Information for climate finance accountability regimes: Proposed framework and case study of the Green Climate Fund
| Published date | 01 December 2022 |
| Author | Rishi Basak,Sylvia Karlsson‐Vinkhuyzen,Katrien J. A. M. Termeer |
| Date | 01 December 2022 |
| DOI | http://doi.org/10.1002/pad.2000 |
Received: 26 October 2021
-
Revised: 5 December 2022
-
Accepted: 8 December 2022
DOI: 10.1002/pad.2000
RESEARCH ARTICLE
Information for climate finance accountability regimes:
Proposed framework and case study of the Green Climate
Fund
Rishi Basak
|Sylvia Karlsson‐Vinkhuyzen |Katrien J. A. M. Termeer
Wageningen University & Research,
Wageningen, The Netherlands
Correspondence
Rishi Basak, Wageningen University &
Research, P.O. Box 8130, 6700 EW
Wageningen, The Netherlands.
Email: rishi.basak1@gmail.com
Abstract
This paper addresses the role performance information plays in the accountability
regimes of international climate change financing institutions and how this can be
improved. It has been argued that the quality of the performance information of
projects financed by public and private sources, as well as how that information is
used, influences decisions made by the various actors in the accountability regimes,
including the ability to hold actors to account. A theory‐based framework is
developed to analyze and enable the improvement of the information produced and
used in climate finance accountability regimes. The framework is tested by applying
it to the Green Climate Fund via document analysis and key informant interviews.
With the help of the framework, gaps are identified, and improvements are sug-
gested so that account holders and account givers can better fulfill their respective
roles in the given accountability regime.
KEYWORDS
accountability, accountability information assessment framework, accountability regime, civil
society engagement, climate finance, Green Climate Fund, performance information,
performance measurement
1
|
INTRODUCTION
Climate change financing is necessary to help developing countries
mitigate greenhouse gases and adapt to climate change. The specific
requirements and particular circumstances of the Global South
concerning funding are widely recognized, including in the Solidarity
and Just Transition Silesia Declaration at the United Nations
climate conference in Katowice in 2018 (UNFCCC, 2018). To meet
the financial needs of developing countries, resources are being
mobilized by donors and put toward large multilateral funds, such
as the Green Climate Fund (GCF). In turn, these multilateral funds
allocate the resources to projects executed by entities such as
regional development banks and United Nations organizations, who
often hire third‐party implementers accountable for results. This
delegation chain forms a set of accountability regimes, or
accountability “webs” (Romzek, 2015). For instance, there is evi-
dence that financial instruments, such as green bonds, are being
issued in part to finance climate action and for the achievement of
Nationally Determined Contributions (Tolliver et al., 2020). Such
financial instruments are associated with accountability webs and
have post‐issuance reporting requirements (environmental and
otherwise) to satisfy actors in capital markets (Ng, 2018). Reporting
on performance is an essential component of accountability
(Gomes, 2017).
This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, pro-
vided the original work is properly cited.
© 2022 The Authors. Public Administration and Development published by John Wiley & Sons Ltd.
Public Admin Dev. 2022;42:261–280. wileyonlinelibrary.com/journal/pad
-
261
Throughout this paper, the term accountability will refer to: “[A]
relationship between an actor and a forum, in which the actor has an
obligation to explain and to justify his or her conduct, the forum can pose
questions and pass judgment, and the actor may face consequences”
(Bovens, 2007, p. 450). Accountability regimes are the actors
involved in giving account and holding others to account, combined
with the management systems in place to foster accountability. Each
set of account giver and account holder (and associated management
systems) therefore represents an individual accountability regime
(Wolfe, 2015). In this paper, each accountability regime is
approached as a standalone “principal‐agent” relationship (Basak &
van der Werf, 2019; Brett, 1993).
As previous research has shown (see, for example, Goldsmith and
Basak (2001)), a key impediment to resolving the principal‐agent
problem in accountability relationships is the lack of appropriate
performance information for accountability purposes. Asymmetric
information exists whenever the agent possesses information not
available to the principal (Grossman & Hart, 1983; Sappington, 1991).
