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Does energy‐related aid affect emissions? Evidence from a global dataset
Author(s) -
Bhattacharyya Sambit,
Intartaglia Maurizio,
McKay Andy
Publication year - 2018
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12409
Subject(s) - kuznets curve , economics , panel data , empirical evidence , estimator , greenhouse gas , econometrics , energy (signal processing) , macroeconomics , natural resource economics , public economics , ecology , philosophy , statistics , mathematics , epistemology , biology
Abstract Donor countries have been using international aid in the field of energy for at least three decades. The stated objective of this policy is to reduce emissions and promote sustainable development in the global South. In spite of the widespread use of this policy tool, very little is known about its effect on emissions. In this paper we perform an empirical audit of the effectiveness of energy‐related aid in tackling CO 2 and SO 2 emissions. Using a global panel dataset covering 128 countries over the period 1971–2011 and estimating a parsimonious model using the Anderson and Hsiao estimator, we do not find any evidence of a systematic effect of energy‐related aid on emissions. We also find that the non‐effect is not conditional on institutional quality or level of income. Countries located in Europe and Central Asia do better than others in utilizing this aid to reduce CO 2 emissions. Our results are robust after controlling for the environmental Kuznets curve, country fixed effects, country‐specific trends, and time‐varying common shocks.