1. Carbon Markets and indigenous communities The real world impacts of carbon markets
Gilles Dufrasne
Policy Researcher, Carbon Market Watch
10/07/2018

2. Part 1: Carbon markets: architecture and state of negotiations Part 2: Local impacts and indigenous people

3. Before we start…
Emissions Trading System: Capped system where entities (companies) receive allowances which give them the right to pollute  allowances are delivered prior to the polluting activity e.g. European Union ETS Carbon (credit) market: System under which achieved emission reductions are traded Credits are delivered after the mitigation activity e.g. Clean Development Mechanism

4. Why does it matter?
Main carbon markets are project based  serious local impacts on people and environment
Similarities with green bonds (financing mitigation projects through markets)
But:
Carbon credits = purchase of emission reductions
Green bonds = loans
Bonds can be ineffective, but Carbon Markets can reduce overall mitigation!

5. CDM: Clean Development Mechanism
JI: Joint Implementation
IET: International Emissions Trading
SDM: Sustainable Development Mechanism
CORSIA: Carbon offsetting and Reduction Scheme for International Aviation

6. From CDM to SDM
CDM
SDM
Most emission reductions would have happened anyway
(73% of credits unlikely to be additional)
Some Human Rights infringements and severe negative impacts on people and the environment
“Deliver overall mitigation in global emissions”
“Promote sustainable development”
 Starts with better safeguards
Local stakeholder consultation rules and grievance mechanism
Practitioner’s guide for local stakeholder consultations 
CMW, May 2018

7. What is CORSIA? Carbon Offsetting and Reduction Scheme for International Aviation
Voluntary start in 2023 (All ICAO members in 2027)
Offsetting aviation’s growth in emissions above levels
Offsett criteria being negotiated
Increasing tensions: EU, China and others threatening to leave
This system will not reduce (much) the aviation sector’s environmental impact!

9. Brazil’s role
Seller of carbon credits (around 7% of CDM credits, 4th largest supplier)
Position on UNFCCC market negotiations:
Wants to keep things as they are: CDM methodologies, credits, projects to be accepted in new markets
Wants to double count credits (!!)
Need to raise awareness about the dangers of these positions

10. Part 2: Local impacts and indigenous people

11. Barro Blanco hydrodam CDM project

12. Climate Benefits, tenure costs: The Economic Case for Securing Indigenous Land Rights in the Amazon, World Resources Institute (2016)

13. From: Climate Benefits, tenure costs: The Economic Case for Securing Indigenous Land Rights in the Amazon, World Resources Institute (2016)

14. From: Climate Benefits, tenure costs: The Economic Case for Securing Indigenous Land Rights in the Amazon, World Resources Institute (2016)

15. From: Climate Benefits, tenure costs: The Economic Case for Securing Indigenous Land Rights in the Amazon, World Resources Institute (2016)

16. From: Climate Benefits, tenure costs: The Economic Case for Securing Indigenous Land Rights in the Amazon, World Resources Institute (2016)

17. Carbon credits for protecting the Amazon? No!
Difficult to measure exact emission reductions (baseline?)
Impermanence of CO2 storage in trees
What then?
Climate finance for forest projects (with social safeguadrs)
No more offsetting!

18. Some food for thoughts…
Social safeguards in UNFCCC markets are key
 Local stakeholder consultations and grievance mechanism
Need to end the CDM and improve next generation
Buyers will be the airlines (not countries!)
Double counting of credits is a massive danger (and Brazil is a key stakeholder to engage with)
Similarities between carbon credits and green bonds markets? (different performances?)