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Adaptation Funding and Greenhouse Gas Emissions: Halo Effect or Complacency?

Abstract:
This paper contributes to the debate surrounding the impact of adaptation to climate change on the incentives to abate greenhouse gases emissions. Using data from the World Development Indicators and various adaptation funds under the UNFCCC framework, this paper provides an empirical analysis of the relation between adaptation and emissions. We specifically test whether adaptation measures to climate change affect emissions of greenhouse gases in a world where adaptation funds are available. Using a staggered difference-in-differences approach and an event study analysis, we find that receiving adaptation funding significantly and negatively affects several CO2 emissions measures, providing preliminary evidence of the presence of a halo effect of adaptation funding. We do not find evidence of a significant change in the emissions of methane, nitrous dioxide and other greenhouse gases.

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Keywords: Adaptation, Climate Change, GHG Emissions, Halo Effect

DOI: 10.5547/01956574.43.4.sdjo

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Published in Volume 43, Number 4 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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