Does climate aid alleviate carbon lock-in? A global perspective

Climate aid is a form of official development assistance that addresses climate change mitigation and adaptation and plays a crucial role in combating climate change. However, existing empirical evidence does not suggest a clear link between climate aid and carbon lock-in. Based on country-level panel data from 77 countries spanning the period 2002–2020, this paper empirically examines the impact of climate aid on carbon lock-in and the four sub-indicators of carbon lock-in. Moreover, we investigate the mediating role of technological progress and potential impact mechanisms. We find that (1) climate aid has a significant restraining effect on carbon lock-in, and is an effective means of inhibiting the four aspects of carbon lock-in, namely, the lock-in of industry, institution, technology, and social behavior. (2) Technological progress not only directly leads to carbon lock-in eradication, but also synergizes with climate aid, suggesting that the combined influence of technological progress and climate aid can enhance the efficacy of efforts to mitigate carbon lock-in. (3) Climate aid promotes carbon lock-in mitigation by accelerating energy structure transition and industrial structure transition, which are two internal impact mechanisms in the nexus between climate aid and carbon lock-in. These findings offer concrete and practical policy implications to facilitate the development of climate aid and carbon lock-in eradication.