Corruption and Climate Change: The Double-edged Sword



Corruption thwarts climate action on an extraordinary scale.

Building climate resilient communities is contingent on financing -- finances transferred from richer, higher carbon emitting nations to poorer, lower carbon emitting nations. A large portion of the US$700 billion that the international community will spend on climate finance by 2020 won’t actually meet beneficiaries, as the most vulnerable developing nations are often the most corrupt. The goodwill and magnitude of climate change finance offers ample opportunities for corruption -- opportunities to keep poor people poor.

Transparency International’s 2015 Corruptions Perceptions Index claimed that more than 6 billion people live in countries with a serious corruption problem. The most at-risk countries to climate change, as listed in Germanwatch’s 2017 Global Climate Risk Index, strongly correlated to the most corrupt. Afghanistan, ranked the 12th most vulnerable nation to long-term climate risks, is also the world’s most corrupt nation. Haiti, ranked the 3rd most vulnerable nation to long-term climate risks, is the 9th most corrupt.

Climate funds are plentiful, making it more difficult to track what money is actually being spent for the purposes intended. Climate financing is currently comprised of 27 implementing agencies and institutions (including the Africa Development Bank, Asia Development Bank and World Bank), 21 multilateral funds and initiatives, 8 national climate funds and 5 bilateral funds and initiatives.

However, global cooperation for climate change action under the Paris Agreement is not all encompassing or strictly binding.

The World Bank holds an incredibly long list of debarred entities and individuals who have been sanctioned under the Bank’s fraud and corruption policy. To demonstrate a few instances, in October 2017, two companies and an individual were debarred for misconduct on two Filipino projects — the Third Manila Sewerage Project and the Integrated Persistent Organic Pesticides Management Project. In February this year, three companies were debarred for collusion on bids for the Electricity Distribution and Transmission Improvement Project in Pakistan.

Climate change and corruption are similarly cruel. They target the poorest first and worst.

Bangladesh was hit by a huge loss in governance integrity in 2016 climate finance disputes. The nation received demands to return US$18 billion of UK aid. In 2011, Bangladesh claimed that post-cyclone relief efforts included US$3.1 million to build ‘climate-resilient housing’ in the coastal southwest region. As discovered by Transparency International Bangladesh, these homes were built without walls in order to halve the original cost. Shockingly, these structures were built exactly to the specifications approved by Bangladesh’s Ministry of Disaster Management and Relief.

Corruption thrives on the flaws of national governments, threatening entire economies. Fraudulent use of loopholes, prejudiced project bids and finance mismanagement is common practice.

There is a dark side to foreign aid.

Foreign aid may not only permit corruption, but also fuel it. In nations where money is scarce, foreign aid is an opportunistic medium through which corruption can take place. UN involvement and foreign aid by countries like the US are perceived as global indicators of good virtue. However, UN involvement is often just a façade for global cooperation and foreign aid money often fails to deliver the intended social and economic development aims. In some developing nations where billion-dollar investments are built next to slums, the lacking morality of governments is apparent.

Cambodia’s Prime Minister Hun Sen has been in power of the ‘democratic’ state for 33 years. Hun Sen was a former Khmer Rouge soldier, partaking in the killing of nearly 2 million Cambodians. The July 2018 state elections could see the end of his reign. Coincidently, the opposition leader has been in jail since September 2017 and his administration, the Cambodia National Rescue Party (CNRP), was officially dissolved in November 2017 by the Supreme Court. The global response? The US withdrew any funding for the 2018 election in November in non-support of the fraudulent election. Hun Sen then challenged the US, the world’s largest foreign aid benefactor, to cut all aid to his country.

Is ‘calling out’ corruption sufficient? Rather, could cutting foreign aid be effective in supporting a democratic state, and combatting climate change?

Transparent transactions and judicious use of foreign aid funds can be promoted through a number of measures:

  • Proactively closing entry points for corruption in the climate management process;

  • Developing policies openly;

  • Holding leaders accountable;

  • Mandating independent body monitoring and availability of public information;

  • Promoting global cooperation through investing in multilateral relations;

  • Partnering with local governments directly to ensure accountability and risk is shared;

  • Demanding public participation in decision making processes;

  • Speaking out about political repression and the value of integrity - global pressure leads to global action.

The world’s efforts to mitigate further climate change is road-blocked by non-righteous deployment of climate finance. Billions of dollars will continue to be wasted if the dissemination of foreign aid is not dramatically improved now.

Alexandra Devlin is the Climate Change and Energy Security Fellow for Young Australians in International Affairs.

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