Financing climate change in the conditions of the Slovak agricultural sector

Slovak University of Agriculture in Nitra, Faculty of Economics and Management, Department of Finance, Tr. Andreja Hlinku 2, 949 76 Nitra, Slovak Republic

^* Corresponding author: ivan.holubek@uniag.sk

Abstract

Research background: Globalization is a powerful engine of structural changes in national, regional and global economies. Except for positive economic effects, globalization also has negative effects. One of them is the deterioration of the global environmental situation and the ongoing global climate change.

Purpose of the article: The paper focuses on the current global financing trends to mitigate the effects of climate change. Generally financial funds come from international, national and regional actors. Governments have a range of funding mechanisms and resources at their disposal. Within the EU, these are the Structural Funds, investment funds and the financing from European Investment Bank. At the national level, it is financial assistance from state budgets and local government budgets.

Methods: The paper provides literature review of the possibilities of financing climate change at the national and international level and, using analysis and synthesis, points to future trends and sources of financing climate change. We also analyse the proposal of Common agricultural policy 2021-2027 and effects on Slovak agriculture. European Commission wants member states to use up to 40% of the budget for environmental goods and climate change. Slovakia might have problems to spend the allocation due to the fact, that most of the money will be voluntary schemes. Farmers will have the option to participate.

Findings & Value added: Agriculture is seriously exposed to the adverse effects of climate change as agricultural activities are directly depending on climate conditions. The article analyses in detail the possibilities and sources of financing adaptation measures in the Slovak agricultural sector.