Will carbon markets repeat the mistakes of the past?

An article by Erika Lennon, Senior Attorney at the Center for International Environmental Law (CIEL)


Erika Lennon

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Fifty kilometers from the original UN Climate Conference venue in Santiago, Chile, a run-of-river hydro project is being constructed on the Maipo River, which provides water to seven million people. In the name of “clean energy,” the Alto Maipo hydroelectric project is blasting tunnels through the Andes, creating fissures in the glaciers, and polluting local communities with dust, light, and noise. And the project is undermining the livelihoods of the people living in the Cajon del Maipo, and threatening their rights to food, water, and cultural heritage.

But despite these demonstrably negative impacts, the Alto Maipo project is registered under the Clean Development Mechanism (CDM) of the Kyoto Protocol, providing it with a kind of green seal of approval and once finished, would earn Chile carbon credits. The CDM is a carbon market mechanism, which allows countries to use markets to buy carbon credits instead of cutting their own emissions. This week at the UN Climate Conference (COP25) in Madrid, as world governments are deciding on the rules for new carbon markets, they should be learning from past mistakes, of which Alto Maipo is just one of many. However, progress in the negotiations thus far suggests governments are on a path to create a new set of rules that repeat the same fatal flaws.

This past week, however, saw an uptick in the number of countries that are supporting the inclusion of human rights protections in the rules and guidelines for how to implement carbon markets under the Paris Agreement (also known as Article 6). Nonetheless, any references to these protections in current drafts of the rules are conspicuously absent. That’s why organizations like the Center for International Environmental Law (CIEL) and others are advocating that if carbon markets are going to exist, they must contain three central elements. First, there must be strong social and environmental safeguards to prevent harm to local communities and the environment. Second, there must be a requirement for meaningful consultation with local communities throughout the entirety of activity design, and if it might impact indigenous peoples, it must obtain their free, prior, and informed consent. Lastly, it must provide access to remedy in cases of harm in the form of an independent grievance mechanism.

Copyrights: Amanda Kistler/CIEL

As Marcela Mella, a community member who’s been defending the Maipo River Valley from the damaging impacts of the Alto Maipo project warned, “We have lived the devastating impacts of carbon markets in Chile. If Article 6 fails to substantively protect human rights and environmental integrity, it would condemn other communities to suffer harmful impacts similar to those that we have endured as a result of the CDM-registered Alto Maipo project.”

Thus, though there is great pressure on governments to deliver rules on Article 6 by the end of the week, advocates insist that adopting no rules in Madrid are better than adopting bad rules. Experience with the  Clean Development Mechanism shows that the rules for any new market mechanisms will endure — unchanged — for decades, and when those rules do not adequately safeguard human rights and the environment, the damages can be significant — for people and planet.

An article by Erika Lennon, Senior Attorney at the Center for International Environmental Law (CIEL)

Copyrights main image: Coordinadora Ciudadana No Alto Maipo