Is carbon finance fair and effective?
Filed under - Climate governance
What’s at stake?
Our planet is warming at a faster rate than it ever has, as a result of a high concentration of heat-trapping gases in the atmosphere. The burning of fossil fuels is the number one cause of global warming. The second is deforestation. Trees absorb carbon dioxide and retain it for as long as they live. Cutting down trees means that that carbon is released back into the atmosphere.
REDD+ (Reducing Emissions from Deforestation and Forest Degradation) is a UN-initiated scheme that aims to reduce the contribution that deforestation is making to climate change, essentially by paying tropical forest-rich countries not to cut down trees. There are two main ways in which this can happen. The first is fund-based: communities receive money as compensation for conserving forests, which they might otherwise depend on. The second is mechanism-based: the carbon that is stored in forests is represented by carbon credits which are sold on carbon markets. People or organisations that want to reduce their emissions impact can do so by purchasing REDD+ credits, and a certain percentage of the proceeds are given to forest-dwelling communities.
Sadly, many of the world’s most densely forested countries have a poor track record for corruption. In the current global economy, trees are worth a lot more cut down than they are in the ground, and politicians have been known to accept bribes – sometimes huge – to grant companies access to forest zones that should be protected. Meanwhile, some local communities have been forcefully removed from their homes in order to clear the way for forest exploitation, or have been coerced into selling their land for a fraction of its value.
REDD+ will inherit many of the corruption risks that have long beset the forestry sector, but it also brings with it new ones. Carbon is intangible, and so difficult to quantify. This opens the door to mistakes or manipulation – both of data and of people. Given the remoteness of REDD+ sites there may be no easy way of knowing whether a project on the voluntary carbon market is authentic or bogus. And forest communities may be marginalised from decision-making and profits.
What we’re doing about it
REDD+ is very new and policy is still taking shape. This means that a lot of decisions remain to be made about how funds will be distributed, who seeks to gain what and how projects will be monitored. Designed correctly, REDD+ could be great news for the planet and rural development. Preventative Anti-Corruption Measures in REDD+ is our project aimed at ensuring that it fulfils that potential.
Based on years of experience in the forestry sector, we have designed a step-by-step guide to identifying potential REDD+ corruption vulnerabilities in countries. Our chapters are using this to pinpoint risks and tailor anti-corruption safeguards to their national contexts. Their work involves:
- Conducting in-depth assessments of REDD+ risks and realities, both in policy-making and projects on the ground
- Documenting best and poor practice scenarios to feed into an evolving set of policy recommendations
- Working with partners in government and civil society to contribute to the development of locally appropriate and corruption-resilient REDD+ schemes
- Raising awareness in local communities about the advantages and risks presented by REDD+, and enhancing their ability to monitor financial flows, decision-making and project implementation
The project is currently being rolled out by:
- Transparency International Indonesia
- Transparency International Papua New Guinea
- Towards Transparency Vietnam
Our chapters are working with partners in government and the private sector to sensitise them to problem areas and build momentum for proactive reform. We are also talking to key players in the field of carbon finance: from the UN, to multilateral development banks, to carbon trading bodies. And to maximise our impact, we’ve teamed up with a number of civil society organisations working on similar issues.
The basic tenets of a REDD+ anti-corruption strategy are:
- Transparency: ensuring that people know what decisions have been made and why, and publishing detailed and easy-to-access information on policy, projects and money flows
- Accountability: guaranteeing clear roles and responsibilities so that people are answerable for their actions
- Integrity: enforcing codes of conduct to ensure that staff involved in REDD-related activities act ethically and within the law, and are penalised for wrongdoing
- Independence: making sure that people or institutions have nothing personal to gain from a particular project or policy. Third party oversight will help guard against this.
- Capacity: ensuring institutions are sufficiently resourced and have the necessary skills to carry out their work fairly and effectively
- February 2011: Our project kick-off meeting took place in Indonesia.
- May 2011: we hosted a meeting of experts in the field of corruption and REDD+ in Berlin during which the outline of the REDD integrity manual was drafted.
- October 2011: we hosted a joint training for civil society in Asia with UNREDD in Bangkok and in April 2012 we did the same for African civil society in Lusaka, Zambia. During these meetings civil society organisations learned how to use our REDD+ integrity manual.
- December 2011: We attended the 17th Conference of the Parties (COP17) in Durban, where we actively participated in Forest Day. Together with three other institutions, we took the lead in the issues market place group looking at how REDD+ is unfolding on the ground and led a discussion on the risks posed by corruption for REDD+.
- Upcoming: With the Rio+20 UN Conference on Sustainable Development fast approaching, we are advocating at both national and international levels to ensure that challenges to climate finance – as a major driver of sustainable development – are adequately addressed.
Our Chair, Huguette Labelle, contacted the Rio+20 Bureau and Secretariat and Members of the UN High Level Panel on Global Sustainability upon our request. She sent this letter accompanied by Transparency International’s suggested amendments to the Rio +20 outcome document, and our Working Paper, ‘Putting climate finance on the Rio+20 agenda.’ Our chapters have been actively pressuring their national delegations on these issues, and mobilising civil society support regionally.
Claire Martin, Programme Manager (Acting)
Leah Good, Programme Officer
Brice Böhmer, Programme Coordinator