Strengthening Accountability in Climate Finance: An Agenda for Change
Master thesis by PluriCourts research assistant Chrysa Alexandraki available on SSRN
This thesis aims to determine the following research question: How can the Funds under the UNFCCC and the development institutions responsible with the administration and disbursement of their resources be held accountable for not complying with their reporting obligations and what are the safeguards and mechanisms in place to ensure accountability?
In particular, it analyzes the adequacy and effectiveness of the current accountability means under the GEF Trust Fund, the Special Climate Change Fund (SCCF), the Least Developed Countries Fund (LDCF), and the Adaptation Fund (AF). This thesis concludes the lack of effectiveness of the existing accountability system, detects its deficiencies and provides potential recommendations towards the enhancement of accountability and compliance under the Funds and their partner institutions.
Even though most reports and reviews deal with the necessity and effectiveness of tracking climate finance, this thesis refers to the need for tracking only as a means to allow holding accountable the financial institutions involved in climate finance. Scholars and research institutions have stressed the need to strengthen and revise the current reporting system. However, apart from deficiencies in reporting, there are even greater deficiencies in compliance and enforcement that need to be covered, if States want to prevent more dangerous levels of greenhouse gas emissions.
In that respect, this thesis concludes that even though accountability standards and mechanisms are in place and efforts have been made to reinforce transparency in the flow of capitals, there is, nevertheless, an urgent need for strengthening the already existing accountability framework.
More specifically, the scope of the current resolution mechanisms is very narrow, and as a result, these mechanisms can only be activated in cases of non-compliance of the implementing agencies (IAs) with their environmental and social policies. Consequently, this implies that these mechanisms are not efficient enough and adequate to cover situations of non-compliance of the Funds and their partner entities with the rest of their obligations, such as the reporting ones which are of great significance. Additionally, this thesis recommends two proposals for changes and scaling up of the climate finance accountability framework.