Responding to the effects of climate change and the mismanagement of natural resources has direct and significant consequences for poverty reduction and sustainable human development. In an effort to mitigate the negative impacts, substantial amounts of funds have been pledged and directed for climate change adaptation and mitigation measures. Similarly, the number of countries relying on extracting resources has been increasing, partly driven by high demand and prices for commodities. The extent to which climate finances or revenues from the extractive sector positively contribute to sustainable human development depends on the extent to which the money is spent for the intended purposes, without corruption and leakage. Besides the effectiveness and efficiency argument, corruption also exacerbates negative externalities in the environment and natural resource sector by distorting incentives and eroding the stringency of environmental regulations. Mitigating the risk of corruption in climate change finance, therefore, remains one of the priority areas.
Reducing emissions from the global forest sector has an important role to play in both mitigation and adaptation. The United Nations’ Collaborative programme to Reduce Emissions from Deforestation and Forest Degradation (UN REDD Programme) assists developing countries in building capacity to reduce emissions and participate in a future REDD+ mechanism under the United Nations Framework Convention on Climate Change (UNFCCC).
Natural resources can be a major source of revenue and opportunities for a country to foster its sustainable economic and social development and achieve internationally agreed development goals, including the MDG’s.