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CLIMATE CHANGE: Carbon Markets – What’s In It for the Poor?

Stephen Leahy* - Tierramérica

UXBRIDGE, Canada, Dec 15 2008 (IPS) - Climate experts meeting in Poznan, Poland, promised to create a new pot of carbon-credit gold for the rural poor as guardians of rural lands and forests.

An Aymara woman plants trees in a mountainous valley in Bolivia.  Credit: Franz Chávez/IPS

An Aymara woman plants trees in a mountainous valley in Bolivia. Credit: Franz Chávez/IPS

But there are many who warn that the gold will flow only to corporate interests.

One of the most effective ways to combat climate change, caused by gases like carbon dioxide that trap heat in the atmosphere, is through biological sequestration of carbon in plants, trees and soils. That means reducing deforestation, increasing reforestation, and utilising sustainable agriculture and grazing practices that conserve soil and water.

If these activities become part of a multi-billion-dollar global carbon finance regime, under a new 2009 climate treaty, there could be extraordinary benefits for the rural poor and the environment, according to Olav Kjørven, the former director of the United Nations Development Programme’s (UNDP) Energy and Environment Group.

“Enabling the poor to tap that new potential income, however, implies providing the legal tools and protection to reap the benefits of their good stewardship,” Kjørven states in the report “Opportunities in Environmental Stewardship: Climate Change and Legal Empowerment of the Rural Poor”, coauthored with Estelle Fach.

Delegates from more than 190 countries met Dec. 1-12 in Poznan to hammer out some of the final details for a new climate treaty under the United Nations Framework Convention on Climate Change (UNFCCC).

Targeted for completion in Copenhagen late next year, the new climate treaty will be the successor to the 1997 Kyoto Protocol, which has been in force since 2005 and expires in 2012.

A new Copenhagen treaty will require substantial reductions in greenhouse gas emissions from all countries and create an adaptation fund to help poor countries implement sustainable economies and adapt to the impacts of climate change.

“It is essential to ensure that future, market-based financing mechanisms under the Climate Change Convention will not exclude the rural poor, but work for their benefit,” Kjørven told Tierramérica.

Some tools already exist, like the Clean Development Mechanism (CDM), to help countries and corporations of the wealthy North to meet their obligations to reduce greenhouse gas emissions, with the incentive of creating a carbon market where credits or certificates are traded, like shares on the stock market.

The UNDP would like to see an equitable sharing of benefits arising from carbon emission reduction activities.

With access to carbon finance activities, like sustainable agriculture and protecting forests that sequester or “lock up” carbon in plants, trees and soils would generate rural incomes and reduce large volumes of greenhouse gases. Biodiversity, habitats, soils, and water would all improve as well, says Kjørven.

A reformed CDM and a new climate treaty could provide the global, regulated, transparent and equitable framework needed to bring this grand “carbon-into-gold” vision into existence, he says.

The CDM allows industrialised countries to obtain credits by investing in clean energy projects in the developing South.

Since 2005, more than 4,000 CDM projects have been authorised, providing billions of dollars of public and private investment to reduce emissions in developing countries.

However, because of the complexity and cost of participating in the CDM, only large projects from countries like Brazil, India and Mexico have received funding.

More importantly, conservation of existing forests is not part of the CDM even though 20 to 25 percent of carbon emissions originate from the conversion of forests and woodlands.

“Forests are disappearing at record pace and we’ve got to change the rules of the game in favor of protecting what is left,” says Kjørven.

There was broad agreement in Poznan that if substantial carbon credits for conservation of forests were available, then it would be more profitable or beneficial to conserve rather than convert forests into lumber or clear for agriculture, says Frances Seymour, director general of the Center for International Forestry Research (CIFOR).

“Forests are crucial for fighting and adapting to climate change,” Seymour said at a press conference in Poznan.

CIFOR, among many others, favours a pay-to-preserve forests scheme known as Reducing Emissions from Deforestation and Degradation (REDD).

Under REDD, richer countries would pay to maintain forests in tropical regions to offset their own emissions of climate-changing gases.

“We must include forests in our strategies to deal with climate change. If we do not, we could face a nightmare scenario, a positive feedback loop, in which emissions from deforestation and degradation feed global warming, which in turn accelerates forest loss,” Seymour said.

The lack of land tenure for the rural poor in many parts of the world would be a major block to accessing carbon finance, acknowledges Kjørven.

“This means that we have to support efforts country by country to establish the necessary institutions and systems and ensure that land rights issues are clarified,” he added.

The precarity of land rights in the new era of global carbon finance will deprive the poor of potential revenues and “inevitably lead to exploitation, loss of livelihoods, further marginalisation and a plethora of other social and environmental damages,” he warns.

There are no guarantees the poor will benefit under such as system, and the reality could be quite the opposite, says Miguel Lovera, chairperson of the Global Forest Coalition, an international non-governmental organisation headquartered in Paraguay.

The talks in Poznan seemed to be more about trade and money for private enterprise than about reducing emissions or helping the poor, Lovera told Tierramérica from that Polish city.

“There is an aggressive promotion of market mechanisms as the only way to solve the climate crisis,” he said.

It is also doubtful that a carbon finance system can compete with the profits that can be made converting forests into soybean fields or palm oil plantations, according to Lovera.

“Strong policy decisions by national governments to protect forests are what is needed not complex market mechanisms,” he said.

Kjørven agreed that complexity must be avoided, but he stressed that “it is even harder to see how halting deforestation can be done without creating market-governing rules that can shift investments in favor of conservation and sustainable practices.”

(*This story was originally published by Latin American newspapers that are part of the Tierramérica network. Tierramérica is a specialised news service produced by IPS with the backing of the United Nations Development Programme, United Nations Environment Programme and the World Bank.)

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