How does achieving NDC impact on public climate finance?

What is it about?

We present the necessity of having sufficient finances to implement measures contained within Nationally Determined Contributions (NDCs). We employ a dynamic model to capture the link between emissions and government budget balance, and our analysis estimates the cost associated with implementing emission-reducing policy. It also measures the gap between what is likely to be funded through existing resources, and what needs to be supplemented through climate finance.

Featured Image

Why is it important?

We conduct an international comparison analysis to quantify public climate finance needs for each country. Using panel data for 40 countries over the period of 1998–2012, the empirical results show that economic growth and commensurate greenhouse gas emissions generate budgetary surpluses, and that these surpluses must be offset by public climate finance if countries are to reduce emissions commensurate with their NDCs. We suggest that this is particularly a challenge for developing countries (notably, the BRIICS). We provide a method for determining the actual amount of public finance required to offset the budgetary shortfall from the climate finance pledged under the Paris Agreement. It is imperative to quantify the extent to which each of the developing countries needs to receive international financial support.

Perspectives