Securing Indigenous Peoples and Local Communities’ Land Rights in the Voluntary Carbon Market
Key Considerations and Actions
A Global Land Alliance Policy Brief by Gabriela Rodrigues Eklund, Malcolm Childress and Grenville Barnes
Limiting global warming to below 2°C above pre-industrial levels[1] and containing its already devastating effects requires an unprecedented collective effort to:
Reduce greenhouse gas (GHG) emissions and remove GHG from the atmosphere (mitigation actions)
Increase the resilience of peoples and places to climate change (adaptation actions).
While these ‘climate actions’ involve activities and expertise in multiple sectors[2],their success depends on advancing the underlying land tenure security agenda: Ensuring local people and communities have control, access, and security to their land, property and housing is necessary to ensure climate action is legal, environmentally sustainable, socially just, economically viable, and implementable (see box 1).
This is especially urgent when it comes to the land rights (see box) of Indigenous Peoples (IPs) and to those of local communities (LCs) [3] in the nature-based markets, in particular in the Voluntary Carbon Market (VCM). Estimates show that IPs and LCs customarily hold and manage least half of world’s land[4]. Tenure security underpins their ability to make decisions, adapt and sustainably manage natural resources and is today considered pivotal in the fight against climate change[5]. Paradoxically, IPs and LCs land rights have come under increased threat through the VCM.
GLA believes it is crucial to collectively advance thinking, dialogue, and action on the role of land rights and tenure security to make the VCM and other nature-based markets equitable, efficient and sustainable. In the following sections of this brief, we set out some key considerations and propose concrete actions to make the VCM work for IPs and LCs, the carbon market and the global climate agenda. While we focus especially on addressing the threat represented by individual carbon projects present in the VCM, several considerations in this brief also apply to Jurisdictional REDD projects and to nature-based markets in general.
1. TENURE SECURITY OF IP&LCs IS KEY FOR CLIMATE ACTION AND INVESTMENTs
There is clear evidence and broad agreement that recognizing the land rights of forest communities is essential and a cost-efficient strategy for protecting tropical forests and reducing emissions from deforestation and forest degradation (REDD+). IPs and LCs were estimated to manage at least 22% of the forest carbon in 52 tropical countries[6] . They hold and manage a third of Key Biodiversity Areas[7]. IPs alone hold over a third of “intact forest landscapes.”[8] They derive their livelihoods from these ecosystems, and their culture and identity are inseparable from the land and its natural elements. This means that securing IPs and LCs tenure is a matter of cultural survival and an imperative for justice. Also, that they have a fundamental drive to protect their land and serve as stewards of their environment.
Furthermore, IPs and LCs have a set of rights that climate investments must comply with, including:
Box 2: Importance of Forests
Tropical forests store the largest part of global terrestrial carbon[1], play an important role in local-to-global water cycles, and sustain great levels of biodiversity. Tropical deforestation is occurring at a rate of 4 million hectares per year - an area equivalent to Denmark[2], and is the main source of GHG emissions from Africa, Latin America and South East Asia[3]. It threatens the existence of forest peoples and cultures, and tropical forest species and, in the process impacts the local, regional, and global climate and socio-ecological systems in harmful and unpredictable ways.
1Together with boreal forests.
2 Annual average tropical primary forest loss for 2002-2022, according to GFW’s definition and methodology.https://www.globalforestwatch.org/blog/insights/global-tree-cover-loss-data-2022/
3 Lamb et al. 2021 https://doi.org/10.1088/1748-9326/abee4e
Internationally recognized rights to land and natural resources;[9]
The right to provide or withdraw their Free Prior and Informed Consent (FPIC[10]);
Statutory rights within the national legal framework, and;
Applicable environmental and social standards.
Hence, investors must fully consider the following:
Rights must be considered from the start: tropical forests cannot be targeted for climate action without first understanding and honoring the land rights and governance systems of IPs and LCs;
Climate action should include actions and sustained financing to secure the land rights of IPs and LCs and protect their territories, and;
Climate investments should support communities and populations to be frontline actors, leaders and beneficiaries of climate action.
Box 3: The Voluntary Carbon Market (VCM)
The VCM[1] is a global market where polluters purchase certified carbon credits to meet self-imposed GHG emissions reduction targets[2]. It has grown significantly since the signing of the Kyoto Protocol in 1997[3]. The total value traded peaked at US$ 2 billion in 2021, and could reach an estimated US$ 250 billion by 2030 and US$1.5 trillion by 2050[4]. The market suffered a crisis in 2023 as projects came under scrutiny, but average prices remained higher than in 2021 and demand is concentrating around pricier, high-quality credits[5]. Overall, a steady increase in private finance is needed to fill the financing gap for climate action[6].An international taskforce was formed to facilitate the VCM expansion in particular
[1] See The Voluntary Carbon Market Explained, a useful introduction on the VCM
[2] One carbon credit is equivalent to the mitigation of 1 ton of CO2 emissions.
