Market Access Workshop - Honduras September 2011. IDLO presentation on carbon markets

1. Access to Carbon Markets in the new Green Economy: Public laws for small & medium private producers Prof. Marie-Claire Cordonier Segger, MEM (Yale), BCL & LLB (McGill), BA Hons Director, Centre for International Sustainable Development Law (CISDL); Manager, IDLO Sustainable Development Law Programs; Visiting Professor, Faculty of Law University of Chile & Affiliated Fellow, LCIL Cambridge University mcordonier@idlo.int / www.idlo.int

3. Opening Carbon Markets for a Global & Local Green Economy

4. Green Economy must support Rural Development The rural poor depend the most on and are most vulnerable to ecosystem services for income, subsistence and future resilience Healthy ecosystems are critical to natural capital that generates economic activity for well-being (agriculture, aquaculture, forestry, climate system) The poor have few means to cope with and face disproportionate losses from the depletion of natural capital Many ecosystems are nearing critical thresholds beyond which their services to the poor are drastically reduced (coastal ‘dead zones,’ deserts, depleted soils) (TEEB: The Economics of Ecosystems & Biodiversity, 2010)

5. Rural Development through Participation in the Green Economy Direct benefits More employment New low-carbon products Stimulated existing sectors Local/national/international investment Small business development Sustainable energy, water and sanitation Indirect benefits Infrastructure development Local/national capacity building Resilience to natural disasters Meeting international commitments (UNFCCC, T&I Treaties...) 2% GDP Green Investment Scenario v BAU (UNEP Green Economy Report, 2011)

7. EU-Central America Association Agreement (SMEs, organic goods, carbon markets); CA-USA-RepublicaDominicana FTA, CA-Panama FTA, Mexico-Nicaragua FTA, Mexico-Honduras-El Salvador-Guatemala FTA, Canada-Costa Rica FTA, CA-Chile FTA, Panama-Singapore FTA, El Salvador - Taiwan FTA (diverse commitments to support sustainable development & SMEs) … Upcoming Rio + 20 UN Conference on Sustainable Development will focus on green economy in context of poverty reduction & sustainable development

8. Overcoming Legal Barriers to Carbon Markets

9. Growing Regional and Voluntary Carbon Markets In the past 5 years, international, regional, domestic and voluntary carbon markets have grown from: USD 11 billion to 141.9 billion (Carbon Finance at the World Bank, 2011)

10. Many Laws are Important – Not All are Clear Business registration and rules Taxation laws Subsidy policies Anti-corruption laws Financial planning, reporting and auditing laws Trade and investment laws Intellectual property laws Land use planning regulations Protected areas laws Payment for ecosystem services, community-based natural resource management and participatory forest management regulations Environmental and natural resource management laws Energy and electricity laws Agriculture laws Transportation policies Easement and acquisition provisions Building codes Water management laws Land tenure laws Forestry laws Biodiversity protection policies Human, indigenous and gender rights guarantees Constitutional laws

11. Legal barriers to access carbon markets: Clear Property rights Green investments can support poverty eradication & sustainable development, and laws can help with: Equitable and secure land tenure Clear guarantees for small & medium scale carbon owners Simple clear contracts for benefit sharing Reliable rules for insurance Straight rules for small land owners to associate & participate

12. Legal barriers to access carbon markets: Small & medium laws for SMEs Micro to medium sized enterprises may not gain access to open market opportunities, and laws can help with: Clear and affordable business registration Economic incentives for credit advances or capital start-up costs Elimination of perverse subsidies to competing “brown” businesses Guidelines for the transfer and sale of assets Corporate liability protection for owners and investors

13. Public – Private Dialogue & Participation for Green Economy

15. There is a need for meaningful participation of SMEs and rural producers in the opportunities ofthe global green economy,especially carbon markets (CDM, REDD+, NAMAs).

16. Changes may be needed to public laws and policies. Successes can be shared, legal and governance barriers can be identified, reforms can be recommended, training and technical assistance can be provided, and solutions can be tailored for each sector / community.

18. Annexes

19. Carbon credits (CERs) represent the difference between the baseline and actual emissions Greenhouse gas emissions Project start Historical Trend Time Generating carbon credits through REDD+ activities Source: UNDP 2010

20. Aid targeted at biodiversity, USD million (OECD, Rio Markers 2011)

21. Trends in public and private green instruments REDD+ activities will be eligible for support under new international finance mechanisms Renewable energy feed-in tariffs and other power purchasing agreements are being implemented across North America, Europe and Africa Carbon markets have gained traction in developing economies such as Brazil, China, India and Mexico with worldwide growth from USD 11 to 141.9 billion in 5 years Technology development and transfer to developing countries is supported by Japanese and Chinese initiatives Global market for eco-labeled fish products grew by over 50% in 2008-2009 Ecotourism is the fastest growing area of the industry with an estimated increase in global spending of 20% annually

23. Practical example:Rising organic production and processing Organically managed lands reached 35 million hectares in 2010 with the highest number of producers in Latin America, Africa and Asia and revenues of USD 50.9 billion

24. Legal barriers to accessing green instruments: Access to justice Inaccessible institutions can lead to corruption, exploitation and administrative barriers without: Free, prior and informed consent (FPIC) Stakeholder decision-making procedures Rules for participatory project implementation Clear and affordable rights of recourse Culturally sensitive and customary justice systems Targeted legal training of officials, the judiciary and administrative tribunals

25. Legal barriers to access carbon markets: Fair employment rules for the poor Increased employment from new economic activity may not create fair and equitable labour, clear laws can help with: Fair negotiation of contracts Guarantees for decent wages Guidelines for safe working conditions Freedom of association & cooperatives Compensation for workplace injuries

26. LPPCI Methodology

28. IDLO Strategic Plan 2009-2012

30. The LPGE is a unique methodology that systematically identifies legal and governance barriers, makes recommendations, provides legal and regulatory training and technical assistance, and implements consensus-based solutions tailored uniquely for each recipient country in order to access international green economy markets.What

31. Overcoming legal barriers to the green economy Research on common barriers and legal best practices Context specific impact assessments to identify legal and institutional barriers between green economy benefits and poverty alleviation Consultation with stakeholders to build consensus on desired benefits Revision of finance instruments to ensure: access to justice, and property, labour and business rights Country-driven legal and institutional reforms to national, subnational and local regulatory frameworks Capacity building for ongoing domestic reforms How

32. But a few IDLO programs... NationalLegal Preparedness for Climate Change and REDD+programs in countries such as Zambia, Vietnam, Mexico, Colombia, Ecuador with partners such as IFAD, CDKN, FAO and UN-REDD Training workshops to the Zambian Development Agency on green growth through legal incentives for international carbon investments Land titling legislation, REDD+ and customary lawresearch and legal training workshops on reform processes for communities in Uganda, Benin, Burkina Faso, Senegal, Liberia, Mozambique, Rwanda, Madagascar and Indonesia Legal training in selected communities in Kenya on rights to protect traditional knowledge through community-based mechanismsthat enable them to set legal conditions to share knowledge with non-traditional users on questions of biological diversity and REDD+ Rural microfinance legal capacity analysis and training programsfor low-emission sustainable food production and labeling in communities in Ecuador and Uganda with partners such as the Government of Italy