WRI Stories Feed: Electricity Governance Initiative

More Transparency Needed to End Kyrgyzstan Energy Crisis

Sarah Martin — Wed, 24 Apr 2013 11:01:16 -0400

Worldwide, one out of every five people lacks access to modern electricity. Affordability, quality of service, and social and environmental impacts…

Using Partnerships and Governance to Solve the Energy "Trilemma"

Davida Wood — Mon, 15 Oct 2012 13:56:23 -0400

This post was co-written with Sarah Martin, an intern with WRI’s Electricity Governance Initiative.

The theme of today’s Blog Action Day is the “Power of We,” a…

India’s Blackouts Highlight Need for Electricity Governance Reform

Bharath Jairaj — Mon, 13 Aug 2012 13:15:39 -0400

India recently experienced one of the world’s worst blackouts, with…

Rio+20 in the Rear View: Why We Need to Connect the Grassroots to the Grasstops

Davida Wood — Tue, 17 Jul 2012 11:48:43 -0400

Sarah Martin and Gayatri Gadag also contributed to this blog post.

Rio+20 may have ended more than three weeks ago, but the environmental and development communities are…

Kyrgyzstan Makes Progress on Electricity Sector Reform

Davida Wood — Wed, 21 Dec 2011 06:09:30 -0500

This post was written with Sarah Lupberger, Project Coordinator with WRI’s Electricity Governance Initiative.

A year and a half has…

Between Populism and Price Increases: Who Will Pay for the Cost of Renewable Energy?

Davida Wood — Tue, 21 Jun 2011 16:38:46 -0400

As feed-in tariffs gain traction as a policy mechanism of choice, we must keep in mind the bigger picture of the financial health of developing country electricity sectors.

It was not too long ago that the World Bank and other international financial institutions were drawing attention to the soaring debt levels of developing country utilities. In order for feed-in tariffs or other electricity policies to be effective, a comprehensive approach must address the financial and governance challenges that continue to trouble utilities. Most importantly, there must be transparent tariff setting processes that provide space for public scrutiny and input.

What are feed-in tariffs?

A feed-in tariff is a guarantee that renewable energy producers will be able to sell the electricity they generate at a price set in advance by the government. As of December 2010, 78 countries, states, and provinces have passed feed-in-tariffs for renewable energy, including a rising number of developing countries. Read more >>>

Tariff setting is a central issue that links both the financial and governance aspects of utility performance. In the past 10-15 years, reform efforts have pressed for tariffs to be raised in order to cover the full costs of providing electricity. The transition to cost-recovery principles has been a rocky policy path, which has alternated between social unrest directed at rate increases, and populist solutions which reinstated subsidies and incurred further debt. Missing in all of this has been a formal process in which consumers can engage in rate setting and decision-making about how to structure subsidies and price impacts.

A Lack of Public Input

In developing countries there are few institutions structured to allow for stakeholder engagement in a way that can accommodate a range of analyses and approaches. Unlike in the United States, where independent regulatory institutions came into being as a result of consumer protest against market manipulation by monopolies, developing country regulators were established to create an enabling environment for private investors. As a result, institutional processes for disclosing information and incorporating public input tend to be underdeveloped.

If independent agencies exist at all, they often lack sufficient mandate, authority and capacity to implement these tasks. When a lack of open, transparent processes combine with an absence of visible regulatory actions to curb inefficiencies, consumer confidence is lost. The lack of formal channels for integrating consumer perspectives has had adverse effects. With the lack of institutional space in which to explore a range of solutions, consumers have typically taken to the streets or threatened political stability in response to tariff increases that have been viewed as inequitable.

Consumers and Price Increases

In Indonesia, for example, the government was unable to sustain significant tariff increases even in spite of World Bank and Asian Development Bank loan conditionalities. Yet a closer look at the positions of consumer and public interest organizations show that they do not necessarily reject price increases per se.

