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Emissions trading, carbon financing and indigenous peoples

Greenhouse gas abatement activities can have both beneficial and detrimental impacts on the communities in which they operate. For this reason, it is vital that Indigenous communities have accurate information about carbon financing and carbon market processes at the outset – to help them make informed decisions and choices about activities that work for them.

This is a guide intended for Indigenous land managers and those who work with Indigenous communities to the phenomenon of climate change, and to ‘market’ and financial mechanisms for reducing greenhouse gas emissions, often referred to as the ‘carbon market’, ‘emissions trading’ and/or ‘carbon financing’.

The guide begins by explaining what climate change is and outlines the international response to this problem. The second section describes the carbon market and the different activities that may generate ‘emissions reduction credits’ or ‘offsets’. It notes some points to think about when undertaking emissions reduction or offsetting activities. Among these are:

  • it is important to know the quantity of greenhouse gases already being emitted from a targeted activity, and to be able to continue measuring emissions from that activity after the project is implemented
  • there are a range of existing ‘methodologies’ for measuring the emissions that result from various daily and commercial activities. Often, assistance from a partner organisation with measuring emissions will itself be a part of the funded emissions reducing project
  • it is important to consider what wider impacts the project may have on the community and its environment, both good and bad, and to try to ascertain if the project will help the sustainable development of the community
  • it is important that all relevant stakeholders and community representatives are consulted during the planning of a project
  • an authorised third party may need to ‘verify’ and ‘certify’ the emissions reductions or offsets. Usually, the scheme or agreement under which the activity is taking place will designate who is entitled to carry out these procedures

The second section outlines the current situation regarding the international carbon market and opportunities for accessing carbon financing, before discussing the possible impacts of emissions reduction activities on Indigenous people. The final section provides short case studies of Indigenous engagement with greenhouse gas emissions reduction activities from Australia, New Zealand, Colombia, Panama, Kenya, Mexico and Canada.

A reference list is included at the end of the guide which lists additional sources of information by subject area.