Introduction

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.