A forthcoming Asian Development Bank (ADB) study notes that leading public interest organizations support Indonesia’s April 2010 decision to remove the electricity subsidy for consumers who use more than 6600W per month. This position is not new. What consumer groups have been protesting since the beginning of the sector reform program is the lack of transparency around tariff setting and subsidy processes. They argue that the lack of an independent regulatory process has meant that short term political interests have dominated subsidy determinations, resulting in poorly targeted subsidies and other inefficiencies. In all that time, prices have barely risen. One cannot help but wonder whether earlier openness to alternative perspectives – and formal process for considering them – may have hastened the path to financial recovery. Even now, public interest groups in Indonesia are calling attention to the lack of a clear tariff methodology and involvement of a body that could represent the public.

A Role for Civil Society

Civil society perspectives are particularly valuable in the context of the impending impacts of renewable energy. In the Indian state of Tamil Nadu, for example, the utility’s massive debt must be attributed to multiple types of subsidy payments that the state government has not transferred. As in Indonesia, tariffs have not been raised even as the costs of providing electricity have risen. As a state with one of the highest deployments of renewable energy in India, exceeding the national target of 10%, part of the deficit is linked to renewable energy subsidies. When tariffs are inevitably revised, the voices of consumers will be ever more important in the dialogue about how the costs are covered.

In Thailand, consumer groups advocate that renewable energy policy should be bundled with energy efficiency and demand-side management, rather than deployed in isolation. Attention to energy efficiency would not only bring the costs renewable energy down, but would curb the tendency of Thai utilities to overinvest, an inefficiency which has had an even bigger impact on tariffs.

In Indonesia, civil society organizations argue that subsidies for renewable energy, as for any other policy, should not come as a “blank check”, but should be linked to public interest objectives and regulatory oversight. Already, several corruption investigations are underway in connection with alleged price mark ups and manipulated tender processes. At one solar PV project, the cost of installation was increased by nearly 20% as a result.

In the Philippines, analysts note that there is a serious tendency to keep marginalized sectors, especially those who are non-industry players, out of energy decisionmaking processes. For example, the voices of indigenous peoples and local communities are ignored in the development of power and fuel projects. This lack of transparency and public participation in energy planning and development has led to compromised environmental principles and standards as well as social conflict resulting in escalating costs for the country. This should be avoided as the Philippines implements its recently enacted Renewable Energy Act; otherwise support for renewable energy would diminish.

Consumers have an important role to play in the rate setting process, providing analytic expertise, helping to reduce information asymmetry, and demanding better corporate governance and performance standards from utilities. They can also provide important input into the setting of investment priorities and the distributional impacts of tariff design.

Building Capacity and Participation

Yet the potential of civil society to participate in decision-making processes about the price and impact of renewable energy is far from realized. Prayas’ recent study “Clean Energy Regulation and Civil Society in India” documents the poor public response to the renewable energy tariff orders issued by Indian state regulatory commissions. The study, which reviewed regulatory proceedings and conducted stakeholder interviews in five Indian states, concluded that the lack of reliable data about renewable energy, including resource availability, costs, and performance means that only a handful of technically sophisticated CSOs are able to properly analyze regulatory decisions and the data that underpin them, and this work depends on the availability of adequate resources.

It also corroborates a global survey by the U.S. National Association of Regulatory Utility Commissioners (NARUC) which concluded that regulatory bodies tend to focus on investor issues and do not recognize the role of civil society participation, creating the perception of regulatory capture. For most CSO’s, the focus on investor issues has meant that the regulatory process is of little value to them.

Breaking the Cycle of Non-Engagement

Thus begins a cycle of non-engagement, for when CSOs stay away from regulatory proceedings, the perception that the process has been captured by project developers is reinforced, and has the potential to build popular suspicion of renewable energy generation rather than a constituency that demands more ambition.

