The Flexible Mechanisms under the Kyoto Protocol

With the use of ‘flexible mechanisms’, the Kyoto Protocol established a market for greenhouse gas certificates – in short, a “carbon market” – with the objective of optimising greenhouse gas abatement costs. Emissions Trading (ET, defined in Art. 17) and project-based Joint Implementation (JI, defined in Art. 6) allow for the transfer of emissions allowances between industrialised countries. The Clean Development Mechanism (CDM, defined in Art. 12) allows industrialised countries to invest in abatement projects in developing countries in order to generate greenhouse gas certificates. These projects are intended to assist developing countries to achieve sustainable development and help industrialised countries to meet their commitments.

The Marrakech Accords define the rules for the implementation of the mechanisms. Among other things, countries have to demonstrate that their use of the mechanisms is “supplemental to domestic action” to achieve their Kyoto targets, and that JI and CDM projects are additional to what would have otherwise occurred. They can include activities to reduce greenhouse gas emissions and remove carbon. For the CDM, the latter is limited to a certain percentage of credits from afforestation or reforestation. Nuclear power is not eligible under the CDM, but there have been some recent suggestions to include such projects.

The CDM has given rise to considerable debate on equity and environmental integrity. There were, and still are, concerns about whether the CDM might undermine the Kyoto targets, as it allows parties to meet part of their obligations by investing in projects in countries that are not subject to a quantified Kyoto target. Therefore, it is crucial to ensure additionality, sustainability and the consent of the communities affected by the projects.

Due to discontent with the rules defined for the CDM, the independent “Gold Standard” has been introduced by NGOs in an attempt to ensure better quality carbon credits. Projects accredited under the Gold Standard have to meet additional requirements: they are confined to renewables and energy efficiency and must undergo a project screening with stricter criteria for additionality and sustainability, including stakeholder consultations.

Gender Dimension

A gender analysis of the Kyoto Mechanisms and their impacts is still to be undertaken. However, there are some general observations suggesting that the impacts of the carbon market on women are mainly negative.

Since women, both in developing and developed countries, are disproportionately affected by poverty, have less income and possess less wealth, they are more heavily impacted by economic instruments that lead to higher energy prices.

Benefits of current market-based financing mechanisms exclude the majority of the world's poor, and non-commercial sectors and applications. Women and men do not have equal access to property, money, funds and markets, and thus, women are less likely to benefit from CDM and JI projects.

Markets geared towards the reduction of greenhouse gas emissions tend to neglect other factors that constitute sustainable development, such as social justice, gender equality or poverty reduction.

Recent investigations, e.g. by the Oeko–Institut, have revived the concerns on the CDM. Flaws have been found in the validation and verification process, and in the demonstration of additionality. For many projects, it is questionable whether they will lead to sustainable development in the host countries.

In the chart, the current CDM portfolio is displayed in terms of credits and thus proceeds generated by the projects. The majority of projects are in the industry and the power sector, whereas there are only few small scale projects. Project types that are likely to benefit women, such as transport projects and energy efficiency projects in the domestic sector, make up a very small share of total projects, and, since they are typically small–scale, the proportion of credits generated from these projects is even smaller.

Some of the CDM projects are even reported to be harmful to local communities, including the women, such as landfill gas projects, that lead to the further operation of the landfill instead of closing it down.

Expected CDM credits (Certified Emissions Reductions – CERs) until 2012 by project categories. Data source: cdmpipeline.org

Recommendations

A gender analysis of market-based approaches is urgently needed, aiming to examine their effects on individuals and local communities.

The rules for the Kyoto Mechanisms, in particular for the CDM, need to be revised in order to better ensure additionality and sustainability, and to provide benefits for local communities. The Gold Standard should be promoted, and its requirements related to gender justice, participation and consultation of women should be strengthened.

Until a proper assessment about the impacts on women has been made, there should be a moratorium for additional market based solutions. On the other hand, non-market based financing schemes should be expanded and enhanced, along with a prioritisation of other policy instruments.