Climate Change, Water and Corruption

This post has been written by Birke Otto of the Water Integrity Network, a global coalition stimulating anti-corruption activities in the water sector locally, nationally and globally.

As the climate talks at the COP15 open with urgent calls for action, massive funds will be mobilized to manage climate change adaptation and mitigation. If not managed and governed adequately, large sums will be lost in corruption and mismanagement.

New investments will flow into the water sector to adapt to climate change

The water sector is heavily affected by the consequences and impacts of climate change. Increasing floods and droughts force people to move their homes and threaten their means for subsistence. It is predicted that 2/3 of the world’s population will live in areas with water stress in 2025, out of whom 15% will live in areas with real water scarcity. As so often, it is the poor who are most severely affected by the negative impacts of climate change.

To secure future water resources and adequately manage the effects of climate change in the water sector, a strong and enforceable agreement on future global commitments on climate change measures is necessary. This will involve the mobilization and pooling of enormous funds to prevent and adapt to the effects of a changing climate. Large amounts of money will be invested into new water infrastructure, governance mechanism and technology for climate change adaptation and mitigation.

However, there are only few studies on the actual costs of adaption and mitigation in the water sector, but existing numbers suggest the following:

• According to the World Bank, the estimated annual incremental climate costs (required for a 2°C trajectory) range from US$9 billion to US$100 billion by 2030. Mitigation proves even more costly with estimates up to US$565 billion.
• An UNFCCC estimate states that additional investment and financial flows required for adaption to potential changes in the availability of water supplies would be approximately $9-11 billion per year in 2030.
• These figures represent the additional costs to maintain the current standard; they do not include the costs of providing this level of services where it currently does not exist. In relation, the same amount of money is required to meet the MDG targets for sustainable access to safe drinking water and basic sanitation.

Preventing the misuse of funds from the start

If not managed and governed adequately, large sums of these unprecedented flows of financial assistance can be lost in corruption and mismanagement. Instead of improving the negative impacts of climate change, this will worsen social inequality as well as ecological degradation.

• A great extent of these investments will flow into large infrastructure projects such as flood proofing. The construction sector is one of the most corrupt sectors worldwide because of the size, complexity and large sums of money involved in such projects.
• Current CO2 trade mechanisms are not transparent and have a convoluted design. This can corrupt the decision making process for technology and investment choices for adaptation and mitigation.
• As climate change will worsen existing water sector stresses, it will render the current impacts of corruption even more severe, meaning increased inequality in water and sanitation service distribution, lowered agricultural yields, increased prevalence of ruptured dams, and increased frequency of power outages.

To avoid these and other effects of corruption, it is essential to strengthen transparency and integrity in the management of funds and projects for climate change adaptation and mitigation from the beginning. The funds need to be carefully designed, planned and harmonized with the inclusion of those who will be affected the most. Effective and enforceable transnational governance structures that can oversee and monitor the distribution and use of funds are crucial to ensure trust between contributors and recipients.

Therefore, ensuring that finance for coping with climate that reaches their intended beneficiaries and provides effective and long lasting solutions requires the cooperation and coalitions between multiple stakeholders in the water sector. These include the public sector, private sector and civil society. The Water Integrity Network supports and stimulates existing organisations to include integrity on their agendas and mainstream anti-corruption in climate change adaptation and mitigation processes.