Investigating the complex landscape of climate finance in least developed countries (LDCs)

Abstract

AbstractThis study aimed to investigate the complex landscape of climate finance, assessing the adequacy, predictability, and implications for sustainable development in least developed countries (LDCs). This study is motivated by the pressing need to assess the adequacy, predictability, and implications of climate finance for sustainable development in least developed countries (LDCs). Employing an econometric framework, this study utilizes ARIMA models to analyze time series data (from 2000 to 2021) on climate finance. The analysis revealed a notable gap between the needed and actual climate funding received by LDCs. Despite an annual requirement of $93.7 billion according to the UK-based International Institute for Environment and Development (IIED), LDCs have only received an average of $14.8 billion annually since 2015. The study suggests that climate funding for LDCs lacks predictability and falls short in meeting their needs, potentially facing an 80% decrease by 2030 under certain scenarios. It advocates for a strategic revamp in climate finance mechanisms to ensure adequacy and predictability, urging policymakers and international funding bodies to adopt more robust, fair, and needs-based approaches to climate financing. This research emphasizes the responsibility of developed nations and global agencies in bridging the considerable funding gap faced by LDCs. By integrating advanced forecasting techniques with a comprehensive analysis of global economic and political factors, this study sheds light on the challenges LDCs encounter in securing stable and sufficient climate finance, stressing the urgency for systemic reforms in global climate finance policies.