Cop29: Indigenous communities still being sold short as the world decides how to regulate carbon markets

As the annual UN climate conference, Cop29, draws to a close, negotiators, civil society observers and activists are staying up late, poring over draft texts that will determine how the international community addresses climate change for years to come. Central among their concerns this year: the turbulent world of carbon markets. This, in theory, will allow carbon removals, renewable energy units and greenhouse gas emissions reductions and avoidance to be bought and sold as “credits”.

Much of the negotiation that we’ve witnessed here in Baku has revolved around two particular paragraphs in article 6 of the Paris agreement. This body of text mandates the creation of market mechanisms meant to raise climate ambition but the UN has failed to implement this for nearly a decade. Now, nations are nearing agreement on how to navigate this contested section of the world’s most important climate agreement.

The text of the Paris agreement outlined a vague plan for nations to pay for international emissions reductions projects that would “count” against their national climate targets. Even though the rules governing these credits are still under debate, 85% of countries have indicated that they plan to use these mechanisms to meet their climate commitments.

At stake is whether the rules governing this system would create truly high-integrity credits, or whether it would yield the same sort of bogus claims that flourished under previous carbon offset programmes.

Getting these rules right is crucial to limiting warming to 1.5°C, and to protecting the rights of local communities and Indigenous peoples whose livelihoods and lands are often enlisted in offset projects. Human rights abuses, including illegal land grabs, displacement, and even violent attacks on residents have been well documented.

So-called “carbon cowboys”, have turned up across the Amazon with sheets of paper to sign, promising money and development but sometimes leaving a trail of damage in their wake. “They are trying to pay us for all the misery,” says Alessandra Korap Munduruku, an Indigenous rights campaigner in Brazil. She highlights the strange reality of being approached by projects claiming they want to help them protect their lands which are producing credits sold to the industries responsible for it’s destruction, asking: “How can they want us to accept carbon credits if I can no longer teach my grandson ancestral and territorial knowledge?”

Since the late 20th century, countries and companies have tried to monetise – and trade – emissions reductions. The predecessor to the Paris agreement, the 1997 Kyoto protocol, created a system for richer nations to pay for emissions reduction and related projects in poorer countries. Around the same time, private companies realised that individuals and corporations would also be willing to pay to “offset” their carbon pollution. In a matter of years, these sorts of carbon markets became mainstream.

Thousands of offset projects were registered across the globe, but the rules governing these systems were lax. In study after study, scientists found rampant dishonesty and overcalculation of credits.

In most cases, projects were based on improbable assumptions, overestimations and mathematical gymnastics. In some more egregious instances, projects were blatantly fraudulent – such as when credits were sold based on a promise not to cut down trees when the forests in question had already been legally protected years ago.

Scientists have now established that most carbon credits that have been issued to date are most likely phoney and do not represent real emissions reductions. A study published on November 14 surveyed credits representing almost 1 billion tonnes of CO₂ and found that less than 16% constituted real emissions reductions.

A rocky road

Given this fraught history, observers were stunned when this year’s UN climate conference opened with a shocking announcement: core guidelines for what these type of projects could consist of were passed in the summit’s early hours.

This was a massive departure from UN protocol. It was only the second time in 30 years of climate conferences that a major decision had been announced so early on.

The business community celebrated. Impromptu drinks events circulated on WhatsApp. But in the next few days, negotiation rooms showed a very different picture. Many negotiating parties lamented the lack of transparency of this process and voiced concerns about a precedent being set for the negotiation process being bypassed.

In any event, the “breakthrough” may have raised as many questions as it answered. Now, parties are deadlocked on issues ranging from how to ensure that these new systems don’t repeat the failures of their predecessors.

At first glance, there have been signs of progress. For example, the new rules contain a detailed mechanism meant to safeguard local communities as well as an independent grievance protocol — elements hard-won by Indigenous peoples, civil society and observers. But further scrutiny shows that these tools are simply desk-based “tick-box” exercises.

What’s more, the expert group tasked with enforcing the mechanism can only provide recommendations – not actual enforcement. The system is “basically a name-and-shame opportunity,” says Kelsey Alford-Jones, a researcher at University of California, Berkeley, stressing the lack of boots on the ground and provision of real solutions to minimise risks or deal with failures.

From our own research on carbon credit projects in the Brazilian Amazon, it is hard to imagine how a community could brave threats of violence to hire a lawyer, gather documentation and fill in a complex grievance form in English. This is a classic example of an “implementation gap”: the challenge of translating paper regulations into the on-the-ground realities of projects.

Souparna Lahiri, an expert on carbon markets with the conservation organisation Global Forest Coalition, told us this week that “carbon market architecture is beyond repair. It has its own dynamics and you cannot fix it.” Lahiri’s view is at one end of a long spectrum of perspectives. At the other end are industry voices, who insist that the market suffers from “a few bad apples,” rather than fundamental shortcomings.

Whatever your opinion about the feasibility of high-integrity carbon credits, this much is clear: the proposed text is unlikely to fully resolve the deep-seated problems that have plagued carbon markets since their inception in the 20th century.

While it’s certainly possible for countries committed to ambitious climate action to develop these projects with high levels of integrity, recent history has shown that even the best intentions are no guarantee of success. It will take time, resources, patience and – importantly – not the sort of “chomping at the bit” enthusiasm that is common in industry. Crucially, buyers must stay alert to make sure they only buy high-integrity projects.

If these projects continue a terrible legacy of human rights abuses, and if many of the credits issued do not represent real reductions, then the legacy of this Cop29 could be to undermine the entire Paris agreement.

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The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.