The Distorting Effects of Bilateral Climate Finance for Mitigation on ODA

Since there is only one climate, reducing greenhouse gas (GHG) emissions can qualify as a perfect global public good. As the benefits are global, climate change mitigation cannot be administered solely with the promotion of the economic development and welfare of developing countries as the main objective, a core eligibility criterion of Official Development Assistance (ODA). Consequently, this puts a question mark on the ODA-eligibility of climate change mitigation. Building on ODA reporting by member countries of the Development Assistance Committee (DAC), the annual total of climate finance sourced from ODA that aimed at climate change mitigation reached approximately USD 30 billion in 2022-2023, representing 20% of their allocable ODA. [...]