Climate Finance and the Diffusion of Local Inclusion Norms

The Adaptation Fund (AF) and Green Climate Fund (GCF) are two multilateral climate funds working to alleviate the complexity of climate finance and improve financial flows with direct-access entities. Direct-access entities allow national and subnational organizations to receive funding directly, bypassing intermediaries and addressing community needs in mitigation and adaptation projects. Numerous studies show that local inclusion improves the effectiveness of climate finance, but little research focuses on the sentiment of local inclusion in project implementation of different multilateral climate funds. As a result, this thesis poses the following question: How does the type of implementing entity impact the sentiment surrounding local inclusion rhetoric in multilateral climate funds’ project implementation? Norm diffusion theory expects that international implementing entities will express more positive sentiment towards local inclusion rhetoric than direct-access and regional...Show moreThe Adaptation Fund (AF) and Green Climate Fund (GCF) are two multilateral climate funds working to alleviate the complexity of climate finance and improve financial flows with direct-access entities. Direct-access entities allow national and subnational organizations to receive funding directly, bypassing intermediaries and addressing community needs in mitigation and adaptation projects. Numerous studies show that local inclusion improves the effectiveness of climate finance, but little research focuses on the sentiment of local inclusion in project implementation of different multilateral climate funds. As a result, this thesis poses the following question: How does the type of implementing entity impact the sentiment surrounding local inclusion rhetoric in multilateral climate funds’ project implementation? Norm diffusion theory expects that international implementing entities will express more positive sentiment towards local inclusion rhetoric than direct-access and regional entities to fulfill the local inclusion norm. This norm encourages international implementing entities to present themselves as more inclusive due to previous criticism from non-state actors for neglecting stakeholders in development projects. International implementing entities, however, are likely to exploit this norm, presenting themselves as facilitators of inclusion even if this is not the case. As direct-access entities are often assumed to be local, this locality is expected to allow them more flexibility in their perceived sentiment towards local inclusion rhetoric. Sentiment analysis of the project documents from the AF and GCF and the subsequent multiple Ordinary Least Squares (OLS) regressions instead offered two novel contributions to the field of climate finance and climate justice: 1) International implementing entities can diffuse the local inclusion norm in the weaker structured AF and 2) the GCF, with stronger fiduciary management, financial capacity, technical expertise, and strict project document structures, can counter international implementing entities acting as norm entrepreneurs themselves. Understanding how different implementing entities and multilateral climate funds impact sentiment surrounding local inclusion rhetoric helps reveal the underlying power dynamics which obscure or support local inclusion in equitable climate finance.Show less

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Climate Finance and the Diffusion of Local Inclusion Norms