[3] On the other hand, the global compliance market, where carbon credits can be exchanged to meet compulsory targets has been slow to develop. Other compliance markets exist but are specific to certain regions or sectors.
[4] https://www.sylvera.com/resources/the-state-of-carbon-credits-report
[5] Forest Trends’ Ecosystem Marketplace 2023, 2024,The State of the VCM https://www.ecosystemmarketplace.com/publications/.
[6] OECD 2023. https://doi.org/10.1787/e20d2bc7-en
2. THE VCM IS NOT BENEFITING IP&LC
In principle, the VCM could serve as a major financing mechanism for securing IPs and LCs tenure and sustaining IPs and LCs-driven climate action via the payment of IPs and LCs to reduce carbon emissions.
Unfortunately, many projects are instead negatively affecting IPs and LCs, and the VCM market has been fueling a new wave of land-grabbing. Reports, and IPs and LCs themselves, have been pointing to land rights violations, forced resettlement, human rights violations, and insufficient FPIC and benefit-sharing mechanisms[11],[12]. These infringements fundamentally challenge the legality of some carbon investments, the permanence of emissions reductions, and the integrity of emission reductions claims and should hence be the primary concern of actors in the certification supply chain (see box 4).
Further, the expected and necessary increase in the scale and speed of climate investments will likely accelerate land grabbing unless the underlying impediments to responsible carbon investments are fully and well understood and addressed by multiple stakeholders.
3. MULTIPLE iMPEDIMENTS tO rESPONSIBLE cARBON INVESTMENTS
3.1 GOVERNMENTS: LIMITED STATUTORY RECOGNITION AND WEAK LAND GOVERNANCE
To be legally secure and enforceable, land rights need to be recognized in legislation, registered, documented and publicized. All the latter requires legislation and strong land governance and administration, i.e., “rights from the start” of the VCM value chain. Yet these rights are still lagging behind in most tropical forest countries.
The lack of, or insufficient recognition of rights in legal frameworks. Latin America and Africa are making progress on recognizing IPs and LCs land rights[13].. However, IPs and LCs are the recognized legal owners of only 11% of the world’s land, despite being the customary holders of about 50 percent.[14]
IPs and LCs carbon rights are rarely explicitly recognized. They are most often subject to interpretation, leaving them vulnerable to grabbing by state and other actors[15]. Moreover, carbon transactions remain largely unregulated, and few countries have designed effective benefit-sharing mechanisms.[16] Carbon presents a challenge to conventional property systems: it defies our conventional categorization of property into “immovable” and “movable” property; and it has a ubiquitous nature (it is in the sub-soil, in above-ground biomass, the ocean, and the atmosphere).
The lack of or incomplete formal documentation is often erroneously interpreted as a lack of rights. Conversely, land documents may be questionable evidence of rights if they are not formally registered in the public land registry, do not reflect the formal name of the community, or contain a dubious description of the community land boundaries. To address these gaps, IPs and LCs have been mapping their land rights on their own with help from specialized organizations;[17] however in many cases these maps are not officially recognized.
Competing claims or irregular documentation. We often consider legal documents, such as titles or private concessions, as absolute proof of rights, but they may be entirely illegal or contain irregular processes or overlapping claims.
Lack of or difficult access to information. Many countries in the Global South lack a complete, integrated, and transparent land cadaster and registry. Even when land rights have been recognized and documented, legal information is not always accessible or easily discoverable, which makes the due diligence of land tenure a challenging task. Important efforts are underway to facilitate access to accurate information[18].
3.2 VCM: WEAK REQUIREMENTS AND DUE DILIGENCE, AND DEFICIENT VALUE CHAIN
Insufficient or equivocal requirements. Originally carbon standards focused mainly on carbon accounting and environmental aspects of projects. They have evolved to include social, land tenure and FPIC requirements[19]. An important initiative by the Integrity Council for the Voluntary Carbon Market (IC VCM) is underway, practically requiring that standards comply with a number of Core Carbon Principles (CCP), including with land tenure related requirements[20]. However, the CCPs have only recently been formulated. Their adequate integration into existing standards and implementation are complex and would benefit from close support, monitoring and review from the land tenure perspective.
Weak due diligence capacity. This is manifest judging by the reported violations of IPs and LCs land and FPIC rights, and by the inadequate information included in monitoring and verification reports. These violations are often perceived as intentional or as a result of profit-seeking behaviors from VCM actors. But they are most likely due to a lack of knowledge, capacity, and tools necessary to understand the complex land rights and related requirements and to carry out the due diligence. Also, to difficulties in accessing the required expertise and local sources of information.
