DRI Working Paper No. 49
By Kevin Davis, NYU and Sarah Dadush, NYU

Getting Climate-Related Conditionality Right
Conditionality has gotten a bad name in development finance. But it may be rehabilitated by the emerging climate change regime. Mitigating climate change by reducing emissions of greenhouse gases (GHGs) from developing countries will require substantial amounts of capital. Some of that capital will come from individuals or organizations who insist that their funds be used in ways that tend to promote mitigation. In other words, they will insist on conditionality. This raises a number of policy concerns, including several that are reminiscent of debates about conditionality in other contexts. The first part of this paper provides an overview of existing forms of climate related conditionality. The second part sets out the main substantive issues involved. The third part considers implications for institutional design and the process by which conditions are formulated.