To break this cycle, countries must build stronger regulatory institutions and transparent and accountable decision-making processes. There must also be investments in capacity building for the effective participation of civil society organizations. The political and economic sustainability of feed-in tariffs cannot be separated from the larger governance context of tariff-making processes and utility struggles with financial liquidity.

The authors are partners in the Electricity Governance Initiative, a global network of civil society organizations dedicated to promoting transparent, inclusive, and accountable decision making in the electricity sector. WRI and Prayas serve as the Secretariat for the initiative.

IPCC Study: Renewable Energy Could Provide Majority of World’s Energy by 2050

Lutz Weischer — Mon, 23 May 2011 09:09:17 -0400

Recently, the Intergovernmental Panel on Climate Change (IPCC) released a comprehensive study on renewable energy, entitled Special Report on Renewable Energy Sources and Climate Change Mitigation. The report finds that by 2050, nearly 80 percent of the world’s energy supply could be provided by renewable energy sources. WRI Analyst Lutz Weischer, who works on renewable energy policies, sat down to talk about the report’s implications.

Why is this report significant?

IPCC reports have a credibility and legitimacy that few other sources can match. Because this report draws upon the analysis of preeminent scientists, economists and engineers engaged in climate and energy research, the conclusions have considerable weight. This particular report looks at 164 peer-reviewed energy scenarios to find common themes about what the world’s energy supply will look like in 2050. They also assessed the literature on the technical potential of renewable energy sources, the benefits they can bring beyond reducing greenhouse gas emissions and the barriers that stand in the way of broader deployment. The report will be the go-to place for anyone who wants to get a credible and comprehensive view on the global potential of renewable energy.

What are the report’s primary findings?

The report predicts renewable energy, excluding traditional biomass¹, to grow three to ten times by 2050. Not all of the 164 scenarios analyzed in the report predict significant greenhouse gas emissions reductions; but those that do show a massive expansion of renewables. In other words, you can’t solve the climate crisis without renewable energy. Depending on how ambitious countries are, nearly 80 percent of the world’s energy supply could be provided by renewables in 2050. The best news is the report finds that we would have enough wind, water, sun and biomass resources available to meet all of the world’s energy needs with today’s technologies. However, it highlights several political and financial challenges to reaching those numbers.

Many fear that cost is the biggest barrier to large scale deployment of renewable energy. What’s your take on that?

People shouldn’t have to chose between affordable and clean energy - but in most cases fossil fuels are still cheaper than renewables. One reason is that most countries heavily subsidize fossil fuels. The IPCC report suggests that if fossil fuels were not subsidized and reflected their true costs – taking into account externalities like their impact on health and the environment – renewables would be much more cost-competitive.

The world needs cleaner energy, but we also need to find ways to increase energy access for the hundreds of millions of people who currently go without. At WRI, we try to reconcile these two goals. We’re studying ways to drive down the cost renewable energy and also improve its performance, so that it can become available to more people.

One strategy is for countries to phase out fossil fuel subsidies while adding incentives and subsidies for renewable energy that are designed to encourage innovation. In the long run, this would allow renewable energy to be competitive with traditional sources of power, and countries could phase out those incentives as well.

It’s important to note that in some regions of the world, such as rural regions in Africa, renewable energy is already a cost-competitive source of power.

What other policies are needed to tap into our renewable energy potential?

WRI’s research shows that it’s not enough to just create financial support for renewable energy. Smart renewable energy policy should also include targets (such as a renewable energy standard that sets a renewable generation requirement), improvements to a country’s regulatory structure (to ensure that rules are in place to integrate renewables into a country’s energy system), and incentives to encourage community participation in energy decisions. To accelerate the transition to clean energy, you also need companies that are willing to invest in renewable energy projects, and banks willing to back those projects. In developing countries, that support may need to come from bi- and multilateral development banks.

What does the IPCC report say about how renewable energy can meet development goals?

