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Story Publication logo May 24, 2016

Climate Negotiators Focus on Carbon Credits, Underplay Human Rights


Image by Justin Catanoso. Italy, 2015.

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Wake Forest University law professor John Knox is the United Nations's special representative on climate change and human rights. He will be in Paris this week for the international climate summit. Image by Ken Bennett. North Carolina, 2015.

BONN, Germany – Finding a workable compromise that allows a long-lived UN program to both reduce carbon emissions while also protecting the lives and lands of indigenous and impoverished people in the developing world ought to be an achievable goal, says John Knox.

A Wake Forest University law professor, Knox is the United Nations special rapporteur on Human Rights and the Environment. He travels the Earth in search of climate-related problems and solutions that benefit indigenous people and the poor — a win for nature, a win for human rights.

Just prior to the UN climate conference now underway in Bonn, Germany, Knox proposed that a new component of the Paris Agreement that applies to the longstanding Clean Development Mechanism (CDM) be revised to incorporate both "strong social and environmental safeguards."

"The main problem with the Clean Development Mechanism has always been that it lacks effective safeguards to ensure that human rights are taken into account," Knox wrote as part of his 16-page report to the UN. "To ensure that the new mechanism does not repeat those mistakes, I have made a number of recommendations on social and environmental safeguards, including prior [CDM project] assessment, requirements of participation [by locally impacted people], and the establishment of effective grievance mechanisms, which would go a long way toward protecting human rights."

It all sounds so sensible. That is until you realize that CDM projects were established by the Kyoto Protocol as a way for wealthy industrialized countries to earn carbon-emission credits against their pollution caps by investing in clean energy or efficient energy projects in developing countries. Millions if not billions of dollars are at stake in CDM projects financed by the World Bank. It's not hard to imagine how these complex international business transactions might be slowed or even undermined by adding local human rights requirements into the future project mix.

Still, Knox recommends that populations affected by CDMs need to have the legal right to challenge, and even veto, projects that threaten their lives, livelihoods or land.

"It all comes down to the fact that these people are not allowed to participate in the decision-making process [for CDM projects that impact] territory they have occupied for millennia," Knox told Mongabay. "They not only want a say, they want a veto. And human rights law backs that up," as does the UN Charter which states that: "the United Nations shall promote universal respect for, and observance of, human rights… for all without distinction."

Since 2006, there have been more than 7,000 CDM-financed projects in more than 100 countries, with many in China and India financed by European Union nations. Projects include replacing old, polluting power plants with new, more efficient gas or coal-fired plants, or building dams for hydropower. CDM projects have also financed efficient cook stoves, methane reduction programs, waste incinerators and monoculture plantations.

The UN estimates that 1.6 billion tons of CO2 have been kept out of the atmosphere as a result of these projects.

But CDM projects are not as popular an investment as they once were due to a market failure to establish a consistent carbon price, and the inability to develop a reliable market for carbon trading. In CDM's heyday between 2008 and 2012, according to UN sources, carbon was valued at around $20 per unit. That valuation has now fallen to less than $1 per unit, causing wealthy nations to be less likely to support CDM projects.

Today the supply of proposed developing world projects far exceeds developed world's carbon trading demand.

CDM, as a result, is seen as a once useful but now waning tool for reducing greenhouse gas emissions. And it may play a lesser role in achieving the Paris Agreement goal of holding global temperature increases to 1.5 degree Celsius over preindustrial levels by 2100.

Most negotiators at this month's Bonn climate conference showed little interest in discussing, no less implementing, Knox's human rights recommendations, which they believe would possibly result in making a glut of CDM projects even less attractive to industrialized nations.

"New mechanisms need to create hope for project participants, and confidence and inspiration in all investors," asserted Eduardo Calvo of Peru, the CDM executive director for 2016. "There is a double mission for two countries to benefit." So saying, he sent the overriding message that prospective CDM projects should be the concern of negotiating nations — not local populations.

Calvo's remarks came during a packed CDM working session in Bonn. Virtually all talk during the 90-minute meeting was about the price of carbon, the declining demand for CDM investments, and the complexity of carbon accounting and finance tools. Human rights considerations achieved a brief mention by one of five panelists.

After the session, I pressed Calvo on Knox's recommendation, but he sidestepped the questions.

"It's not up to us to decide," he said of his CDM executive board. "It's up to the national delegations to discuss such matters. We can seek a consensus, but it will be up to individual nations to decide [whether or not to mandate human rights considerations in CDM projects]."

I also spoke with a Scandinavian official and former CDM executive board member about the issue. He declined to be named but wanted to share his insight. He told me flat out that in more than 7,000 projects, he could think of only two with human rights violations.

The perception among CDM critics is that human rights violations are a big problem with many projects, he said, but that's not the case. He insisted that his country vets its CDM investments closely and stays away from projects that may violate human rights. He said most wealthy countries do the same.

"That's bullshit!" responded Juliane Voight, a policy researcher with Carbon Market Watch in Belgium. Like Knox, she travels the world documenting human rights infringements that result from CDM investments.

Carbon Market Watch has compiled a list of harmful CDM projects. Among them are large hydropower projects including Barro Blanco in Panama and Santa Rita in Guatemala, which they say negatively impacted indigenous and/or local populations who were given no voice in the projects. The NGO also questions the wisdom of a UN mechanism that provides carbon credits for investments in new, more efficient coal burning power plants, thus adding to fossil fuel emissions for decades to come.

Voight also described a project she visited in Sasan, India "as one of the worst CDM projects ever." It entailed the construction and operation of a coal-fired power plant.

"It was just really sad to see," she said during a Mongabay interview in Bonn. "This was a project implemented under the United Nations. The people didn't want it. They were pushed from their homes by bulldozers. When they protested, they were beaten by police."

Voight does agree, however, that most CDM projects function well and without human rights violations. Wealthy countries provide funds for green or efficient energy projects that poor countries cannot afford, less CO2 is emitted, and wealthy nations receive carbon credits for their investments.

But the notion that virtually no problems exist, Voight added, and that human rights should be left to local jurisdictions or investors to decide is a serious mistake.

"Indigenous groups tend to be among the most marginalized people in the world," Knox concurred. "They have no political power. Yet these projects tend to entail immense amounts of money. And the people in power will often stop at nothing to get what they want."

"The Paris Agreement is going to be in place well into the foreseeable future," he added. "Decisions made now will have really important and lasting consequences."

At Carbon Market Watch, Voight vowed: "We will follow the negotiations closely and make as much noise as possible to make sure this new mechanism is fair to all the people involved."


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