Climate impact auctions: an underused tool for green subsidies in the Global South.
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| Title: | Climate impact auctions: an underused tool for green subsidies in the Global South. |
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| Authors: | Matthey, Max Alexander1 (AUTHOR) max.matthey@uni-wh.de, Hollis, Aidan2 (AUTHOR), Brandi, Clara3 (AUTHOR), Kobiela, Georg4 (AUTHOR), Roth, Benjamin5 (AUTHOR), Silberberger, Magdalene6 (AUTHOR) |
| Source: | Climate Policy (Taylor & Francis Ltd). May2025, Vol. 25 Issue 5, p806-814. 9p. |
| Abstract: | The urgency of reducing emissions globally requires the participation of Low- and Middle-Income Countries, which represent over 70% of global emissions. Funding from High-Income Countries' support for a 'just transition' in developing countries through institutions such as the Green Climate Fund has almost exclusively been given as investment-cost subsidies. In contrast, the same industrialized countries extensively use performance-based mechanisms to drive emissions reductions domestically. We explore the advantages and disadvantages of using results-based subsidies allocated through reverse auctions as a tool to support mitigation in Low- and Middle-Income Countries. Results-based subsidies would drive strong responses by giving greater rewards for better performance. By reducing administrative discretion, results-based subsidies would decrease costs and facilitate participation by small- and medium-sized firms. Results-based subsidies would, however, increase capital costs and would reallocate risks from donors to project proponents. Overall, they could be attractive in specific circumstances, specifically for projects that can be competitive, have measurable results, and currently face socially suboptimal investment. Key policy insights: Low- and middle-income countries collectively are responsible for over 70% of global emissions but lack the policies and financial capacity to transition to a low-carbon future. While industrialized countries use results-based payments domestically, their subsidies for emissions reduction and carbon removal in developing countries fund investment rather than reward results. Competitive, results-based subsidies could complement existing funding streams, increase efficiency, and open access to subsidies to small- and medium-sized firms. [ABSTRACT FROM AUTHOR] |
| Copyright of Climate Policy (Taylor & Francis Ltd) is the property of Taylor & Francis Ltd and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) | |
| Database: | GreenFILE |
| FullText | Text: Availability: 0 |
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| Header | DbId: 8gh DbLabel: GreenFILE An: 186875204 AccessLevel: 6 PubType: Academic Journal PubTypeId: academicJournal PreciseRelevancyScore: 0 |
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| Items | – Name: Title Label: Title Group: Ti Data: Climate impact auctions: an underused tool for green subsidies in the Global South. – Name: Author Label: Authors Group: Au Data: <searchLink fieldCode="AR" term="%22Matthey%2C+Max+Alexander%22">Matthey, Max Alexander</searchLink><relatesTo>1</relatesTo> (AUTHOR)<i> max.matthey@uni-wh.de</i><br /><searchLink fieldCode="AR" term="%22Hollis%2C+Aidan%22">Hollis, Aidan</searchLink><relatesTo>2</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Brandi%2C+Clara%22">Brandi, Clara</searchLink><relatesTo>3</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Kobiela%2C+Georg%22">Kobiela, Georg</searchLink><relatesTo>4</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Roth%2C+Benjamin%22">Roth, Benjamin</searchLink><relatesTo>5</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Silberberger%2C+Magdalene%22">Silberberger, Magdalene</searchLink><relatesTo>6</relatesTo> (AUTHOR) – Name: TitleSource Label: Source Group: Src Data: <searchLink fieldCode="JN" term="%22Climate+Policy+%28Taylor+%26+Francis+Ltd%29%22">Climate Policy (Taylor & Francis Ltd)</searchLink>. May2025, Vol. 25 Issue 5, p806-814. 9p. – Name: Abstract Label: Abstract Group: Ab Data: The urgency of reducing emissions globally requires the participation of Low- and Middle-Income Countries, which represent over 70% of global emissions. Funding from High-Income Countries' support for a 'just transition' in developing countries through institutions such as the Green Climate Fund has almost exclusively been given as investment-cost subsidies. In contrast, the same industrialized countries extensively use performance-based mechanisms to drive emissions reductions domestically. We explore the advantages and disadvantages of using results-based subsidies allocated through reverse auctions as a tool to support mitigation in Low- and Middle-Income Countries. Results-based subsidies would drive strong responses by giving greater rewards for better performance. By reducing administrative discretion, results-based subsidies would decrease costs and facilitate participation by small- and medium-sized firms. Results-based subsidies would, however, increase capital costs and would reallocate risks from donors to project proponents. Overall, they could be attractive in specific circumstances, specifically for projects that can be competitive, have measurable results, and currently face socially suboptimal investment. Key policy insights: Low- and middle-income countries collectively are responsible for over 70% of global emissions but lack the policies and financial capacity to transition to a low-carbon future. While industrialized countries use results-based payments domestically, their subsidies for emissions reduction and carbon removal in developing countries fund investment rather than reward results. Competitive, results-based subsidies could complement existing funding streams, increase efficiency, and open access to subsidies to small- and medium-sized firms. [ABSTRACT FROM AUTHOR] – Name: AbstractSuppliedCopyright Label: Group: Ab Data: <i>Copyright of Climate Policy (Taylor & Francis Ltd) is the property of Taylor & Francis Ltd and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.</i> (Copyright applies to all Abstracts.) |
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| RecordInfo | BibRecord: BibEntity: Identifiers: – Type: doi Value: 10.1080/14693062.2024.2411319 Languages: – Code: eng Text: English PhysicalDescription: Pagination: PageCount: 9 StartPage: 806 Titles: – TitleFull: Climate impact auctions: an underused tool for green subsidies in the Global South. Type: main BibRelationships: HasContributorRelationships: – PersonEntity: Name: NameFull: Matthey, Max Alexander – PersonEntity: Name: NameFull: Hollis, Aidan – PersonEntity: Name: NameFull: Brandi, Clara – PersonEntity: Name: NameFull: Kobiela, Georg – PersonEntity: Name: NameFull: Roth, Benjamin – PersonEntity: Name: NameFull: Silberberger, Magdalene IsPartOfRelationships: – BibEntity: Dates: – D: 01 M: 05 Text: May2025 Type: published Y: 2025 Identifiers: – Type: issn-print Value: 14693062 Numbering: – Type: volume Value: 25 – Type: issue Value: 5 Titles: – TitleFull: Climate Policy (Taylor & Francis Ltd) Type: main |
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