core sector communique

Accountability measures needed to safeguard climate financing

Berlin, 15 June 2010

As the first tranches of US$30 billion in fast-start climate change financing begins to trickle to recipient countries, Transparency International (TI) is calling on governments to work towards strong governance measures that can safeguard current and future climate change financing.

Transparency and accountability mechanisms in climate change financing can help make international commitments successful in mitigating climate change, reducing emissions, and protecting vulnerable communities. The first tranches of the US$30 billion fast-start climate change financing, agreed in Copenhagen last December, are being disbursed this year and a total of US$100 billion is projected through 2020. Meetings held last week in Bonn devoted some attention to mechanisms for monitoring the money but there is still no clear and coordinated system in place to ensure accountability.

“We need strong governance and effective measurement, reporting and verification mechanisms. This is a complex issue with no easy fix, but we could jeopardise our planet and our future if we allow weak governance to undermine efforts to combat climate change,” said Cobus de Swardt, Managing Director of TI.

To move forward on finding ways to strengthen climate governance, today TI and InWEnt, a capacity building organisation working on behalf of the German Federal Ministry for Economic Cooperation and Development, are co-hosting a one-day conference in Berlin. The conference involves participants from around the world and aims to gather perspectives from government, the private sector and civil society.

“Sufficient knowledge and information on climate change are indispensable not only for politicians and administrators but also for the general public in order to ensure adequate public participation,” said Dr. Sebastian Paust, Chief Executive Director at InWEnt. “Decision making processes are not detached from the public and should be understood by the people affected. In putting together this conference, we hope to contribute to this process of accountability.” InWEnt can build on decades of experience and a number of proven instruments for capacity building, supporting decision makers to perform effectively and institutions to enhance their capacities.

Climate financing and climate governance broadly fall into two categories: mitigation and adaptation. Mitigation projects aim to reduce green house gas emissions globally, and include forest development and carbon trading schemes that provide incentives primarily to the private sector for emission reduction. The World Bank estimates that the carbon trading market is already worth US$144 billion. Adaptation projects include climate-proofing of public infrastructure, such as constructing barriers to prevent against flooding and sea level rises.

Climate change mitigation and adaptation have been part of InWEnt's programmes for many years. Support for the introduction of renewable energies, integrated environmental planning, finance mechanisms for adaptation, cross border water and disaster risk management and sustainable forestry are just a few examples of the wide range of InWEnt's capacity building measures in this field.

“An effective global response to the climate challenge will fail or succeed to the extent that risks affecting governance and integrity are controlled. Civil society should form a key part of these efforts”, said de Swardt.

TI’s experience in areas that are touched by climate change (including public contracting, political corruption, private sector integrity, humanitarian relief, aid and service delivery), serve as a basis for the organisation’s assessment of climate finance governance.

A key issue in climate finance remains to what degree transparency, accountability, public participation and oversight can be achieved. The Group of 20 has already made this a priority in its recent declarations. The fast-start financing will be overseen by the financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC), which includes four different funds. It may also be delivered through bilateral, regional and multilateral channels.

Copenhagen came up short on governance. The recent conference in Bonn has progressed by focusing on how to ensure transparency in providing new and additional funding. The next step will be whether a global accord with accountability as part of its core, can be achieved at the climate change summit to be held in Cancun, Mexico in November where mechanisms for longer-term finance are to be clarified, according to the United Nations.

Over the next months and years TI will scale up its diagnostic and advocacy work on corruption risks in climate governance, in order to ensure that good practice and experience from other sectors can fully inform the development of adaptation and mitigation strategies from the international to the local level.