Study Scope and Methodology
This study seeks to present the engagement of Indigenous Peoples and local communities in the carbon markets discourse as an emerging solution to climate change. It involved six countries from Asia, Africa, and Central America. The scoping study was comprised of desktop research and consultations with indigenous communities and interactions with authorities at the country level. Desktop research was conducted to inform the background of the report, including the state of activity around carbon markets.
Executive Summary
The emerging carbon markets especially the voluntary carbon markets are taking a strong presence in the market. The emergence of the carbon markets has been an attempt to fix the market failure or an instance where economic resources are allocated inefficiently. A market failure is not giving the incentives that it should give for conserving resources, in this case the atmosphere and concentrations in the atmosphere. From the economic point of view, there is a need to account for the damage done by the market in relation to keeping the atmosphere safe and livable for all. Standards or regulations are also important in tackling the market failure, and as countries and various sectors explore the carbon markets, regulations or standards are inevitable. The importance of research and development should be done as well.
As noted in the country reports, the carbon markets have existed in the context of different national and international frameworks. The rights of ownership over carbon assets, and their treatment when traded as carbon credits, are derived from laws, regulations, and customs in the applicable jurisdiction and as such is subject to the evolution of these laws, regulations, and customs over time. The implementation of countries’ first Nationally Determined Contributions (NDCs) under the Paris Agreement is also shaping a country’s intention to generate, own, and use carbon credits. Added to the legal framework is the adoption of guidance for Article 6 of the Paris Agreement which provides a new international context for the voluntary carbon market to operate.
From the experiences of Indigenous Peoples in the six countries studied, governments have now a greater interest in tracking and in some cases incentivizing and managing carbon market activities that can be counted towards the targets set in their NDCs.
Governments of these countries have taken and are taking steps to track their carbon market activities, for instance, requiring registration and monitoring on the national registry. Some have introduced approval procedures, or a statement of no-objection before activities can proceed. Some governments are taking steps to incentivize the development of carbon market activities within their jurisdiction by sponsoring the establishment of local market architecture or by clarifying the legal classification of carbon credits.
All countries are keen on the rightful implementation of Free Prior and informed Consent (FPIC), a basic right of Indigenous Peoples to participate in any issue that would impact their life and resources.
As all these developments are taking place, Indigenous Peoples are anticipating participation or engagement in the process. Engagement of Indigenous Peoples varies as they exercise their rights to generate carbon credits, and own and use the carbon credits. Based on the experiences to date the right to carbon ownership is likely to be affected over the course of time. The potential of carbon markets to all sectors especially the private sector is being considered by Indigenous Peoples as likely to affect the ownership of carbon credits directly or indirectly.
Indigenous Peoples are responding to carbon markets with concern regarding the diverse and increasing interest in carbon trading. The success of carbon markets should be able to provide benefits to Indigenous Peoples and local communities, economies, and environments, and achieve national commitments and objectives. The active role of Indigenous Peoples is inevitable in achieving a net-zero because they manage and protect around 40 percent of ecologically intact landscapes. The respect for their importance will help ensure high integrity carbon credits that recognize and safeguards their rights, livelihoods, and values.