Analysis of the AidData database, which now contains more than one million project level records, uncovers two key trends in environmental aid. First, an increasing proportion of environmental aid is being allocated to projects designed to address global environmental issues. Second, environmental aid is increasingly being allocated bilaterally, through national aid agencies, rather than multilaterally, through the international organizations and channels created for this purpose.
From local to global issues
Environmental projects can be divided into 'green' and 'brown' categories. Brown projects are those designed to generate primarily local environmental benefits. Such projects include water sanitation, desalination and solid waste treatment. Green projects are those designed to generate benefits that are substantially external to the recipient country, and may include projects such as climate change mitigation, biodiversity preservation, and ozone preservation.
While overall levels of brown aid remained relatively constant during the 2000s, levels of green aid doubled, increasing from roughly US$3 billion per year to roughly US$6 billion (Figure 1). As a proportion of all environmental aid, green aid grew from 20 per cent in the early 1990s to 40 per cent in the late 2000s. These trends likely reflect recent international commitments targeting climate change.
Bilateral and multilateral aid developing countries has been that any requirement to pursue economic development in a way that is less damaging to the global environment be paid for, in part, by developed countries. Environmental aid flows have increased significantly, from roughly US$10 billion per year in the early 2000s, to roughly US$15 billion per year by the end of the decade. However, these totals mask changing trends in the delivery of environmental aid.
Between 1990 and 2008 the amount of environmental aid channeled through multilateral institutions increased by roughly 16 per cent. In contrast, bilateral environmental aid levels more than doubled over the same period, going from US$3.6 billion to US$6.5. In relative terms, 58 per cent of environmental aid was allocated through multilateral agencies from 1990-94. By 2005-08, this figure had dropped to 42 per cent (Figure 2).
This trend results in part to an increase in the proportion of green aid being delivered bilaterally. From 1990-94, donors split their allocation of green aid roughly evenly between multilateral and...