Indigenous leaders call for climate finance disruption

Indigenous leaders from around the globe proceed to make use of their hard-won visibility to call for a system of climate finance that values their knowledge and work, offers a good price for the nature-based solutions they supply, and pays them — directly.  

“The asset that we bring to the table is knowledge. To think concerning the future you could have to think concerning the past,” Francisco Souza, managing director of the FSC Indigenous Foundation, said at a Sept. 23 event hosted by the international Indigenous rights organization as a part of Climate Week NYC. “We now have the solutions already.”

For corporations and institutions which have made investments in nature-based solutions and/or buying carbon offsets a part of their climate strategy, valuing Indigenous people’s contributions means investing of their organizations and projects, and paying a good price for offsets.

“We would like to inform the [donors] they need to try working with [Indigenous organizations] directly. They don’t must undergo too many individuals,” Oumaru Aissatou, vp of the Network of Indigenous and Local Populations for the Sustainable Management of Forest Ecosystems in Central Africa, said through a translator on the FSC Indigenous Foundation event.

Preserving forests is significant to tackling the climate crisis and protecting hundreds of thousands of species at risk of extinction, and research has repeatedly shown the vital role Indigenous people play as forest stewards. At 370 million, these communities make up lower than 5 percent of the human population but manage or hold tenure over 25 percent of the planet’s land surface and support about 80 percent of worldwide biodiversity. A United Nations report released last yr, for instance, found that the Indigenous people of Latin America — who face increasing, violent threats to their lands and lives — are by far the most effective guardians of the regions’ forests, with deforestation rates as much as 50 percent lower of their territories than elsewhere.

Indigenous communities make up lower than 5% of the human population but manage or hold tenure over 25% of the planet’s land surface and support about 80% of worldwide biodiversity.

Indigenous contributions were officially acknowledged at COP26 in November, where for the primary time in COP history, their leaders found themselves drawn into the inner circle of decision-making. The international climate negotiations resulted within the Glasgow Climate Pact, which recognized Indigenous rights and acknowledged the essential role Indigenous peoples and native communities (IPLCs) play in “averting and minimizing loss and damage related to the adversarial effects of climate change.”

Too many Malcolms in the center

Yet despite the indisputable fact that their knowledge and work reduce the monetary costs of the climate crisis, lower than 1 percent of climate financing goes to support forestry efforts on Indigenous land, and only 17 percent of that cash goes specifically to Indigenous-led and area people organizations, in line with a Rainforest Norway Foundation report published last yr. 

The principal reason so little funding reaches these communities, the report said, is the middlemen — intermediary organizations that usually have complicated application processes and onerous reporting requirements.

About half of total climate funding is channeled through multilateral institutions, the report notes. After that, the highest 10 intermediaries for the largest donors include a combination of huge international NGOs, U.N. agencies and consulting corporations — not IPLC organizations. Multilateral institutions have historically had limited success in reaching IPLCs directly. For instance, the World Bank Forest Carbon Partnership Facility (FCPF) Readiness Fund has given just 1 percent of its total funding to IPLC organizations, in line with the report.

“We want to have a model that truly suits what’s happening in our territories. There must be flexibility. I’m not talking about flexibility in accountability, I’m talking about flexibility in priorities,” said Gustavo Sanchez, president of the Red Mexicana de Organizaciones Forestales Campesinas, also speaking through a translator on the FSC Indigeneous Foundation event. “We want to vary the way in which we predict concerning the roles we now have as donors and beneficiaries and as an alternative see one another as collaborators and equals.”

The appeal for direct investment doesn’t only apply to public money, but private as well. Cutting out the middleman means investing directly in Indigenous-led funds, organizations and projects. It really boils all the way down to trust and reciprocity, Indigenous leaders and advocates say, trust of their decision-making, their priorities and their knowledge. 

“I would like to be clear that we all know the Indigenous world just isn’t perfect; we now have many problems, a lot of them problems that capitalism created,” Emma Pineda, project officer for Latin America and the Pacific Region for the Pawanka Fund, told GreenBiz. “But Indigenous communities have their very own systems — systems of presidency, systems for solving problems, and economies — that work well for them. They’re not similar to the systems within the Occidental world, and infrequently they’re ignored because they’re different, but we now have them. We now have ways in which work.”

We want to vary the way in which we predict concerning the roles we now have as donors and beneficiaries and as an alternative see one another as collaborators and equals.

Founded in 2014, the fund supports Indigenous communities by investing in areas comparable to food systems, climate change resilience, water and natural resource management, and Indigenous economies, in addition to language revitalization, women and youth leadership, health and well-being, and more. The concept is to assist create self-sustaining communities that thrive on their very own terms, Pineda said. 

A rip-off of a price

The voluntary carbon markets — where the overwhelming majority of corporations which have made carbon offsets a part of their climate strategy purchase those offsets — even have their share of intermediary problems. But beyond that, voluntary market prices for offsets that fund nature-based solutions are just too low.

Carbon offsets are a controversial financial tool, a market-based strategy that goals to mitigate global heating by turning captured CO2 into commodity. When an organization buys offsets — each of which generally equals a metric ton of carbon — to fund a nature-based project, it is basically paying a community for conserving forests or another practice that ends in captured carbon. 

A recent Bloomberg Green investigation revealed how oil and gas giant BP inked a deal in 2021 to purchase as many as 1.5 million offsets at $4 each through a program in rural Mexico facilitated by the World Resources Institute. CO2munitario, which goals to advertise sustainable development in rural economies and protect Mexico’s endangered forests, spans 59 communities in greater than a half-dozen states. Bloomberg highlighted one particular community, which received its first annual payment in late 2021, after enrolling in this system two years earlier. The pay, split amongst 133 community members, amounted to about $40 each.

“By paying $4 per offset to subsistence farmers in distant areas with less access to education and web, BP has handed over around 15 percent of what others at the moment are offering for offsets from Mexican projects,” the article reads.

Which may be true compared to compliance markets, comparable to the European Union Emissions Trading System, where forest carbon credits were selling for $12 to $14 in 2021. Compliance markets are marketplaces arrange for heavy emitters, comparable to oil corporations and cement manufacturers, who’re required by the jurisdiction to purchase carbon credits.

But corporations using the voluntary markets, which, again, is the overwhelming majority of buyers, were paying a spread of $4 to $6 per offset in 2021. Clearly that quantity just isn’t enough to fight the forces of deforestation, and the usually lucrative financial payoff that comes with them. Even $12 to $14 per offset won’t be enough, depending on the project’s location and the economic situation and market forces involved.

This implies corporations should be prepared to pay a price that may actually end in forest preservation and do the due diligence mandatory to make certain that cash is attending to the Indigenous and native communities involved.

“We want to have fair conditions of exchange,” Sanchez said. “Sometimes buyers of carbon credits don’t pay a good price. Territories are doing all of the work, and markets don’t recognize the worth.”


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