Does environmental aid make a difference? Analyzing its impact in developing countries

Abstract

Amidst escalating global environmental challenges, does environmental aid drive tangible conservation outcomes in developing countries or does it merely perpetuate the rift between economic ambition and environmental responsibility? Using a comprehensive ten-year dataset from the OECD, World Bank, Climate Watch, and the Climate Change Laws of the World database, we analyze the relationship between environmental aid and environmental conservation outcomes in recipient countries. Our results indicate that although aid can influence policy development, there is a weak correlation with outcomes such as increased forest cover, expansion of protected areas, and reduced CO2 emissions. Moreover, the pronounced roles of GDP and population in shaping these outcomes underline the complex interplay of environmental challenges with economic growth and demographic shifts. This dynamic, coupled with the evident mismatch between environmental aid delivery and tangible conservation improvements, emphasizes the need to reconsider current aid distribution strategies. In light of current environmental challenges, this research offers valuable insights into the effectiveness of environmental aid in developing countries and suggests a way forward for more targeted and impactful conservation efforts.