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Market-based mechanisms

Copyright under Creative Commons by Allan Watkin

A detailed gender analysis of the Kyoto Mechanisms and their impacts is yet to be conducted. However, there are some general observations suggesting that the social impacts of carbon markets are largely negative, particularly for women.

Economic instruments that lead to higher energy prices more heavily impact low-income users. They also serve to further disadvantage those who are already marginalised in economic and public life. Both in developing and developed countries, women are disproportionately affected by poverty and female headed households, in particular, have fewer assets and more limited access to resources. Furthermore, the benefits of current market-based financing mechanisms exclude the majority of the world's poor, and the non-commercial sector. As women and men do not have equal access to property, money, funds and markets, women are less likely to benefit from CDM and JI projects.

The vast majority of mechanisms have so far focused on industry and the power sector, with few small scale projects conducted. Project types that are likely to have some benefit for women, such as transport projects and energy efficiency projects in the domestic sector, only make up a very small share. Since these projects are typically small-scale, the proportion of credits generated is modest, making them less attractive.

On the whole, private funds, investments and markets are driven by the goal of larger returns, and thus invariably favour measures, programs and projects that may (or may not) result in high emissions reductions, but which fail to create long-term, sustainable benefits for people, often prioritize profit over human rights, and threaten to harm local communities and their livelihoods where women in particular are most negatively affected.


Gender dimensions

A detailed gender analysis of the Kyoto Mechanisms and their impacts is yet to be conducted. However, there are some general observations suggesting that the social impacts of carbon markets are largely negative, particularly for women.

Economic instruments that lead to higher energy prices more heavily impact low-income users. They also serve to further disadvantage those who are already marginalised in economic and public life. Both in developing and developed countries, women are disproportionately affected by poverty and female headed households, in particular, have fewer assets and more limited access to resources.

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

The vast majority have so far been in industry and the power sector, with few small scale projects conducted. Project types that are likely to have some benefit for women, such as transport projects and energy efficiency projects in the domestic sector, only make up a very small share. Since these projects are typically small-scale, the proportion of credits generated is modest, making them less attractive.

On a whole, private funds, investments and markets are driven by the goal of larger returns, and thus invariably favour measures, programs and projects that may (or may not) result in high emissions reductions, but which fail to create long-term, sustainable benefits for people, often prioritize profit over human rights, and threaten to harm local communities and their livelihoods where women in particular are most negatively affected.


Recommendations

A number of studies already reveal the harmful social impacts of market-based approaches, yet a detailed consideration of gender dimensions is still lacking. The rules for existing mechanisms, in particular for the CDM, should be revised in order to better ensure additionality and sustainability.

Reforms of the CDM process need to ensure that this policy framework is developed to include a robust public participation process throughout the implementation of CDM projects, a grievance mechanism to address potential adverse impacts, and a safeguard system that includes ‘do not harm’ assessment and the monitoring of sustainable development benefits.

Furthermore, there is strong reason to push for market based mechanisms not to be included in the new climate agreement, particularly in relation to the land sector. Instead, non-market based financing schemes should be expanded and enhanced, along with a prioritisation of other policy instruments.