Carbon markets for the poor


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This week marks the beginning of a new round of international climate change negotiations – the Eighth Session of the Conference of the Parties – in New Delhi. During the last round in Marrakesh negotiators decided that countries could meet part of their commitments to reduce carbon emissions for 2008-2012 by financing afforestation and reforestation in developing countries. That is supposed to happen through the Kyoto Protocol’s Clean Development Mechanism (CDM). After 2012 other types of forestry activities such as conservation and reduced impact logging might also qualify as CDM projects.

"Forest Carbon and Local Livelihoods" by Joyotee Smith from CIFOR and Sara Scherr from Forest Trends looks at what this might mean for the rural poor. It examines the livelihood benefits and risks associated with large-scale forest plantations, small woodlots, agroforestry, forest regeneration, natural forest managed by communities, and strict protection. Each option poses benefits and risks, but in general the smaller-scale more community-based options offer greater benefits for rural livelihoods.

The authors show that small-scale forestry CDM projects are likely to have greater environmental benefits and less risk of "leakage" (i.e. encouraging carbon emissions outside project boundaries) than large-scale plantation projects. Small farmer and community CDM forestry projects appear viable from an economic perspective but they are likely to be more expensive than large-scale projects. That is because of the high cost of organizing and monitoring large numbers of small farmers and the lower productivity of their forestry activities. It means that if governments want small producers to benefit from the CDM they will have to take steps to ensure they can compete effectively with the larger players.

Specifically, the authors say that CDM project guidelines should require social impact assessments and consultations with local stakeholders to make sure that the CDM projects don’t make local people lose access to their forests or their land. The CDM guidelines need to make sure small farmer plantations, agroforestry, and forest regeneration activities qualify for support. Small-scale projects have to have simple reporting requirements. National governments can do their part by educating local people about the CDM, helping them to develop CDM projects and by making sure that they have secure ownership rights over their trees and forests.

As its name implies, the Clean Development Mechanism is supposed to promote development as well as help avoid climate change. This report shows how that can happen.

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Further reading

You can request an electronic copy in word or pdf formal from Nia Sabarniati at:

To send comments to the author you can write Joyotee Smith at: