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The latest Global Corruption Report from Transparency International (TI), launched May 5 in Dhaka, Bangladesh, tackles corruption and climate change. The message is stark: without better governance, transferring funds to developing countries to combat climate change could go awry. This would mean even less progress cutting the emissions of planet-heating gases, a squandering of scarce climate funds, and an intensified risk of dangerous, runaway climate change.

The TI report highlights the dangers as large amounts of money intended to address climate change start to flow through new channels, with sums that could match, and one day surpass, official development assistance.  Of particular concern is the trade in credits earned by reducing emissions. These now sell for $15 per ton of averted carbon emissions and the price is expected to rise as emissions limits become binding. But reductions are tough to measure, especially since the world lacks a robust system for monitoring, reporting and verifying emissions themselves. Cases of fraud in the carbon market, documented in the TI report and elsewhere, are already undermining trust in carbon markets.

Forests are a key concern. Preventing deforestation is often touted as an inexpensive way to avert emissions, after all, preserving forests only requires refraining from cutting them. Yet in some countries management of the forest sector is notoriously corrupt and many of the countries that would participate in Reducing Emissions from Deforestation and Forest Degradation (REDD) suffer from poor governance. The report (see Part Six) highlights the reduction of corruption as a key factor in the success of the UN-program for Reducing Emissions from Deforestation and Forest Degradation, a.k.a. UN REDD. Up to US$ 33 billion a year could flow to countries receiving REDD support once it is fully operational.  Addressing corruption and robust monitoring will be crucial to ensure that forests and local communities benefit from REDD.

Already early prototype REDD projects in Guyana and Indonesia have provoked controversy, facing challenges and delays relating to effective governance (see here and here).  Among the recommendations for improving REDD governance: “Experts monitoring and verifying projects must be independent and not paid from the budget of the project they are overseeing.” This would seem obvious, of course. Unfortunately, this simple idea is often neglected when it comes to practice.

Of course, what’s really needed is an “eye-in-the-sky” that can tell the world in near real time whether or not a specific area is being deforested.  Luckily, an amazing new CGD tool, called Forest Monitoring for Action (FORMA) fits the bill. Designed by my colleague David Wheeler and others, FORMA uses freely available satellite data to generate rapidly updated online maps of tropical forest clearing in Asia,  with other parts of the world available soon. The tool provides valuable information for local and national forest conservation programs, as well as international efforts, such as REDD, that aim to curb greenhouse gas emissions by paying to keep forests intact. I’m hoping that TI and others involved in combatting corruption in the use of climate funds will check it out!

Disclaimer

CGD blog posts reflect the views of the authors drawing on prior research and experience in their areas of expertise. CGD does not take institutional positions.