Carbon markets are expanding, with more companies investing in them each year to increase sustainability in their operations. These markets can be highly profitable, considering that revenue from compliance markets and carbon taxes reach nearly $100 billion in 2022. Despite the growth of carbon markets, coalitions advocating for the rights of Native and Indigenous populations have called for a pause in their operations until protections for rights and advocacy for Indigenous Groups are laid out explicitly, proactively, and comprehensively.
Indigenous People and Local Communities (IPLCs) have been involved in addressing climate change broadly, but they are continually excluded from the conversation about how to shape carbon markets. Some indigenous groups have benefited from carbon markets; as they not only preserve their forests and grasslands, but are a crucial revenue stream for some of the world’s poorest, forest-dependent communities. More often than not, carbon markets have clearly harmed IPLC communities, and they continue to worry about the plethora of problems that come with the commodification of Native lands. For example, carbon projects often neglect obtaining consent from IPLCs who have lived on the land for centuries, and when projects are carried out, the price calculations of carbon credits on Native lands perpetuate inequities.
IPLCs are engaged in ongoing struggles for rights and autonomy due to the fact that governments, states, and corporations do not respect their self-determination and land rights. In 2022, the Environment Minister of the Dominican Republic of the Congo, Eve Bazaiba was involved in a land-grab operation in the Tshopo province for carbon credits without consent of IPLCs living on the land. Few governments formally recognize IPLCs’ land rights, and what is more concerning is that a growing number of governments are asserting public ownership over land associated with carbon credits after they learn about its profits.
Carbon Markets are Being Reformed, but ILPCs Are Still Not Called to Participate
The structure and operation of carbon markets are currently flawed and need new governance and regulations. In the voluntary carbon market, both IPLCs and economists remain skeptical about whether the price of carbon offsets actually reduces emissions. Analysis by the Carbon Pricing Leadership Coalition estimates that carbon prices between $50-$100 USD by 2030 are needed to reduce emissions to meet Paris Treaty Commitments. Currently, prices range from $1-$8 USD. In the compliance market, regulatory bodies struggle with measurement problems and detecting companies that exceed their permitted carbon emission limits. Carbon leakage in compliance markets also leads to companies relocating to avoid paying for their emissions.
IPLC leaders have also spoken out about the aforementioned structural issues of carbon markets and the marginalization of IPLC voices in addressing them. Upon his return from the UN negotiations on biodiversity in Montreal, the leader of the Mesoamerican Alliance of Peoples and Forests and IPLC farmer from Costa Rica, Levi Sucre Romera called out that the rules being developed to govern carbon markets have not included strong IPLC participation. He also discussed his experience with investors and brokers who deliberately undermined efforts for IPLCs to have ownership of any carbon credits generated on their land.
As the conversation about how to scale and regulate carbon markets continues, national governments and regulatory bodies must consider the rights, participation and support for indigenous-led climate initiatives:
- Future developments of carbon projects must respect the relationship between Indigenous Peoples and Local Communities and their land.
Informed consent is key prior to developing a carbon project on Indigenous Land. Before a project is carried out, IPLCs must be included in the development of impacts, risks, and benefits in these projects. In addition, carbon projects should not be developed on land where the rights of IPLCs are not formally recognized through land titles.
The Kasigau REDD+ projects in southern Kenya is one case where IPLCs were included and benefited from a carbon project that adequately recognized their contributions and rights. Community leaders of the region reported that dividends from the project supported the community at large and funded infrastructure for clean water and educational scholarships for students. Although Kaisagu is a positive example, this model cannot apply to all IPLCs even if revenue will be given back to the community; as not all projects are a good fit for community traditions, practices, rights, and self-determined goals.
- People living on the land impacted by Carbon Markets must be adequately and transparently compensated.
The price of carbon credits varies and can depend on impact, type of carbon credit (e.g., removal, avoidance, forestry, etc.), location, project tenure, and how it was certified. These factors are no excuse to justify inadequate compensation to IPLCs who make these projects possible.
In an effort to compensate IPLCs fairly, national laws should require a fair percentage of project profits to directly impacted communities and make provisions for payments if environmental harms occur. In addition, national governments and buyers should require that compensation agreements are publicly available.
Prioritizing Fair Participation
Before any policies shaping carbon markets are enacted, the international community should create opportunities for fair participation from IPLCs and treat them as partners in developing climate solutions. This should be the first step in continuing to operate both compliance and voluntary carbon projects, because of IPLCs’ long-standing relationship to nature and stewardship of forests that has already played a role in reducing carbon emissions worldwide.