Deficient carbon offset value chain. Current descriptions of the carbon offset value chain reduce it to the services provided by VCM actors. But VCM services represent only a portion of the inputs necessary to realize an emissions reduction claim from a piece of community land. The chart below offers a more complete representation of the value chain of community-based carbon offsets, focusing on the type of input provided. In addition to services provided by VCM actors, these offsets require first and foremost land and natural resources (including carbon stocks to be conserved or replenished), and on the ground labor and knowledge, all provided by IPs and LCs. Other services such as the project initiative, FPIC facilitation, Monitoring and Evaluation, and project design are currently being provided mainly by VCM actors – who alone do not have the needed knowledge, expertise, independence, community endorsement, or networks to deliver such a variety of complex services well, effectively and efficiently. The inclusion of other actors and constructive collaborations are needed to improve this value chain.
Land action not factored into the pricing of carbon. While secure tenure is a pre-requisite for climate action to succeed, and part of sustainable development goal 1 (poverty alleviation), it is not currently considered a benefit or co-benefit by carbon standards, and hence not factored into the pricing of carbon. Investments[21] in due diligence, FPIC and the strengthening of land rights and governance systems are treated as a cost when they in fact they help deliver at once climate and other environmental benefits, human rights and socio-economic benefits.
Lack of access to information limits transparency and accountability. The exact geographical boundaries of planned and validated projects are difficult to access. This makes it difficult to detect land rights violations and overlaps. In addition, agreed upon and actual distribution of benefits from carbon credit sales are rarely disclosed or available for community members, further limiting the accountability of investors, developers, and community representatives.
Lack of VCM regulation. Finally, all the above-listed weaknesses of the VCM are in large part due to the lack of regulation at the international, national and regional levels. Regulation is indispensable to ensure that rules are clear, that actors and projects are known, approved and licensed to operate; also to ensure fair competition and transparency, that affected populations have access to information, as well as a fair distribution of benefits. The absence of regulation does not favor actors in the VCM or the VCM in the long term: it contributes tarn its reputation, to elevate risks, uncertainty and volatility.
3.3 IP&LC: LACK OF ACCESS TO INFORMATION & RESOURCES TO DRIVE CLIMATE ACTION
For the reasons outlined before IPs and LCs should play a critical role in the design, implementation and monitoring of projects on their land – as co-owners and partners in carbon projects - and should significantly benefit from the sale of carbon credits. However, they currently have limited access to the data, VCM knowledge, legal and technical support services, and funds necessary to navigate this very complex market. This limited access affects their ability to understand, monitor, and influence projects and to negotiate the terms of carbon deals.
Asymmetry of information. IPs and LCs community members and representatives overall lack access to the data and information necessary to understand deals that are being developed on their lands, let alone to identify opportunities, develop and certify carbon projects that make sense for them with the partners of their choice. This is due in part due to the absence or lack of proper FPIC processes throughout the project cycle. But also, to the lack of access to information and knowledge about the legal, technical and financial aspects of carbon deals, itself enrooted in the lack of regulation. This limits their ability to contest or affect carbon deals that infringe on their land rights and on their right to self-determine how they want to use the land and resources, but also their ability to positively affect climate action and its effectiveness.
Lack of access to legal and technical support services. Nature-based markets in general, including the VCM, are very complex and continuously evolving and are still very little understood outside of these markets’ circles. To effectively safeguard their rights, influence these projects or even further, initiate them, IPs and LCs need support on a variety of issues, from legal and technical issues to more procedural and strategic issues such as how to access such support, funding and how to structure projects.
Lack of access to funds. In order to correct the existing asymmetries of information and to enable IPs and LCs to drive climate action, funds need to directly reach IPs and LCs. This is where the recent wave of topical interest and donor funding to support climate action has missed the mark. In 2022, only 2.1% of the US494 million provided by funders under the COP26 pledge directly reached IPs and LCs.[22],[23] Not only the amount of funding to IPs and LCs needs to continue increasing, but innovative ways and partnerships must be carved to channel funds as directly as possible to IPs and LCs, to secure their rights and implement climate action, but also, to strengthen their ability to understand the VCM and their position as key actors.
4. TAKING ACTION TO SECURE TENURE IN THE VCM: GLA’s PERSPECTIVE
Based on the identified impediments to responsible carbon investment, GLA foresees three necessary lines of action to ensure the VCM delivers real environmental, socio-economic and human rights benefits:
1. Continued strengthening of land rights, governance and administration. Advancing the legal recognition, registration, and visibility of IPs and LCs rights and strengthening community land governance remains a priority for climate action, climate change mitigation activities and corresponding carbon investments.
2. Transform the VCM into a mechanism that respects and strengthens land rights. Carbon investments do not depend entirely on the a priori strengthening of IPs LCs land tenure and governance: investments can themselves include actions or leverage parallel funding to secure IPs and LCs land rights and strengthen community land governance.
