**Table 5.3: Net and genuine savings rates, in “producer-friendly” and “grabber-friendly” countries. Percent of GDP, year 2000.**

|“Producer-frien<br>|dly”countries<br>|“|“Grabber-frien<br>|dly”countries<br>|“|
|---|---|---|---|---|---|
|Country|Net savings<br>rate|Genuine<br>savings rate”|Country|Net savings<br>rate|Genuine<br>savings rate”|
|Australia|16.1|4.3|Algeria|29.9|-7.3|
|Botswana|29.8|34.4|DRC|-11.5|-14.6|
|Canada|11.5|12.7|Ecuador|18.1|-5.5|
|Chile|11.3|7.0|Mexico|10.4|8.4|
|Ireland|17.6|22.7|Nigeria|17.3|-33.9|
|Malaysia|28.3|20.5|Saudi Arabia|19.5|-26.5|
|New Zealand|6.8|11.8|Sierra Leone|-3.7|-7.1|
|Norway|20.7|18.5|Trinidad and<br>Tobago|16.3|-11.4|
|Thailand|15.9|16.3|Venezuela|21.3|-2.7|
|USA|5.7|8.2|Zambia|-3.9|-4.8|

Source: World Bank (2006b).

A wider question here is however whether the insights gained from the “resource curse” literature are useful to have in mind when discussing the effects of international climate finance for target countries. The natural inference to make from this literature is that countries with poor governance (which are “grabber-friendly”) are not able to productively utilize their given levels of ODA or FDI; and that any planned scale-up of climate-related financial flows in such countries will not be very useful for the receiving countries. This would be diametrically opposite to the situation presumed to face goodgovernance (“producer-friendly”) countries, where climate-related funds can be expected to be put to good use, and have substantial growth effects.

# **6. Specifically on Macroeconomic Implications of Adaptation Finance**

Effectively adapting to climate change is a key issue for the countries that will be hardest hit by such change. Many of these countries belong among the world’s poorest nations, with a correspondingly low capacity for adapting in the absence of outside assistance to do so. Substantial additional aid inflows may this be required to accomplish such adaptation. We will in this section indicate some likely consequences of finance directed at adaptation activity or expenditure, with basis in the discussion above. These effects will, as for other finance, to a large degree depend on their source, and on how they are spent.

As for likely sources of adaptation finance, one needs to distinguish between expenditures related to immediate, autonomous, adaptation, and those related to anticipatory or planned adaptation, in the presence of longer-run (already occurring, and anticipated) climate change. The costs related to autonomous adaptation needs are for the most part placed directly on private-sector agents who must bear these. The degree to which these costs are actually borne by the private sector will clearly depend on their financing ability. A key viewpoint here is that such capacity is low in many (or most) lowincome countries, and that the adaptive response will suffer seriously as a result.

Anticipatory adaptation expenditures are much more likely to be borne by the public sector. Since capacity to respond is likely to highly dependent on the country’s development level, we will also here expect a deficient response given that substantial foreign inflow of funds will not be forthcoming. it then in turn seems likely that most of these funds will need to come from concessional sources including ODA. As opposed to for mitigation, for adaptation there currently (nor in the foreseeable 23