The report suggests that renewable energy may be a good way to increase energy access. In many areas of the world that lack advanced grid systems, electricity is best produced locally. Rather than importing and transporting diesel fuel to a rural area, for instance, a village could create a micro-grid based on the solar resources they have and save money in the process. In many remote areas, decentralized projects can be cheaper and cleaner than grid expansion, as well as providing energy security.

Much of the growth in renewable energy is predicted to come from developing countries. Why?

The report highlights that 53 percent of current renewable electricity generation capacity is in developing countries, and that the majority of future renewable growth will also be in developing countries.

Developing countries are interested in renewable energy for several reasons: energy access, energy security, economic development opportunities, and even the health benefits that renewable energy have over fossil fuels. These countries are acting in their national interests.

How does the IPCC report relate to WRI’s work?

WRI examines how to realize the full potential of renewable energies that is presented in the IPCC report. For example tomorrowk we will release a paper titled Grounding Green Power, that draws lessons learned from developing countries on smart renewable energy policy and provides guidance to donors who are looking for the most efficient ways to support the clean energy transition. In a recent report, High Wire Act, we looked at one of the key barriers identified in the IPCC report, integrating renewables into the power grid, with detailed case studies of the United States, China and the EU. We also conduct research on issues related to governance and finance and how they influence renewable energy deployment. At the upcoming Asia Clean Energy Forum in Manila, we will present the full spectrum of our renewable energy analysis.

The report looks at six renewable energy sources: Direct solar, geothermal energy, hydropower, ocean energy, wind energy and bioenergy. ”Traditional biomass” is a form of bioenergy and mainly refers to burning wood for cooking and heating purposes in many parts of the developing world. In most scenarios, a decrease in the use of traditional biomass is predicted, as people switch to more modern energy sources. To get an accurate idea of the growth in all other renewable energy sources, traditional biomass was excluded when calculating these growth rates. ↩

Clean Energy, Corruption, and Case Studies on Electricity Governance

Davida Wood — Thu, 23 Dec 2010 11:35:49 -0500

Developing countries are expecting billions of dollars to fund a clean energy transformation. How can they ensure this money is spent in the public interest?

At a moment in which countries seek billions of dollars of financing to transition to low-carbon economies, there has been little focus on how decisions about these expenditures are actually made.

But with new technologies and new sources of financing emerging as potential drivers of an energy transformation, it is critical to understand the institutional structures and governance practices that shape sector choices.

The Electricity Governance Initiative explored these issues on a panel at 14th International Anti-Corruption Conference in November 2010. Titled “Clean Energy: Conflicts of Interest and Corruption in the Electricity Sector,” the panel presented case-studies of the institutional backdrop for electricity sector planning and procurement. The panel examined how public funds for both conventional and renewable energy may serve vested interests. It also explored ways in which electricity sector institutions in developing countries may be improved to protect public interests in this capital-intensive sector.

Governance challenges persist even as the fuel is changed from conventional to renewable resources.

Case studies from Thailand, South Africa, Indonesia and India demonstrate large governance gaps, and multiple avenues for corruption:

Thailand’s power development planning process is premised on perpetuating gains for vested interests and designed to continue providing perverse incentives to extractive and nuclear industries, though various alternatives exist.
South African anti-corruption agencies are unable to take action even where conflicts of interests are visible in decision-making and seek higher levels of “evidence” of corruption or undue influence.
Indonesia’s government continue to sign private contracts with independent power plants (IPPs) outside of the public domain, committing to buy electricity at higher costs with virtually no public or regulatory oversight.
Clean energy development and deployment in India has shown how information asymmetry, limited regulatory and public oversight and the calculation and rolling out of incentives and subsidies can cloud decision-making in the sector.

The presentations demonstrated how institutional biases and lack of transparency can combine to slow transformation and distort pricing. Even in the “clean energy” sector, lack of transparency underscores the fact that governance challenges persist even as the fuel is changed from conventional to renewable resources.