3. Enable IPs and LCs to drive climate action. Just, adequate, and successful climate action requires that it be community-driven. As recognized stewards of the forest, IPs and LCs must be empowered and resourced to drive climate action in their territories, including through secure tenure, strong land governance, and sustainable livelihoods.
Along these lines of action, GLA will continue to support strong land rights and land governance through specific studies and service provision, with a stronger emphasis on the rights of Indigenous Peoples and Local Communities. In addition, we call for donors, VCM actors and the land sector to support the following specific actions to help transform the VCM and enable IPs and LCs’ protagonism:
Specific actions to transform the VCM and scale up IP & LC climate action:
Institute initiatives to include tenure security as a co-benefit of carbon projects.;
Implement a multi-stakeholder analysis of the carbon offset value chain, with a specific focus on land rights, with the aim of envisioning and piloting more efficient, just and sustainable value chain models;
Review of land tenure requirements in major standards and the CCPs.;
Provide dedicated support to VCM actors to develop detailed and customized guidelines and tools and to address land tenure issues in their portfolios;
Develop a global geodatabase of planned and existing carbon projects;
Develop a methodology and tools to enable IPs and LCs to access the carbon market and other resources for implementing their own pathways to tenure security and prosperity.
Contact Us
To learn more about the work Global Land Alliance is doing to promote a rights-from-the-start approach in the Voluntary Carbon Market and other nature-based markets, or to collaborate on the work being done, contact us at:
[1] Overarching goal of the Paris Agreement
[2] For example, the provision of clean energy, climate-smart agriculture, resilient cities, reduction of emissions from deforestation and forest degradation (REDD+), and afforestation, reforestation, and revegetation (AFF).
[3] “Indigenous Peoples” refers to Indigenous and tribal Peoples as defined in article 1. the ILO Convention 169. “Local communities” refers to “non-indigenous communities with historical linkages to places and livelihoods characterized by long- term relationships with the natural environment, often over generations” (IPBES 2020).
[4] Wily 2011 https://www.iccaconsortium.org/wp-content/uploads/2015/08/legal-example-the-tragedy-of-public-lands-2011.pdf; Rights and Resources Initiative 20023, https://doi.org/10.53892/MHZN6595;
[5] IPLC tenure security has become an international priority since the embracement of REDD+ at Bali in 2007, including for the IPCC. https://news.mongabay.com/2022/03/after-ipcc-climate-report-stresses-indigenous-local-land-rights-58-times-lets-respond-with-a-concrete-tenure-plan-commentary/
[6] Study covering 52 countries in the tropics
.https://rightsandresources.org/wp-content/uploads/2018/09/A-Global-Baseline_RRI_Sept-2018.pdf
[7] See BirdLife International, http://www.keybiodiversityareas.org.
[8] Fa et al. 2020, https://doi.org/10.1002/fee.2148.
[9] These include rights in the UN Declaration on the Rights of Indigenous Peoples, and the UN Indigenous and Tribal Peoples Convention.
[10] See “FPIC for fair and equitable land governance”.
[11] https://interactive.carbonbrief.org/carbon-offsets-2023/mapped.html
[12] https://carbonmarketwatch.org/publications/a-fair-share-of-the-voluntary-carbon-market/
[13] The areas legally designated for and owned by IPLCs increased by more than 100 million hectares (Mha) from 2015– 2020.Rights and Resources (RRI) (2023). “Who owns the world’s land.”
[14] In 2020, according to RRI’s definitions https://rightsandresources.org/tenure-tracking/forest-and-land-tenure/
[15]A recent review covering 31 countries in the global South found that only 3 explicitly recognized IPLC rights to carbon https://rightsandresources.org/publication/carbon-rights-technical-report/
[16] https://rightsandresources.org/publication/carbon-rights-technical-report/
[18] For example, see LandMark, and RRI’s Tenure Tracking Tool.
[19] https://www.globallandalliance.org/articles/free-prior-and-informed-consent-fpic-for-fair-and-equitable-land-governance
[20] https://icvcm.org/. Compliance with the CCPs is in principle voluntary, i.e., Registries can choose to apply for certification by IC-VCM or not, but in practice not having a CCP seal will strongly affect a provider’s ability to sell credits.
[21] Contacts Global Land Alliance regarding an upcoming publication entitled “Recognizing improved land tenure security as a co-benefit in forest carbon projects”).
[22] Pledge made at COP26 by 22 bilateral and philanthropic donors of $1.7 billion between 2021-2025 to advance forest tenure rights in tropical forest countries.
[23] Forest Tenure Funders Group Annual Report 2022-2023. https://www.landportal.org/library/resources/indigenous-peoples-and-local-communities-forest-tenure-pledge