Climate change

Despite some vocal denials, climate change is now regarded by most scientists and public figures to be a challenge of global proportions. The average global temperature has been rising ever since the use of fossil fuels has been widespread. As early as 2001, researchers warned that climate change poses serious threats to global health and the stability of our societies. For those in international development, the climate crisis is a growing concern as the effects of climate change will disproportionately affect countries in tropical, sub-tropical and equatorial zones of the world. Recent studies demonstrate that the countries that are least prepared to adapt to the climate crisis are also those that will be affected most by it. As a result, increasing attention and financial assistance is being directed to climate mitigation (and to a lesser extent adaption) in the global south. The share of overseas development assistance for climate financing was predicted to reach $68.5 billion in 2020, according to a 2019 report from the OECD.

Climate finance

Funds used for Climate Change interventions are called climate finance (CF). This is defined by the UN Framework Convention on Climate Change (UNFCCC) as 'local, national or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address climate change.'

Under the Paris Agreement (2015), which is part of the UNFCCC, signatories agreed that activities funded by climate finance would be categorised as either for (a) mitigation, to slow climate change; or (b) adaptation, to help adapt to the effects of climate change. Many donors also describe their interventions as contributing to ‘resilience’ - a term used as early as 2011 by the UNDP. However, ‘resilience’ is not a funding category under the Paris Agreement. Projects that are described as contributing to resilience are typically adaptation initiatives, especially around extreme weather events causing worse impacts due to climate change, such as hurricanes, drought or heavy rain. In 2018, 92% of climate finance went to mitigation efforts, 6% for adaptation, and 2% had dual benefits (Buchner et al 2019, 30).

Large funds for any sector often give rise to concerns around corruption. Yet climate financing also poses some unique challenges. The large amount of funding signals a significant risk for corruption within climate finance. But this is not the only risk and other potential risks include: the newness of some laws; increased regulations and mechanisms, many of which are not well understood by those involved in implementation, regulation or law enforcement; the plethora of new actors involved; the rapid evolution of the climate change space; the fact that some aspects of it are highly technical; and that many interventions occur in countries with severe problems of corruption. Financial losses from corruption are notoriously difficult to determine for any sector. However, one estimate for corruption losses related to climate change, is that of the US$13bn of multilateral climate funds allocated to the water sector every year, US$1-2bn are lost to corruption (GIZ 2019, 5).

Corruption and climate change: understanding the link

Anticorruption stakeholders are attuned to identify corruption risks, so it is not difficult for them to understand that billions of dollars in climate finance, being disbursed through novel mechanisms, presents risks. Wider climate change audiences and non-anticorruption specialist, officials and development practitioners present a greater challenge. While some understand the linkages between corruption and climate change, others remain confused about the precise relationship even if they generally accept that corruption is a risk for the implementation of activities.

Some climate change stakeholders do not pay a lot of attention to corruption, as evidenced by the few references in their publications about the issue. Similarly, some anticorruption documents do not mention environmental concerns, including climate change. There are striking examples of the last point. Ghana’s National Anticorruption Action Plan (2012-2021) makes two brief mentions of international efforts to bring attention to the relationships between corruption and environmental governance: noting UNDP has established it has a negative impact on the environment (pg. 13), and recognising that there are new mechanisms to reduce corruption around natural resource exploitation. However, there is no effort to connect corruption and the environment to Ghana or comprehensive reflection on corruption as a systemic risk to climate change- or environment-related activities. This example is far from unique, instead being symptomatic of the problem of connecting the two area of climate change and corruption.

Corruption can hamper effective climate action at all levels, from climate policy development to the implementation of climate adaptation and mitigation projects. There are a number of possible links between climate change and corruption:

• Emissions standards can be reduced by weakening the quality of environmental regulations
• Funds may be channelled away from clean energy programmes and into less deserving or non-existent projects, meaning their effectiveness and positive impact on emissions is reduced
• Rates of deforestation can be increased by encouraging authorities to ignore illegal tree-cutting, causing less carbon to be captured
• Prolonging or promoting investments in non-renewable energy may increase emissions and result in failure to achieve reductions targets
• Enabling corporate interests to ‘capture’ individual politicians or the state generally through lobbying may shaping government policy away from climate action"
• The huge influx of funding and imperative to spend can create conditions ripe for corruption
• Climate finance is often channelled through complex or new institutions and mechanisms, to sectors that have high risks of corruption such as construction, forestry and energy
• Lobbying can lead to abuse of discretion in adaptation planning, so projects and programmes favouring vested interests are prioritised rather than areas of greatest vulnerability
• There are risks for bribery, clientelism and cronyism in design and procurement, leading to poor quality, incomplete and potentially maladaptive projects and programmes
• Petty corruption is a risk in the delivery of projects and programmes, increasing the cost and reducing the effectiveness of adaptation activities

Progress towards making the link

While there are still challenges in ensuring climate change practitioners and actors fully understand the relationship between climate change and corruption, some progress has been made in recent years. For example, in 2016 the Stockholm Environment Institute (SEI) brought together climate change experts to identify what should be ‘emerging research priorities’ in the field. According to the working paper by Klein et al, these experts agreed that the cross-cutting issue of “institutions and governance” had been underemphasised. “Governance” means broader level decision-making at higher levels over the shape of climate change interventions, rather than anticorruption technical solutions at the programme or project level. Although corruption was not an explicit focus of their report, information provided indicated the status of anticorruption work in each generation:

1. Pre-2000: focused on describing climate change risks to communities. There was no anticorruption work in climate change programmes, because there were no programmes.
2. 2001-2007: Climate change was reconceptualised as a “problem of development”, not something that would affect all parties equally. I.e., developing countries would suffer most. Climate change development programmes were needed, but there was no connection practically or conceptually to anticorruption work. The focus was on what to do; how to adapt.
3. 2008-2015: focused on optimising new mechanisms (e.g., Green Climate Fund, preparation of National Adaptation Plans, provision of technical data and information sharing) and frameworks for delivery in specialist areas (e.g., cities, agricultural, water, and public health, as well as the role of the private sector). Governance - rather than ‘anticorruption’ - was on the agenda.
4. From 2015: the focus is on how to optimise implementation of adaptation programs - here there are similarities with development programmes that emphasise the role anticorruption can play in optimising outcomes (e.g., by reducing loss and maximising benefits).There are also similarities in tensions within both the climate change and anticorruption sectors, such as between technical ‘fixes’ on the one hand and an emphasis on process on the other (e.g., participatory planning and decision-making, a push for transparency and accountability).

The climate change sector appears to have arrived at the point where research into how to optimise governance processes, such as policy development and decision-making, and to address corruption is becoming a priority. That being said, there remains a knowledge deficit on the part of climate change stakeholders about corruption and anticorruption. These knowledge gaps fall around the following areas:

1. How to facilitate and support inclusive decision-making to promote transparency and accountability;
2. How to facilitate and support independent voices in monitoring and reporting;
3. The types of anticorruption products for climate change interventions needed for different target audiences;
4. How to implement known anticorruption tools;
5. The optimal way to package and convey anticorruption messages in the climate change sector.

Knowledge gaps are also concentrated in mitigation (rather than adaptation interventions), which are more conventional in the way they are managed (via typical ODA-style programmes) - and therefore there is established corruption risk management knowledge that programme managers and anticorruption practitioners can draw on.