A common theme in the session was the challenge of identifying and combating corruption, given the technical nature and complexities in the electricity sector, and a call for greater civil society coordination to combat corruption in the sector. Panelists focused on looking at corruption within a larger “good governance” paradigm: the creation of processes aimed at improving transparency to reduce corruption and lead to decisions in the electricity sector that better serve the public interest. The four presenters are partners of the Electricity Governance Initiative (EGI), a global network of civil society organizations dedicated to promoting transparent, accountable, and inclusive decision-making in the Electricity Sector. The World Resources Institute and Prayas Energy Group serve as the Secretariat.

Read these case studies here:

Governance and Power Development Planning in Thailand
Corruption and Procurement in South Africa: A Case-Study from Eskom
Independent Power Plants and Corruption in Indonesia
Clean Energy and Regulation: India’s Challenges of Information Asymmetry and Weak Oversight

Q&A: Policies for Renewable Energy in Developing Countries

Kevin Lustig — Mon, 13 Dec 2010 11:42:18 -0500

Last month, WRI convened a group of international experts to discuss policies and incentives for increasing the use of renewable energy in the developing world. WRI’s Davida Wood and Lutz Weischer discuss the key lessons learned at the workshop and their work on helping developing countries make the transition to renewable energy.

What are some of the key renewable energy success stories in developing countries?

Lutz: There are many success stories, as many developing countries have scaled up renewable power in recent years. Of course, China gets a lot of attention, but the trend is much broader than that. The Renewables 2010 Global Status Report counts 45 developing countries with renewable energy targets and 42 with some sort of promotion policy.

One approach that has worked well in many countries is the so-called “feed-in-tariff,” which is a guarantee that renewable energy producers will be able to sell the electricity they generate at a price set in advance by the government. To date, there are 78 countries, states, and provinces that have passed feed-in-tariffs for renewable energy, including a rising number of developing countries. These include major emerging economies such as China and India, as well as smaller countries such as Tanzania and Thailand. In all of them, the feed-in-tariffs have led to more investment in renewable energy generation and an increased share of renewables in the electricity mix.

Davida: In India, electricity regulators at the state level have a mandate to set feed-in tariffs for a range of renewable energy technologies. Some of these state regulators have been very active and have succeeded in attracting considerable investment. For example, in the state of Gujarat, the regulatory commission set a tariff in January 2010 for photovoltaic solar power. Power purchase agreements for 500 megawatts (MW) were signed in just six months, backed up by financial guarantees.

But there are other approaches. In Brazil, after experimenting with various incentive schemes for increasing investments in renewable energy, the National Agency for Electrical Energy held the country’s first wind-only power auction in December 2009. More than 1800 MW of wind power was contracted for.

Lutz: One thing I’d like to add on India is that this has also been a success story for industry development and employment. India’s use of policies to create stable demand for wind power has led to development of a successful manufacturing base, making India the fifth largest wind power market in the world. An Indian company, Suzlon, which began in 1995 with just 25 people, is now the third largest wind turbine manufacturer in the world, employing over 16,000 people globally.

What are the barriers to increased development of renewable energy in the developing world?

Lutz: The number one barrier to renewable energy scale-up in the developing world is cost. Access to modern forms of electricity is crucial for both basic improvements in quality of life and for being able to develop a robust, modern economy. But most people in developing countries simply cannot afford the cost of electricity with increased renewables. They need policies that drive down the costs and increase the deployment of these technologies. Until clean power technologies reach full price parity with fossil fuels, even the best policies will come at an additional cost that can’t be borne by poor ratepayers in developing countries. That’s why international support is needed. For an international donor like the World Bank that’s committed to increasing energy access, you will get more renewable energy if instead of investing in individual wind farms, you invest in the policy environment that makes people want to build wind farms.

You will get more renewable energy if instead of investing in individual wind farms, you invest in the policy environment that makes people want to build wind farms.

