The 27th Conference of Parties (COP) for the U.N. Climate Change Conference is set to gather this November in Egypt, and the stakes have only gotten higher in the last year. A record year of climate disasters has claimed thousands of lives and endangered national economies, quite literally turning up the heat on climate change prevention and mitigation commitments. To make matters worse, recent research has pointed out that existing commitments will fail to limit emissions growth by 2030 even if they were successfully implemented, which current progress calls into doubt. With developing countries concerned about a lack of financial support from wealthier countries that are responsible for a majority of historical emissions, there is likely to be significant pressure on countries such as the United States to prove their commitment to fighting the climate crisis.
The U.S. can certainly point proudly to its historic investments of hundreds of billions of dollars into clean energy, passed this year through the Inflation Reduction Act, as a cause for optimism. An additional way for the Biden Administration to bolster its climate policy is by finishing the job on a slew of anti-corruption reforms. By implementing and making the case for anti-corruption efforts as a climate tool, the U.S. can not only bolster its own reputation on the world stage but also inspire other nations to follow suit.
The Need to Tackle Corruption in the Fight Against the Climate Crisis
The connections between increased corruption and delayed climate action should come as no surprise: kleptocracy and an overreliance on fossil fuels go hand in hand. The highly concentrated wealth provided by control over natural resources, particularly oil and natural gas, both attracts and then supports the schemes of would-be oligarchs and autocrats. In turn, these kleptocrats enshrine the importance of these natural resources to local and global economies to cement their rule. As the Russian invasion of Ukraine has demonstrated, these kleptocrats are capable of leveraging these natural resources and the wealth and geopolitical power they bring to aggress against their neighbors, creating a political and environmental disaster.
Academics have long described this as a part of a “natural resource curse,” where access to valuable resources, particularly oil, stymies equitable economic growth and encourages autocracy in place of democracy. The supposed curse certainly does not guarantee failure for resource rich countries, as the likes of Norway and Botswana have shown, but success often comes back to one important variable: corruption.
The connection between corruption and worsened environmental outcomes goes beyond fossil fuels, however. Illegal deforestation flourishes in countries with weaker governance rules that may both lack the ability to enforce environmental protections while also being more susceptible to bribes. As the largest environmental crime by value, generating up to $152 billion annually in illicit proceeds, illegal logging is likely to continue as shadowy corporations are able to pay ever more bribes for access to protected lands. In addition to threatening existing forests, our natural defenses against climate change, corruption also defeats our human interventions to protect the planet. The potential hundreds of billions of dollars in annual climate financing makes for a prime target for embezzlement and fraud. Transparency International’s Climate Governance Integrity Programme has been able to develop an impressive atlas of cases of climate finance corruption.
U.S. Draws Climate and Corruption Closer in Recent Strategies
In this light, products like USAID’s recent “dekleptification guide” can be read not only as an anti-corruption handbook but as a key tool in the fight against the climate crisis. Looking at other resources and strategies published by the Biden Administration, this connection is more than a mere accident. The U.S. has consciously but quietly made the case for corruption as a climate issue across government.
The U.S. Strategy to Counter Corruption released last December, for instance, articulated this connection in underscoring how corruption has curtailed “the ability of states…to address climate change” and called for the U.S. to “integrate anti-corruption considerations into its activities to provide $11 billion in climate finance..to ensure that those funds achieve their intended purpose.” USAID has internalized these recommendations into both their climate strategy as well as their draft anti-corruption strategy.
Beyond defending climate financing projects from fraud, the U.S. is also preparing to go on the offense against criminal organizations exacerbating the climate crisis through their environmental crimes. Wildlife trafficking, among other environmental crimes, received a special focus in the Administration’s most recent National Money Laundering Risk Assessment, noting that such crimes “threaten biodiversity, accelerate climate change, perpetuate forced labor, and increase risks for the spread of zoonotic diseases.”
Anti-Corruption Reforms as Climate Priorities
In this context, there is good reason to review other anti-corruption reform wins as important steps in the fight against climate change. Take, for instance, the Corporate Transparency Act (CTA). Passed in 2021 after a decades-long anti-corruption reform campaign, the CTA moved a big step closer to implementation last month when the Treasury released the first of three final rules needed to set up the beneficial ownership registry. Once fully implemented, the CTA will prevent criminal organizations from abusing U.S. anonymous shell companies to provide cover for their schemes, including environmental criminals like an international wildlife smuggling and shark finning organization caught using a U.S. company in 2020 to facilitate their crime.
The U.S. could go further, however, to live up to its anti-corruption potential. For starters, the CTA’s landmark beneficial ownership registry, while promising, is concerningly overdue. The U.S. Treasury published the first rule nearly nine months after the full law was due for implementation. The Biden Administration should prioritize publishing the proposal for the second rule on access to the beneficial ownership registry by December, in time for the International Anti-Corruption Conference to be held right in Washington, D.C. The Treasury Department must ensure partnering law enforcement will have uncomplicated access to the database, giving likeminded climate allies the investigative tools needed to track and disrupt transnational environmental criminal organizations. For example, allies in Brazil’s new Lula government must be able to access information in the U.S. registry to aid in transnational environmental crimes investigations.
Congress also has an important role to play in advancing further authorities for the administration to wield in its fight against corruption. The ENABLERS Act, advanced by the House of Representatives this summer, would require certain “gatekeepers” to the financial system to adopt common sense anti-money laundering procedures to keep corrupt and criminal funds out of the U.S. As several leading environmentalist organizations pointed out in a recent letter to Congress, these funds can, in turn, enable environmental destruction abroad. Members of Congress should keep the ENABLERS Act at the top of their priorities as the House and Senate meet later this year in conference to hash out the must-pass National Defense Authorization Act.
Through multiple corruption and climate related strategies over the past year, the U.S. has gone far in articulating the important linkages between these issues. But with COP27 around the corner, global climate pledges under increasing scrutiny, and an anti-corruption conference in less than two months, now is the time to put strategies into action. These two reforms – accelerating progress on the CTA and passing the ENABLERS Act through Congress – would do just that.