Asymmetric information increases the likelihood of the agent not
providing the maximum level of effort toward project implementation
and risks reducing project performance (Grossman & Hart, 1983;
Sappington, 1991; Spence & Zeckhauser, 1971). Improving perfor-
mance is one of the major expectations of a diverse set of account
holders and a reason for the rising importance of accountability in
“good governance” (Dubnick, 1998). Information asymmetry also in-
vites the embellishment of environmental performance and what
some have called “greenwashing” (Laufer, 2003; Milne &
Patten, 2002) and can reduce the amount of capital that can be raised
(El Ghoul et al., 2011,2017; Meyer et al., 2009).
A growing body of literature recognizes that the quality of
the information for projects financed by public and private sour-
ces, as well as how this information is used, have a bearing on the
decisions made by the various actors involved in accountability
regimes (Adam & Gunning, 2002; Holzapfel, 2016; McGilliv-
ray, 2003). For instance, deciding whether to penalize or reward
an agent for their performance will be influenced by the quality of
information (Basak & van der Werf, 2019). The reduction of
informational problems in political accountability relationships can
reduce corruption (Lederman et al., 2005). However, although
performance information is acknowledged as fundamental to
accountability regimes, few authors guide the specific information
requirements for a properly functioning accountability regime
(Boyne et al., 2002; Connolly & Hyndman, 2004). This lack of
guidance in the literature is the gap that this paper attempts to
fill. We do so by developing a theory‐based framework to sys-
tematically determine the information requirements and how such
information is best used for account giving and account holding
purposes in climate finance accountability regimes. The research
question addressed in this paper is: What performance informa-
tion should be produced, and how should it be used to strengthen
the accountability regimes of international climate change
financing institutions?
The remainder of the paper is organized as follows: the next
section outlines the accountability information framework for inter-
national climate change financing and how it was developed. Then, in
Section 3, the framework is applied to the GCF. This is followed by a
discussion section, where considerations are raised regarding the
framework's improvement and application. Finally, conclusions are
provided, and areas for further research are suggested.
2
|
ASSESSMENT FRAMEWORK
The framework described in this section is an assessment tool to
systematically determine the information requirements in account-
ability regimes and how such information is best used for account
giving and account holding purposes. The literature on the role of
information in accountability regimes was reviewed to identify
framework components and evaluative criteria. The literature re-
view was undertaken as a developmental review (Templier &
Paré, 2015). As such, the review was iterative, with an initially
broad search that included empirical and conceptual studies, which
was then refined based on evidence from the initial set of papers
found. The initial search covered several streams in different dis-
ciplines (e.g., accounting, management, organizational behavior),
emphasizing the public administration literature. Public administra-
tion literature is particularly relevant for this paper as most climate
finance is managed by public sector organizations (UNFCCC
Standing Committee on Finance, 2018). The review was not time‐
bound to the most recent articles, as the literature from the last
few years is scant on the topic. The emphasis was on peer‐reviewed
journal articles, but other sources (e.g., book chapters) were
included when relevant. The main search terms were “accountability
and information,” “information for account holding,” as well as
“performance information and accountability.” The search was
limited to English language literature and was undertaken via the
Wageningen University online library, which includes the Web of
Science and Scopus databases.
The literature review helped identify the three main compo-
nents of the framework: the nature of accountability relationships;
the timeline of accountability, and several evaluative criteria for
accountability information. Once initial criteria were identified and
defined, these were evaluated to ensure they added analytical
value to the framework and that criteria were distinct and not
overlapping. This evaluation was undertaken iteratively by the
authors with expert consultation. The criteria were then tested by
applying them to a case study through document analysis to see if
the criteria captured key aspects of accountability information. This
resulted in merging certain criteria and clustering under two cat-
egories: attributes of information and attributes of the perfor-
mance information utilization process. The components of the
developed assessment tool, called the Accountability Information
Assessment Framework (AIAF), are described in further detail
below.
262
-
BASAK
ET AL.
Get this document and AI-powered insights with a free trial of vLex and Vincent AI
Get Started for FreeStart Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting