18 June 2024 – Picture this: a small idyllic village nestled between rolling hills and a sparkling river. Generations have thrived and subsisted here, with land and the river providing food and income to the community living in harmony with nature.
Now, as you walk through the village, you notice the signs of change. The river, once a lifeline, is shrinking, its waters receding further each year. Crops that once grew there now struggle against the dry, cracked soil. There is very little that can sustain the community. The elders speak of past seasons when the rains were predictable and plenty, but now, extreme weather patterns – prolonged droughts followed by intense floods – have become the new normal.
It is apparent; these are the signs – or rather symptoms – of the climate change. While significant funds and efforts have been invested in the climate change mitigation, adaptation and resilience, corruption can distort decision making and the implementation of key policies. Large financial flows, such as those in renewable energy projects, climate mitigation funds or responses to climate emergencies, among other factors, make this sector extremely lucrative for exploitation.
These scenarios reveal a harsh irony: while vast sums are pledged to fight climate change, corruption ensures that these funds do not reach those who need them most. Across the globe – in the global north and the global south – similar stories unfold. In countries where the capacity for oversight and accountability of institutions may be limited and/or supervision is weak, attention to corruption risks and their mitigation needs to be an integral part of the design of climate response policies.
To address this, the United Nations Office on Drugs and Crime (UNODC) and the World Bank have prepared a discussion draft of a report aimed to inform anticorruption and climate change policymakers and practitioners about existing corruption risks and further areas for research. The final publication will be presented at COP29 in November 2024.
As population and industrialization have grown, so has the demand for energy, making energy production the primary contributor to global emissions. Fossil fuels – coal, oil, and gas – account for over 75 per cent of global greenhouse gas emissions. Stopping the use of fossil fuels and transitioning to cleaner energy sources is crucial in the fight against climate change.
Significant climate finance is being directed towards green energy through investments, loans, and subsidies. However, corruption – such as regulatory distortion, bribery, fund misappropriation, and favouritism in awarding contracts – is undermining this transition. As climate finance expands, especially in developing countries, addressing corruption in clean energy projects is urgent.
Climate finance is designed to address the challenges of climate change. It includes local, national, and transnational financing from public, private, and alternative sources. Climate funds are specific financial instruments, such as grants or pools of money directed towards particular climate goals.
Both public and private sectors finance climate funds, with public sources currently being the main contributors in developing countries. To close the financing gap and boost climate actions in low-income countries, private financing must be increased. However, corruption risks undermine the confidence of actors in the private sector, hindering financial flows to countries with weaker institutions and governance.
Addressing corruption in climate finance will increase trust in the private sector to invest in climate action and ensure effective use of funds, boosting both public and private financing.
Carbon markets - a key part of climate finance – allow governments and non-state actors to trade greenhouse gas emission credits to help reduce global emissions. There are two types: compliance and voluntary markets.
Compliance carbon markets help countries meet their greenhouse gas reduction targets and are monitored by public regulatory authorities to ensure strict compliance and verification of such credits. Voluntary markets, meanwhile, enable private entities to buy and sell credits to offset their carbon footprint, with third-party certification ensuring the credibility of these transactions.
Both present a range of corruption risks. For example, government officials managing the registration and issuance of carbon credits could be bribed to issue false credits. Companies could misinterpret or exaggerate emissions reductions.
Despite the billions pledged for climate mitigation and adaptation, corruption remains a barrier.
Yet there are opportunities to strengthen existing anticorruption and accountability efforts and introduce new controls. Anticorruption considerations need to be integrated into climate response planning and legislation. Similarly, climate change adaptation and mitigation measures should be incorporated into national anticorruption strategies.
Further research, policy insights, and scientific evidence are still needed. Additionally, fostering collaboration among the private sector and civil society is crucial for designing and implementing these solutions.
The countless communities worldwide grappling with the devastating impacts of climate change are counting on it.
Learn more about UNODC’s work in addressing corruption in climate change mitigation and adaptation:
www.unodc.org/corruption/learn/thematic-areas/climate-change.html
Learn more about the World Bank’s work on addressing corruption for a liveable planet:
www.worldbank.org/en/programs/anticorruption-for-development
