Gianni Ruta - Agency problems in climate change adaptation financing

Part of the Grantham PhD seminar series

Economic impacts caused by weather-related extreme events and gradual climate change will hurt developing country economies the most. International financial transfers are increasingly being sought as crucial to help developing countries adapt. We use contract theory to investigate what factors affect the feasibility of a financing mechanism to deliver adaptation finance at scale while providing an incentive for adaptation to take place at the lowest possible cost. In particular we look at a representative donor’s behavior when different assumptions are made with respect to the observability of adaptation effort by the recipient and with respect to the terms of the financing agreement.

Speaker: Gianni Ruta, PhD student at Grantham Research Institute