Corruption is Hindering the Global Transition to Renewable Energy
PUBLISHED CATEGORY 19th IACC
Corruption is one of the biggest threats to effective climate action and an obstacle to the global transition from fossil fuels to renewable energy.
After decades of benefitting from the lucrative oil and gas business, fossil fuel companies and governments of producer countries are now hampering efforts to move away from fossil fuels, according to Alexandra Gillies from the Natural Resource Governance Institute (NRGI).
Speaking during the session titled Climate Action: Time for Integrity at the 19th International Anti-Corruption Conference, she said: “Narrow self-interest may run at odds with global efforts to address climate change as some use their power and wealth to protect their interests.”
How vested interests are influencing climate policy
Gillies sees three main types of culprits behind this: international (private) oil companies, oil-rich governments and national oil companies, who use both legal and illegal means to further their economic interests. They acquire undue influence through various ways, such as campaign donations and lobbying – many of their techniques fall into grey areas, as they might be legal in some jurisdictions.
The NRGI representative further pointed out that developments in the oil market can prompt corruption in fossil fuel sector lobbying: “Corruption is looking very different particularly when prices dropped dramatically. Desperation and tough economic times stimulate different types of corruption,” she said.
Political interference by oil and gas companies has also weakened institutions and governance processes put in place to mitigate climate change – they have to battle influence on policies and regulations, as well as lack of funding.
According to a report by the International Institute for Sustainable Development, fossil fuels get a support of over $370 billion a year as compared to renewable energy, which receives $100 billion. The World Economic Forum also indicates that in the two years following the signing of the Paris Agreement in November 2016, 33 major global banks collectively gave financing of over $1.9 trillion to fossil fuels.
COVID-19 – an unexpected ally in the fight against climate change?
Government responses to the current COVID-19 crisis, on the other hand, seem to have had a positive side effect for climate change. The Global Carbon Project (GCP) has reported a temporary reduction in greenhouse gas emissions during the coronavirus pandemic period as governments put in place measures to fight the virus. However, the GCP warned that government actions and economic incentives after this crisis will likely influence the path of global greenhouse gas emissions for decades. The direction of that path is uncertain, considering that in 2019, despite impressive progress with clean energy, global fossil fuel emissions increased.
Transparent contracts, accessible information
According to Gillies, there is a clear need for more transparency in order to successfully move away from fossil fuel. Payment and contract transparency in particular are key to fighting corruption by those who want to obstruct the global transition to renewable energy, so that mitigation funds are spent on their intended purposes.
Untransparent policy processes are often fueled by a culture of secrecy and a lack of access to information on government activities. Relevant information must be publicly accessible to ensure that policies and decisions are not unduly influenced by fossil fuel interests.