Davida: An important element for this approach is access to data and methodologies. While feed-in-tariffs are widely adopted, regulators do not have sufficient access to information about the costs of renewable energy, and are dependent on project developers to provide these figures. At a forum convened by WRI and Prayas Energy Group, a commissioner from the Indian state of Gujarat I mentioned previously described the process by which his state’s tariff had arrived: a combination of technical inputs, public consultations, and artful guesswork. Participants at the renewable energy policy workshop we recently held at WRI also stressed that access to methodologies, benchmarking data and performance metrics, and techniques of competitive bidding are badly needed to support development of renewable energy resources. Independent oversight from civil society is a key ingredient here.

Lutz: That’s right; feed-in-tariffs can be quite successful, but they’re only successful if you’re doing a good job in setting your rates. If you set rates too low, you get no deployment, but if you only rely on information from developers, you end up setting your rate too high and providing windfall profits. Even if there’s good policy in place, developing countries often don’t have the domestic investment capital for these projects. So, you need an international mechanism that mobilizes finance and investment for these projects at affordable interest rates.

Davida: Furthermore, from a planning perspective, much more could be done to design off-grid renewable energy systems–in rural areas for example–that take advantage of the synergies between different forms of renewable energy. For energy on the grid, building capacity on integrated resource planning is key to integrating renewable and conventional energy sources.

Lutz: Yes, that’s true; the challenge of managing a national grid with multiple intermittent sources of energy is greatest in developing countries. You need engineers who are able to install renewable energy technologies, maintain them, and manage the grid.

Finally, some countries simply have not been able to replicate these success stories because they don’t know about them, or don’t know how to implement them in their own countries. So, one priority is facilitating the exchange between countries that have policies and those that don’t.

What is WRI doing to help overcome these barriers?

Lutz: We’re working with the World Bank on reforming their energy strategy, so that in the future, renewables will play a larger role in the Bank’s portfolio. We are also helping to disseminate information on successful policies, for example by convening a renewable energy policy workshop together with the Heinrich Boell Foundation North America. The workshop brought together 20 experts from developing countries that have implemented these policies or are currently considering them.

In the context of the United Nations climate change negotiations, we are advocating for a technology mechanism that will support capacity building and knowledge sharing on regulatory and policy incentives for renewables. We’re also working with negotiators in parallel processes such as the Clean Energy Ministerial and bilateral initiatives. In the coming months, we’ll also be working closely with major emerging economies to develop low-carbon development strategies for their power sector.

Davida: WRI’s Electricity Governance Initiative [EGI] is a joint project of WRI and Prayas Energy Group that works with civil society organizations in developing countries to analyze policy and regulatory decision-making processes. We are increasingly turning our attention to renewable energy. We have convened three forums that have brought regulators and civil society together to share experiences. Prayas has written a seminal paper on attempts to promote clean energy in five Indian states that holds lessons relevant to other countries. And our partners in South Africa and Thailand have used EGI methodology to intervene in national planning processes.

What’s next for this issue? What signs of progress should we look for in the near future?

Lutz: One thing we should look for is an increase in the number of countries that use these policies. There are also international moves in the works. Deutsche Bank has proposed a global feed-in-tariff mechanism. It will be interesting to see how that develops. The revised World Bank energy strategy will come out in 2011, and will hopefully give more weight to renewable energy. We should also look towards the technology mechanism that came out of the climate conference in Cancun, which will create a network of experts and clean technology centers that will help share experiences and build capacity. I’m also optimistic that the Clean Energy Ministerial next year in the United Arab Emirates will produce some more ambitious initiatives on renewable energy.

Davida: There are a lot of promising signs to look for: countries developing a better understanding of best practices in clean energy regulation. These include standardized power purchase agreements; increased transparency of the methodologies used to assess resource capacity, costs, and performance (which will benefit both governments and civil society organizations); harmonization of renewable and conventional energy policy and planning. Most of all, though, the way you’ll know that these policies are working is when you see falling prices and improved reliability for electricity from renewable sources. Ultimately, that’s the real test of these policies.

