Political economy of climate finance

International commitments on climate finance raise the prospect of substantial new capital flows to developing countries. This is widely, and rightly, seen as a positive development and an important element of the international climate change architecture. There is a growing normative debate on how these flows should be originated, governed, managed and monitored.

We know from other fields that, in a context of weak institutions and untested regulatory structures, large financial flows can be associated with undesirable side effects such as rent seeking and corruption. This project explores whether there is the risk of a climate finance ‘curse’ and under which circumstances it might arise.