June 13, 2024
Climate finance is a mess. So much so that this year there is a significant push amongst veteran COPers to ensure that the COP29 summit prioritizes climate finance. Even if by some miracle humanity had 5-6 trillion dollars to immediately invest in climate change adaptation and mitigation, we wouldn’t have a clear idea of where or how to spend and invest the funds to attain the greatest impact.
From a civic tech perspective, climate financing presents myriad challenges – from an overabundance of conflicting standards and taxonomies defining climate adaptation or mitigation, through to a lack of accessible and specialized digital tools to shed light on opaque and convoluted private and blended finance flows – obfuscating public scrutiny and fiscal transparency.
One complex corner of the challenge is carbon market fiscal transparency. Carbon markets enable the trading of emissions allowances and carbon credits. Polluters can buy credits from projects that reduce greenhouse gas emissions, providing fiscal incentives for emissions reduction. Understanding how these markets operate: what trades are being made, by whom, etc. and ensuring that data are available for public consumption and use is critical to ensuring democratic oversight of the market.
There are numerous proven open tools and methodologies that already exist and – with a little calibration and coordination – could have a significant impact on carbon market transparency. Development Gateway’s Aid Management Platform (AMP) for instance has been used effectively by governments to track the flow of aid and provides a customizable infrastructure that could be adapted to include a module on carbon markets. Additionally, building upon the experiences of well-established fiscal transparency initiatives such as Open Contracting and Open Ownership, and research into development finance institution data disclosure undertaken by Publish What You Fund, there is a real opportunity to generate integrated approaches to carbon market transparency.