A Climate of Corruption? Transparency Challenges for Cancun and Beyond

Manish Bapna — Mon, 29 Nov 2010 16:29:27 -0500

An update from the International Anti-Corruption Conference.

At the start of the international climate conference in Cancun, the international anti-corruption movement is weighing into the debate on how to shape a new global treaty and deliver effective climate financing to developing countries.

Issues of transparency and accountability have long been a source of contention, and a barrier to progress, in the UN-led climate negotiations. Disagreement between developed and developing countries over how to make actions and policies taken by countries robust and comparable has undermined the trust essential for effective global cooperation to halt rising temperatures. More recently, the issue of climate financing has become a bone of contention, with developing countries questioning whether the money pledged by industrialized countries is new, or simply diverted development aid.

Last month in Bangkok, Transparency International organized the 14th International Anti-Corruption Conference (IACC), which focused in part on the the transparency and corruption challenges associated with climate policy, climate finance for mitigation and adaptation, and carbon markets. WRI prepared the IACC background document on climate change and corruption and has been advising Transparency International on the 2010 Global Corruption Report, which also take climate change and corruption as its theme.

WRI Resources on Climate Finance

In a plenary presentation, WRI’s executive vice-president, Manish Bapna, focused on transparency in adaptation. He highlighted the “significant corruption and governance risks at each stage of funding for climate adaptation – how it is generated, how it is managed, and how it is spent.” Bapna highlighted the following specific questions and issues for policymakers to grapple with:

Transparency and accountability in the generation of adaptation finance.

With $30 billion pledged for climate finance for 2010-2012 and about $100 billion annually by 2020 (a figure comparable to total Official Development Assistance (ODA) today), making sure that these flows are corruption-free will be a massive challenge. Greater transparency on whether these funds are “new and additional” and a “balanced” amount is being allocated to adaptation will be crucial to creating trust between rich and poor countries.

Corruption and governance risks related to who should manage adaptation finance

Should adaptation financing be entrusted to multilateral and bilateral aid agencies such as the World Bank (what rich countries want) or should national institutions in developing countries have direct access to these funds? Rich countries argue that many of the new institutions created in developing countries lack the fiduciary controls and safeguards that, however flawed, have been tried and tested in the multilateral banks. Poor countries argue that adaptation finance is fundamentally different from development aid and should not be channeled in the same way.

New corruption risks related to how adaptation funding is spent

Sectors that will receive significant adaptation money include water, infrastructure and disaster relief. Yet all these have typically been characterized by high levels of corruption.
Corruption pressures are likely to pull funding to projects that are large and concrete-heavy (such as new infrastructure). This is the opposite of the small, local and flexible solutions often needed to deal with climate impacts.

Bapna concluded by calling for collaboration between the anti-corruption and environmental communities to help make emerging adaptation funds in developing countries more robust and corruption-proof. Efforts should include working with adaptation institutions in developing countries to make their governance and operations more transparent and inclusive as well as with civil society organizations to build their capacity to hold these institutions to account.

In a related IACC conference workshop, WRI’s electricity governance (EGI) team focused on how to address pervasive corruption in the capital-intensive electricity sector. Kickbacks to government officials to secure contracts for building new power plants or providing fuel or equipment are common, and clean energy technology markets are also not immune to fraud or corruption. These conflicts of interests can affect power development plans that shape a country’s energy choices. The workshop showcased innovative strategies to fight corruption in a sector that has historically received little attention from civil society, yet is at the center of sustainable development and climate change efforts. Speakers from EGI civil society partner organizations shared experiences from four different countries: Thailand, India, Indonesia, and South Africa.

EGI will soon compile a compendium of these examples and other emerging strategies and challenges that will be available on its website: http://electricitygovernance.wri.org