Topic Guide: Corruption and Climate Finance

Tracking and ensuring the validity of the results of climate finance investments is particularly challenging. The highly technical nature of climate adaptation and mitigation action makes it easier for a small number of experts and vested interests to control and potentially distort information. This factor has proven especially problematic in monitoring carbon emissions reductions and, by extension, carbon trading schemes, many of which have been hampered by allegations of fraud.[1]

Specific governance challenges are associated with the monitoring reporting and verification (MRV) of REDD+ schemes.[2] The forest carbon stocks which would need to be regularly calculated under countrywide REDD+ commitments are often measured by one central facility relying on large amounts of remotely sensed data, raising corruption risks among the various government bodies, consultancies and research organisations with the technical capacity for undertaking the measurement of forest carbon stocks. Conflicts of interests could arise where those who are set to benefit from REDD+ payments could play a role or exert influence over the MRV process. Verifiers could intentionally distort their analysis to achieve a more favourable measurement, for example by measuring only certain variables, leaving out relevant leakage effects (where a REDD+ conservation project puts pressure on forest resources elsewhere, resulting in emissions from logging simply being displaced) or by carefully selecting the sites for collecting data to result in a more favourable, and profitable, measurement.