efficiency. Given a new database of hundreds of thousands of bilateral development assistance projects, we can assess whether such a reorientation has indeed taken place. We find that, contrary to expectations, the share of bilaterally-funded renewable energy and energy efficiency projects did not increase over the period from 1980 to 2008. This share fluctuated greatly, following the price of oil, peaking with the second oil crisis of the early 1980s. The impacts of global climate policy treaties are minor or inexistent. ‘Traditional’ renewable energies such as hydro and geothermal declined, while “new” renewables showed two peaks in the early 1980s and late 1990s. Differences between donor countries are huge. Several countries, including climate sceptics such as the US and Australia, but also the UK and Switzerland, saw a consistent decline. The self-proclaimed climate pioneers such as Germany, the Netherlands, Norway and Sweden show peaks related to both the oil crises and international climate policy. Only in Austria, Denmark, Finland and Spain can ‘new’ climate mitigation development assistance be found

Transnational climate governance initiatives: designed for effective climate change mitigation?

The Paris Agreement of December 2015 set a highly ambitious target for global climate change mitigation, but it remains unclear how it will be reached, and the individual countries’ pledges do not add up to the overall target. Can transnational climate governance initiatives be expected to fill the gap? We assess 109 such initiatives based on four design criteria: existence of mitigation targets; incentives for mitigation; definition of a baseline; and existence of a monitoring, reporting, and verification procedure. About half of the initiatives do not meet any of these criteria, and not even 15% satisfy three or more. Many initiatives were created only for the purpose of networking. Orchestration by national governments and international organizations increases the number of criteria met. On average, the mitigation focus of new initiatives was highest during the “heyday” of the international climate policy regime between 2005 and 2010. While mitigation-oriented entrepreneurial initiatives are generally started only in response to existing regulation, subnational governments and NGOs show some attempts to go beyond that and compensate for insufficient regulation at the national and international level. Yet, given the low overall quality assessment, transnational climate governance initiatives cannot be expected to fill the “mitigation gap.

Climate or development: is ODA diverted from its original purpose?

We analyze the interaction of climate and development policy that has taken place since the early 1990s. Increasing dissatisfaction about the results of traditional development cooperation and the appeal of climate policy as a new policy field led to a rapid reorientation of aid flows. At the turn of the century, over 7% of aid flows were spent on greenhouse gas emissions mitigation. However, the contribution of emissions mitigation projects to the central development objective of poverty reduction as specified in the Millennium Development Goals is limited and other project types are likely to be much more effective. Adaptation to climate change can be expected to have higher synergies with poverty alleviation than mitigation, primarily through its impact on health, the conservation of arable land and the protection against natural disasters. An analysis of the Clean Development Mechanism shows that projects addressing the poor directly are very rare; even small renewable energy projects in rural areas tend to benefit rich farmers and the urban population. Use of development aid for CDM projects and / or their preparation via capacity building is thus clearly not warranted. We further analyze whether the use of development aid for climate policy could be justified as a countermeasure against the emission increase related to successful development itself. However, countries that are achieving an improvement of human development from a low level are unlikely to increase their energy consumption substantially. Only at a level where the middle class expands rapidly, energy consumption and greenhouse gas emissions soar. Thus targeting middle class energy consumption by appliance efficiency standards and public transport-friendly urban planning are the most effective measures to address developing country emissions. Rural renewable energy provision in poor countries has a much higher impact on poverty, but a much lower impact on greenhouse gas emissions. We conclude that while there are valid reasons for long-term collaboration with emerging economies on greenhouse gas mitigation, there should be a separate budget line for such activities to avoid "obfuscation” of a decline of resources aimed at poverty alleviation. Nevertheless, mitigation will remain attractive for donors because it ensures quick disbursements and relatively simple measures of success. Moreover, mitigation activities in developing countries provide politicians in industrialized countries with a welcome strategy to divert the attention of their constituencies from the lack of success in reducing greenhouse gas emissions domesticall