Climate aid is an international financial flow that promotes mitigation and adaptation to climate change while supporting local economic development. These flows may have unintended consequences, potentially exacerbating environmental degradation. This study examines the impact of climate aid on deforestation in Africa from 2001 to 2021. Using a novel dataset of geocoded aid projects that we classify as pursuing climate-related objectives by applying a machine learning model, we find evidence of a causal link between climate aid and forest loss. On average, deforestation increases by 94 hectares for every additional 1 million USD of geocoded climate aid projects disbursed. Over the complete period and spatial extent, 5% of deforestation is linked to the disbursement of climate aid projects.
These effects are heterogeneous and vary by initial forest cover: aid increases deforestation in densely forested areas, while it appears to reduce deforestation where forest cover was initially sparse. Analysis of the mechanisms suggests that the effects are primarily driven by economic funding for mitigation, production-related activities, and particularly agricultural expansion.
Keywords— mitigation and adaptation; tropical deforestation; land conversion
