Carbon Market Watch

For fair and effective climate protection.

Policy Brief: Social and environmental accountability of climate finance instruments

01 Sep 2015

PDF (English)

Executive Summary

SOCIAL AND ENVIRONMENTAL - FINAL web CoverClimate change is a global injustice to present and future generations, and one of the greatest human rights challenges of our time. For one, climate change has a significant effect on several human rights, such as the right to safe and adequate water and food, the right to health and adequate housing, and the right to life. On the other hand, certain actions to address climate change can directly result in adverse impacts on human rights.

The need for a human rights based approach is already enshrined in the 2010 Cancun agreements and is seen by many as a core foundation of the Paris climate treaty. Despite the existing mandate, there is little guidance on how human rights can be systematically considered in the design of climate action, which is of particular relevance in relation to achieving sustainable development objectives, full and effective public participation in design and implementation of measures to address climate change and ensuring social as well as environmental accountability for all climate actions.

A closer look at instruments established under the United Nations Framework Convention on Climate Change (UNFCCC) to address climate change reveals that so far the Cancun mandate has hardly been operationalised and enforced. In addition, a lack of harmonised guidance has resulted in a fragmentation of criteria and standards across mechanisms with current mechanisms applying very heterogeneous approaches to the promotion of sustainable development, the consultation of local communities and access to redress mechanisms.

For example, the Clean Development Mechanism (CDM) – the UNFCCC climate mechanism that offers most experience – does not have any safeguards policy or a redress mechanism in place. Although it has improved its local stakeholder consultation rules, infringement is not linked to a compliance mechanism. Information about how REDD+ safeguards are respected will need to be reported through a Safeguards Information System (SIS), with reporting requirements likely to differ from country to country. In the case of Nationally Appropriate Mitigation Actions (NAMAs) the issue is even more fragmented with no universal guidelines on how to conduct local stakeholder consultations and no requirements related to redress mechanisms and safeguards systems.

While it is important to advance the policy reforms of the individual climate instruments, the current negotiations provide a crucial opportunity to enshrine the recognition for a human rights based approach in the Paris climate treaty.

To address the challenges of increased fragmentation following recommendations are made:

  • Establish an institutional social and environmental safeguards system applicable to all UNFCCC mechanisms and funds, including best practice guidance on stakeholder consultations and human rights impact assessments;

  • Create an independent UNFCCC accountability mechanism with multiple functions, including an ombudsman office and compliance review panel;

  • Establish a communication platform to share information and best practices of international financing institutions related to projects or programmes implementing climate action;

  • Establish a platform for sustainable development benefits reports across all UNFCCC mechanisms. 

Read the policy brief here