Transparency and Corruption Prevention in Financing Climate Action

Abstract

The article summarises the arguments and counter-arguments within the scientific debate on enchancing the climate finance transparency. The main purpose of this study is to investigate the mechanism of climate finance and identify the key challenges that hinder the effective climate fund monitoring system. The relevance of addressing this research problem is due to the fact that the largest recipients of international climate finance are countries with high corruption risks, low standards in protection human rights, low trust in law enforcement and judicial authorities, etc. Therefore, the reporting and the quality of the reports prepared on the funds received under international assistance programmes is an important component of establishing long-term relations and trust between donor-countries or receipient-countries. The article examines the issue of climate finance transparency in the following logical sequence: analysed scientific publications on the issues of transparency and corruption in climate finance, examined the institutional mechanism of global climate finance, analysed the scale of climate finance in the world, and identified the main challenges in improving the transparency and efficiency of climate funds. The study was conducted using empirical (observation, description) and theoretical (grouping, synthesis, abstraction) research methods. The paper substantiates that the strengheting transparency of climate finance in developing countries requires a comprehensive approach - on the one hand, improving the level of justice, judiciary, enchancing the work of local regulatory authorities, developing legislation in recipient countries of international financial assistance, and on the other hand, improving the methodology of integrated accounting and reporting on the receipt and use of climate funds, as well as tracking the effects of project implementation. The study found that the key challenges that hinder the formation of an effective climate funds monitoring system are: a data collection and reporting system, an accounting and reporting system, and a coordination system.