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Exploring the Schemes for Green Climate Fund Financing: International Lessons

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  • Cui, Lianbiao
  • Huang, Yuran

Abstract

Asa key issue in recent international climate summits, the Green Climate Fund (GCF) is confronted with the problem of insufficient financing. This paper intends to explore several schemes for raising the public finance of the GCF among developed countries. Lessons from three main ongoing international financing mechanisms have been drawn, including the United Nations (UN) membership dues, Official Development Assistance (ODA), and the Global Environment Facility (GEF). The indexes that reflect historical emission responsibility (HR) and ability to pay (AP) are also used to share the burden. Results reveal that the ongoing international financing mechanisms vary in their burden sharing results and the shares of existing donors are driven by highly complex reasons. Weighting the HR, UN, and GEF approaches with the Preference Score Compromises (PSC) method could yield a compromise scheme in which the regional contributions are highly similar to those under the GCF initial resource mobilization from 2015 to 2018. GCF financing heavily depends on contributions from the developed countries even if the donor parties are extended to emerging economics. This paper also finds that the decision of the United States to withdraw from climate finance will significantly increase the burden for other donors, particularly for the European Union the contribution share of which is predicted to increase to nearly 14 percentage points. The schemes proposed in this study can provide a useful reference for GCF financing.

Suggested Citation

  • Cui, Lianbiao & Huang, Yuran, 2018. "Exploring the Schemes for Green Climate Fund Financing: International Lessons," World Development, Elsevier, vol. 101(C), pages 173-187.
    • Handle: RePEc:eee:wdevel:v:101:y:2018:i:c:p:173-187
    DOI: 10.1016/j.worlddev.2017.08.009
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    4. Joyeeta Gupta & Louis Lebel, 0. "Access and allocation in earth system governance: lessons learnt in the context of the Sustainable Development Goals," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 0, pages 1-18.
    5. Rongyan Liu & Deqing Wang & Li Zhang & Lihong Zhang, 2019. "Can green financial development promote regional ecological efficiency? A case study of China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 95(1), pages 325-341, January.
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    8. Nadia Basty & Dorsaf Azouz Ghachem, 2022. "A Sectoral Approach of Adaptation Finance in Developing Countries: Does Climate Justice Apply?," Sustainability, MDPI, vol. 14(17), pages 1-18, August.
    9. Yi, Bo-Wen & Xu, Jin-Hua & Fan, Ying, 2019. "Coordination of policy goals between renewable portfolio standards and carbon caps: A quantitative assessment in China," Applied Energy, Elsevier, vol. 237(C), pages 25-35.
    10. Bhatnagar, S. & Sharma, D., 2022. "Evolution of green finance and its enablers: A bibliometric analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 162(C).
    11. Kevin Grecksch & Carola Klöck, 0. "Access and allocation in climate change adaptation," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 0, pages 1-16.
    12. Vilija Aleknevičien&# & Asta Bendoraityt&#, 2023. "Role of Green Finance in Greening the Economy: Conceptual Approach," Central European Business Review, Prague University of Economics and Business, vol. 2023(2), pages 105-130.
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    14. Nana Liu & Chuanzhe Liu & Yufei Xia & Yi Ren & Jinzhi Liang, 2020. "Examining the Coordination Between Green Finance and Green Economy Aiming for Sustainable Development: A Case Study of China," Sustainability, MDPI, vol. 12(9), pages 1-26, May.
    15. Zhang, Linling & Long, Ruyin & Chen, Hong, 2019. "Do car restriction policies effectively promote the development of public transport?," World Development, Elsevier, vol. 119(C), pages 100-110.
    16. Ismi Rajiani & Sebastian Kot, 2018. "The Prospective Consumers of the Indonesian Green Aviation Initiative for Sustainable Development in Air Transportation," Sustainability, MDPI, vol. 10(6), pages 1-16, May.
    17. Kang Pan & Feng He, 2022. "Does Public Environmental Attention Improve Green Investment Efficiency?—Based on the Perspective of Environmental Regulation and Environmental Responsibility," Sustainability, MDPI, vol. 14(19), pages 1-20, October.
    18. Yanan Yu & Yong He & Xuan Zhao & Li Zhou, 2022. "Certify or not? An analysis of organic food supply chain with competing suppliers," Annals of Operations Research, Springer, vol. 314(2), pages 645-675, July.
    19. Joyeeta Gupta & Louis Lebel, 2020. "Access and allocation in earth system governance: lessons learnt in the context of the Sustainable Development Goals," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 20(2), pages 393-410, June.
    20. Vu Minh Ngo & Huan Huu Nguyen & Hiep Cong Pham & Long Hoang Nguyen, 2024. "Engage or retreat? Exploring the determinants of participation in Climate Finance public-private partnerships," Climatic Change, Springer, vol. 177(7), pages 1-30, July.
    21. Meng Xu & Zhongfeng Qin & Yigang Wei, 2023. "Exploring the financing and allocating schemes for the Chinese Green Climate Fund," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(3), pages 2487-2508, March.
    22. Xinyue Yang & Ye Song & Mingjun Sun & Hongjun Peng, 2020. "Strategies for Capital Constrained Timber and Carbon Sink Supply Chain under the Cap-and-Trade Scheme," Sustainability, MDPI, vol. 12(11), pages 1-15, May.
    23. Juan David González-Ruiz & Sergio Botero-Botero & Eduardo Duque-Grisales, 2018. "Financial Eco-Innovation as a Mechanism for Fostering the Development of Sustainable Infrastructure Systems," Sustainability, MDPI, vol. 10(12), pages 1-19, November.
    24. Chen, Yufeng & Ma, Yanbai, 2021. "Does green investment improve energy firm performance?," Energy Policy, Elsevier, vol. 153(C).

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