By Irene Ojuok and Alan Channer
Carbon finance is big business. To name a few, Microsoft, Netflix, Volkswagen, Shell and AstraZeneca invest in carbon finance for land restoration and protection. Schemes to reduce deforestation and degradation emissions or to sequester carbon in vegetation and soil are burgeoning across Africa. How well these schemes are working – and for whom – is controversial.
Carbon finance is an instrument used to incentivise the reduction of atmospheric CO2 by transferring funds from those emitting it to those increasing or preserving carbon sinks or reducing emissions. Many of these carbon sinks are on land, which is the source of livelihood for smallholders – those with less than 2 hectares – who make up 80% of Africa’s farmers and cultivate around 40% of the continent’s agricultural land. About two-thirds of this land is degraded. When carbon finance emerged on the scene, it was hailed as a quadruple win: land would be restored, farmers’ incomes would increase, carbon would be sequestered, and the companies providing the finance could race to net zero.
Beyond the Margins: Engaging Under-represented Voices
It has not been so simple. The requirements of projects which trade carbon in the voluntary carbon market are complex and demanding. The first essential requirement is permanence – carbon must stay sequestered for at least thirty years. The second is additionality – carbon sequestered by a project needs to be in addition to what would have been sequestered without the project. The third key requirement is non-leakage – sequestering carbon in one location should not cause increased emissions in another. For example, when trees are conserved in one place, this can induce pressure to fell them elsewhere.
Farmers must agree to all the conditions of a carbon project in a contract signed with ‘free, prior and informed consent’. Unexpected challenges have occurred, including, in some circumstances, the prospect of triggering conflicts.
Legal ownership of land is a prerequisite for participation in carbon projects. However, many African communities lack legal proof of ownership of the land they live and farm on. Further, African customary and hereditary systems are communal and suppress individual tenure. Land and tree use disputes can ensue when title deeds and long-term leases are introduced since contractual requirements can disrupt traditional land use and settlement patterns and interfere with cultural practices. If legal requirements are not sensitively introduced and discussed, they can incite conflicts within families and communities. Since most African women smallholders have never owned ancestral land (despite typically spending more time tending it), approval for carbon projects invariably goes to male heads of households. The prospect of widening gender inequalities is significant. Furthermore, the question of inheritance also arises. Youth are often not consulted, even though within the 30-year life of a project, their rights to use their ancestral land will be profoundly affected.
Skewed Standards: Selection Bias of Carbon Developers
In addition to these challenges, many carbon project developers are naturally inclined to select landholders with formal title deeds. Further, the transaction costs of negotiating with multiple smallholders can incline developers to choose those with larger landholdings. In addition, since more carbon is sequestered where tree growth is better – where rainfall is higher, and soils are more fertile – developers tend to avoid low-potential agricultural areas where more restoration investments are required. All these factors tend to favour the selection of farmers who are already better off and agricultural regions free of insecurity and already productive, potentially exacerbating inequalities and fomenting discontent among marginalised communities. At the end of the spectrum, developers can buy out or evict local communities from land dedicated to carbon sequestration.
Farmers tend to be selected by carbon projects which are already better off and within agricultural regions free of insecurity and already productive, potentially exacerbating inequalities and fomenting discontent among marginalised communities.
Carbon projects can also cause tensions once they are underway. For example, there is an optimal density of trees on land to maximise sequestration and not reduce crop or pasture yields. Pressure on land for food security will only intensify over time, as will the demand for wood. It would be advantageous if Africa could produce sufficient wood for its needs. Households that commit extensive land and trees for carbon sequestration may find, ten years later, that they have compromised other land-based livelihood options, and conflicts are, therefore, likely to ensue within and between communities.
Farmers often lack the technical know-how and resources to argue their case in delivering carbon credit projects. Weak community governance and institutional frameworks in rural Africa can result in a lack of equity and transparency in project agreements. Many projects struggle to establish fair and sustainable benefit-sharing agreements. These difficulties are exacerbated by the transient engagement of implementing local organisations and INGOs, which often only stay for five years.
Carbon finance programmes can involve commodifying natural ecosystems and impinging on rural livelihoods in new ways. Considerable learning and attitudinal change need to happen to ensure that programmes work for the benefit of all. It is essential to view farmers as co-investors and co-designers of these programmes and to take account of social norms and indigenous knowledge in the design of the whole project. Building such collaboration requires transparency, equity and trust. It takes effort, but ultimately, it will de-risk carbon finance programmes.
Geneva’s Goal: Amplifying a Conflict-Sensitive Approach
There are some positive signs. Some investors and project developers now require socio-economic and socio-cultural feasibility studies, including the assessment of conflict risks, before commencing. There is an increasing awareness that conflict-sensitive approaches need to be integrated into carbon programmes for holistic and sustainable land restoration by smallholders.
Geneva needs to foster an increasing awareness that conflict-sensitive approaches need to be integrated into carbon programmes for holistic and sustainable land restoration by smallholders.
With its juxtaposition of peacebuilding, human rights, sustainable development, conservation, and financial institutions, Geneva can play an important role in fostering sustainable and equitable carbon finance initiatives. Successfully restoring land while equitably raising African smallholder farmers’ living standards is also an investment in peace and security.
Geneva can help give voice to the needs of African rural communities in their interactions with powerful corporate interests. It can highlight conflict-sensitive programming, gender mainstreaming, participatory project design processes, equitable benefit-sharing mechanisms and investment de-risking. It can help strengthen and broaden the scope of the ethical standards proposed by the Integrity Council of the Voluntary Carbon Markets.
By furthering these recommendations, the Geneva community can improve the lives of rural African communities while supporting global climate goals.
About the Authors
Irene Ojuok is a doctoral researcher at Right Livelihood College, Centre for Development Research, University of Bonn, and a practitioner in community-led land restoration.
Dr Alan Channer is a consultant on the nexus between peacebuilding, environmental restoration, and climate change and a Senior Fellow at the Global Evergreening Alliance.
The opinions expressed in this publication are those of the authors. They do not purport to reflect the opinions or views of the Geneva Policy Outlook or its partner organisations.
