Financial Transparency Coalition

The Global Corruption Report: Climate Change sets out practical guidelines to prevent corruption undermining climate change measures and calls on governments, international organisations, businesses and civil society to ensure good governance in climate policy.

“The urgent need to respond to climate change needs to be enhanced by transparency and accountability. Oversight must be built into all climate-related initiatives from the start,” said Huguette Labelle, chair of Transparency International. “Good governance now will help ensure the success of the impact of climate change policy and funding.”

“Bangladesh is at the frontline in the battle to combat climate change. How Bangladesh manages climate governance and ensures transparency and accountability in the use of climate change funds can provide lessons for governments and civil society around the world. The recommendations in the report come at a critical time,” says Iftekhar Zaman, executive director of Transparency International Bangladesh.

Under global climate agreements, substantial new funding from governments and multilateral agencies will be made available to finance mitigation of climate change, such as renewable energy projects like wind farms or solar power plants, andadaptation to it, such as constructions of sea walls, irrigations systems and disaster-ready housing.

None of the 20 countries expected to be most affected by climate change – where much of this money will be spent – scores higher than 3.6 on the TI’s Corruption Perceptions Index, in which 0 indicates perception of extremely corrupt and 10 is very clean. Governments must ensure transparent oversight of how climate change funds are spent, which can be enhanced by civil society monitoring.

The report combines analysis from more than 50 leading climate change experts from 20 countries tackling a wide range of issues including:

• the politics of climate change and accountability of funding institutions
• the role of the private sector
• the integrity of carbon markets
• the response to climate change impacts in developing countries (climate-proofing infrastructure, preparing for climate migration and improving disaster management)
• Forestry governance

Public participation and transparent oversight
The report recommends greater public participation, access to information and accountability to make climate governance more effective. This would limit the potential for conflicts of interest in decision-making and the negative effects that lobbying and special interests can play in setting climate policy.

The report warns of the risk of a green resource curse. New technologies needed to replace fossil fuels, such as solar panels, require different natural resources. It is important that the mining industry that exploits these resources is transparent and publicly discloses payments to governments so that citizens can ensure the proceeds are used for their benefits.

Similarly, governments that sell land for bio-fuel cultivation, estimated to be 10 per cent of transport fuels in many of the world’s leading economies by 2030, must allow for public participation and oversight so that local communities’ land rights are respected.

Keeping forests clean and green
US$28 billion of climate financing is expected to flow annually to countries with large tropical forests to discourage deforestation and preserve this form of natural carbon storage. Illegal logging, worth more than US$10 billion a year, is already fuelled by corruption of customs and land management authorities. The report highlights that some governments have already claimed credits for fictitious forest plantation projects.

Case studies from Austria, Bangladesh, Bolivia, Columbia, Kenya, Philippines, Spain, and the United States illustrate the global dimension of the climate change challenges facing the planet.

“Corruption holds nothing sacred, not even our planet’s future. Failure to properly govern climate change measures now will not only lead to misallocated resources and fraudulent projects today, but also hurts future generations,” said Labelle.