Every year, investments worth 50 trillion Ft flow through uncontrolled markets of the world to mitigate climate change.

11 May 2011, Budapest – Today, Transparency International Hungary presented the Global Corruption Report of the international anti-corruption organization, which analyzes the corruption risks of climate change. The Report gives practical recommendations to governments, international organizations and companies about the elements of good governance in the field of climate policy.

More than 50 experts from 20 different countries participated in the study of Transparency International. The researchers analyzed the channels of influence in decision-making processes, the control systems of subsidies and the corruption risks of renewable energy sources.

By 2015, climate-change-related disasters will directly affect 375 million people, and by 2020 almost 700 billion USD will be invested in this area; therefore, climate change is undoubtedly the greatest political challenge the world has ever faced. Because of the complexity and the novelty of the problem, corruption risks are extremely high.

“The most important message of the Global Corruption Report is that strengthening government control mechanisms can reduce corruption and make climate policy more effective and successful; however, in order to achieve these goals, decision-making processes should be more transparent”, said Ádám Földes, director of Transparency International’s Hungarian office. Undue influence and the diversified lobbying landscape are some of the greatest challenges. According to the study in 2009 at the national level, oil and gas interests alone outspent the clean energy sector by a factor of eight in lobbying. Non-transparent influencing processes were also emphasized in the Hungarian chapter of the Report, which analyzed the abuses in the trading of carbon dioxide emission allowances, the shortcomings of the EU regulation, and the problems related to the National Allocation Plan, which sets the number of allowances given to Hungarian pollutant facilities.

The problems of the Emission Trading System of the European Union (ETS) highlighted that the illegal lobbying of the market has resulted in distributing extra allowances and, due to the ETS, Europe’s four biggest energy companies realized an unexpected profit of 6-8 billion euros.

According to Dr. Sándor Fülöp, the parliamentary commissioner for future generations, we can tackle corruption and the denial of these problems if we draw attention to the immediate dangers threatening us and to the complexity of the topic. The ombudsman said that, in Hungary, the main reasons of climate change related corruption are the multiple organizational transformations, the changes of personnel, the unrealistic shortening of the consultation periods, and the lack of systematic perspective in recent years. In order to address the problems related to the utilization of the amounts received from the trading of allowances, a climate fund should be established, so that the transparency of the system can be ensured in the future.

In order to take effective action, the Global Corruption Report has proposed measures which ensure the monitoring of the performance of emitters, regulators, investors, and government, as well as the transparency of resource allocation, the capacity required for implementation and control, and the application of the existing integrity and accountability systems.

Following an extensive consultation process, Transparency International Hungary will present the Hungarian edition of the Report in autumn 2011, in cooperation with the interested parties in climate policy. The aim is to contribute to the cooperation of climate policy experts and decision makers, besides making Hungarian processes – the utilization of the amounts received from the trading of allowances – more transparent.

Further information on the Global Corruption Report can be found on the homepage of the international anti-corruption organization:
http://www.transparency.org/news_room/in_focus/2011/gcr_climate_change