Development Cooperation with a Focus on Mitigating Greenhouse Gas Emissions is Effective

Bonn, 20 November 2024 – With a view to limiting global warming, German development cooperation strives to mitigate greenhouse gas emissions in developing and emerging countries. The Federal Ministry for Economic Cooperation and Development (BMZ) therefore supports partner countries to mitigate climate change. The German Institute for Development Evaluation (DEval) has analysed the international interventions under the political responsibility of the BMZ. The results show that German and international development finance can effectively mitigate greenhouse gas emissions if interventions support the energy sector or have climate change mitigation as their principal objective.

Climate change mitigation in developing and emerging countries

Limiting the negative consequences of the climate crisis requires a substantial reduction in greenhouse gas emissions. In order to save emissions, it is necessary to reduce the consumption of fossil fuels, expand the use of renewable energies and improve energy efficiency, for example. However, this is difficult to finance and implement, especially for developing and emerging countries. The German Federal Government is therefore participating in the undertaking of industrialised nations to provide developing countries with a total of USD 100 billion annually for climate change mitigation and adaptation from 2020. The Federal Ministry for Economic Cooperation and Development (BMZ) supports partner countries in implementing climate-relevant interventions. In this context, it disproportionately favours poorer countries and those with comparatively democratic structures.

Development interventions mitigate emissions to varying degrees

The results of the evaluation show that climate policy interventions in the energy sector can reduce emissions. Development finance with climate change mitigation as its principal objective is also proving to be effective. In contrast, no emission-mitigating effect was found for interventions that only have climate change mitigation as a significant objective. One plausible reason for this lies in the reporting, as there are indications that German and international climate-relevant development finance is actually lower than reported. In particular, projects reported as having climate change mitigation as a significant objective lack clear evidence of their climate relevance.

DEval recommends continuing to substantially promote the effective interventions in the portfolio of mitigation-relevant development finance. In order to enhance the effectiveness and transparency of development funds, mitigation effects should be given a higher priority as a component of climate financing objectives and should be better recorded. Moreover, their climate relevance should be presented even more clearly in reporting.

The conflict of objectives between socio-economic development and climate change mitigation

As climate change mitigation is a global public good, climate-relevant development cooperation faces the challenge of promoting socio-economic development in partner countries, while at the same time maximising its contribution to reducing emissions. Thus, there is a conflict of objectives here: Climate change mitigation is efficient where the costs of reducing emissions are low, but this would mean that poorer countries, which usually have low emissions, are neglected and growth opportunities are missed.

“Viewed in isolation, emission mitigation should take place where it is most cost-effective,” says DEval Director Prof Jörg Faust. “However, this may be at the expense of development needs in poorer regions. A purely efficient approach that decouples climate change mitigation from a country’s socio-economic development could, in extreme cases, violate the do-no-harm principle. In order to avoid negative impacts and maximise synergies, development cooperation should therefore pay more attention to the conflict of objectives between promoting socio-economic development and mitigating emissions.”

Data and Methods

The evaluation examined climate change mitigation interventions in the development cooperation of the BMZ, Germany, and the OECD donor community, using the results as a basis for assessing their relevance, effectiveness, and development impact. It primarily used statistical comparative methods.

The complete report, “Climate Change Mitigation through Development Cooperation – Contribution of German development cooperation to mitigating greenhouse gas emissions in developing countries”, is available on the DEval website.