Climate of Broken Promises: What Determines Recycled Climate Finance?

At the 2009 Copenhagen Summit, developed countries pledged to collectively mobilise and provide 100 billion dollars annually by 2020 in new and additional climate finance to support developing nations in mitigating and adapting to climate change. Despite this commitment, many developed countries have failed to ensure that climate finance was truly ‘new and additional’ to their existing development support. This paper employs an ordered logit model to examine the country characteristics that influence nations’ provision levels of new and additional climate finance. The analysis focuses on economic capability and political commitment determinants among 23 Annex-II Parties between 2011 and 2020. The results demonstrate that both economic capability and political commitment influence the level of new and additional climate finance provided by donor countries. Wealthier countries and those with high government debt and unemployment rates are less likely to provide the highest levels of new and additional climate finance. However, short-term economic growth does not significantly impact countries’ provision levels. While public environmental concern does not translate into increased financial contributions, government environmental preferences appear to have a limited impact. Specifically, countries demonstrating stronger commitments to new and additional climate finance tend to participate in a greater number of IEAs. Although the composition of the cabinet does not influence climate finance contributions, countries with higher GHG emissions evolution levels tend to be larger contributors of new and additional climate finance. In addition, the largest current GHG emitters often shoulder a smaller share of the financial burden.