Does climate mitigation development finance advance energy production from renewable sources in Cameroon?

Abstract

A major policy outcome of the Paris climate treaty is the direct transfer of climate funds to developing countries to enhance renewable energy production. This study considers whether climate-related mitigation finance advances non-hydroelectric power renewable electricity production in Cameroon, with data from 2000 to 2021. The Autoregressive Distributed Lag bounds test and asymmetric Autoregressive Distributed Lag techniques were employed for analytical purposes and results robust-checked using threshold regression and least squares with breakpoints. The study finds that climate mitigation development finance promotes renewable electricity production but the effect is insignificant. Quantitative results from Autoregressive Distributed Lag estimates show that renewable electricity production increased by 0.002 ​% and 0.003 ​% following a 1 ​% rise in mitigation finance in the short and long run respectively. Furthermore, the discrete threshold and least squares with breakpoints regression results reveal a marginal increase of 0.0007 ​% and 0.0009 ​% in renewable electricity generation respectively as a result of a 1 ​% increase in climate mitigation finance. No significant causality from climate mitigation development finance to renewable electricity production was found. This study recommends that government should prioritize the production of electricity from other renewable sources apart from hydroelectricity while developed countries should increase their financial contributions towards climate mitigation finance.