“Corruption Risks Exposed in Zambia’s Climate Finance Mechanisms”
… Transparency International Zambia’s latest report highlights significant gaps in governance, calling for enhanced oversight to ensure that climate funds reach vulnerable communities and promote equitable climate action.
By Francis Maingaila ♥️
Lusaka, Zambia24 – (1-10-2024) – Transparency International Zambia (TIZ) has released a report analyzing corruption risks within Zambia’s climate and carbon finance mechanisms, revealing significant gaps in governance.
The report calls for enhanced oversight to ensure that climate funds benefit vulnerable communities and promote equitable climate action.
The report presents findings from nearly a decade of analysis, highlighting critical issues in transparency, accountability, and governance.
TIZ Executive Director Maurice Nyambe described the report as “a significant milestone in combatting corruption in environmental governance.”
Titled Gap Analysis and Corruption Risk Vulnerability Assessment of Climate and Carbon Finance Mechanisms in Zambia, the report urges stakeholders to strengthen transparency in climate-related policies and actions.
Nyambe acknowledged the government’s progress in addressing climate change, particularly with the upcoming enactment of the Climate Change Act.
However, he stressed that the report identifies key risks, such as a lack of transparency, policy capture, corrupt practices, and inequitable benefit-sharing, particularly excluding marginalized groups like women from climate-related projects.
“We need urgent action to address these issues and ensure equitable climate financing, especially for rural communities,” Nyambe urged.
The report is part of TIZ’s broader Climate Change Integrity Project (CGI), which seeks to enhance transparency and accountability in climate finance and policy.
During the report’s presentation, Tamika Halwindi, Environmental and Sustainability Coordinator at TIZ, discussed the legal and regulatory frameworks surrounding climate and carbon finance.
She emphasized the increasing threat climate change poses to livelihoods and well-being, noting the expected rise in global climate finance flows.
“Carbon markets are projected to quadruple, growing from $500 million in 2020 to $2 billion in 2021,” Halwindi explained.
“By 2030, local investment needs are anticipated to rise from $8.1 trillion to $9 trillion, while climate finance requirements may exceed $10 trillion between 2031 and 2050.”
Halwindi further warned that the urgency to address climate change, paired with the influx of substantial funding, exacerbates corruption risks, especially in countries vulnerable to both climate change and corruption.
She explained that TIZ’s research, conducted between August 2023 and March 2024, used qualitative methods, including literature reviews and key informant interviews. Validation meetings were held to ensure the accuracy of the findings.
A notable development in Zambia’s climate governance is the introduction of a Carbon Market Framework, aligned with the Paris Agreement, to evaluate climate change mitigation activities.
While the Ministry of Green Economy, established in 2021, has improved climate fund tracking, its budget allocations have hovered around 0.46% to 0.47% of the total government budget from 2022 to 2024.
Halwindi noted a slight increase in domestic funding for the Ministry since 2022, but pointed out that most climate financing before the COVID-19 pandemic came from international partners.
“Many global climate finance agendas overlook the input of local communities, who are the ones directly affected by climate change,” she added.
Halwindi also raised concerns about profit-driven motives in climate finance, highlighting that many major greenhouse gas emitters influence global agendas without reducing their emissions.
“These projects are often labeled as ‘green’ or ‘climate-friendly,’ but they fail to meet environmental standards,” she said.
Moreover, Halwindi highlighted the technical complexity of climate finance and carbon markets, which many stakeholders, including local communities, find difficult to navigate.
This complexity limits their participation in decision-making processes.
“There is an inadequate consultation mechanism for local communities, especially host communities, regarding climate finance and carbon projects,” she emphasized.
TIZ’s research identified several vulnerabilities, including inadequate monitoring and evaluation, weak accountability mechanisms, and potential for corruption due to systemic weaknesses.
Gender and social barriers further limit the participation of marginalized groups, such as women and people with disabilities, in climate finance decision-making processes.
Halwindi also pointed out the risk of policy capture, where individuals or entities exploit policies intended to support climate initiatives for their own benefit.
She cautioned about the rise of “carbon cowboys,” profit-driven actors exploiting Zambia’s lack of compulsory carbon markets. “Many agreements are signed without proper community consultation, resulting in a lack of transparency and disclosure,” she noted.
Concerns also remain regarding the accurate reporting of carbon credits and revenue. “Local communities are often unaware of the total value generated from these credits,” Halwindi explained.
She stressed the importance of developing a climate change law to refine carbon trading regulations and establish a more effective climate finance framework. “A repository for climate finance information and budgets is crucial for transparency and public access,” she added.
Dr. Doubty Chibamba, Permanent Secretary at the Ministry of Green Economy, reaffirmed the government’s commitment to transparency in carbon trading.
He announced that the Climate Change Law would soon be presented to Parliament, stating, “The true beneficiaries of carbon financing should be local communities.”
He also revealed that a pilot carbon trading project in Eastern Province has a benefit-sharing plan, allocating 55% of the revenue from carbon credits to local communities, 30% to investors, and 15% to the government and project teams.
Chibamba acknowledged past transparency issues but emphasized that the government is developing a new Monitoring, Reporting, and Verification (MRV) system to address these challenges.
“All signed deals will be uploaded to a public registry for scrutiny,” he said.
He underscored the importance of the TIZ report in raising awareness about climate finance within communities, noting that Zambia currently lacks comprehensive climate change legislation.
Chibamba urged academic institutions and professionals to support the government’s climate agenda through research and expertise in climate finance, mitigation, and adaptation efforts.
“If the pilot project is successful, it will expand to other regions, providing a transparent model for carbon trading,” he concluded.