Empowering Communities Through Carbon Finance: EcoAct hosts workshop at Innovate4Climate 2023  

 Innovate4Climate is an annual conference hosted by the World Bank Group. Bringing together both public and private sector stakeholders, the conference focuses on climate finance, climate investment and climate markets. This year, EcoAct hosted a workshop on ‘Empowering Communities Through Carbon Finance’. EcoAct’s Portfolio and Partnerships Senior Consultant, Valentin Bouvier, moderated speakers from Permian Global, VNV Advisory, Carbon Streaming Corporation and EcoAct’s Blue Carbon Manager, Elisa López Garcia. EcoActor, Hannah Lawton looks at the main topics the workshop covered.

Innovate4Climate 2023 

At the Innovate4Climate conference in Bilbao, the role of communities in carbon finance projects was the primary focus for EcoAct and fellow panelists on the ‘Empowering Communities Through Carbon Finance’ session. As experts on the Voluntary Carbon Market and experienced project developers, they discussed key issues and concerns surrounding community engagement and shared their insights on how these can be integrated into a project’s design, implementation, operation, and investment. 

We know that carbon offsetting projects and carbon finance can be used as a powerful tool in the fight against climate change. However, much of the success of these projects relies on the involvement of local communities within and around project areas. While local and indigenous communities have a central role to play in the restoration and preservation of ecosystems and natural resources, these groups are often marginalised and also the most impacted by climate change. For carbon finance to work, it is crucial then that local communities are not regarded as passive beneficiaries but instead considered active agents in advancing climate action

Working with community members to design inclusive and just carbon offsetting projects 

Kicking off the session, EcoAct’s Blue Carbon Manager, Elisa López Garcia spoke about participatory strategies. She explained that community-led engagement is key to project success and participatory strategies should be decided upon when first developing a project. For example, a stakeholder consultation or grievance mechanism.  

Successful community participatory strategies should be aligned with a Free, Prior and Informed Consent Process (FPIC). Following this process allows indigenous communities to have control over their territories and empowers communities to negotiate the conditions under which a project will be designed and implemented. This in turn generates trust amongst community members and project developers, and fosters belief in the project that is needed to safe-guard projects long-term.

 “The design of successful community-centric carbon projects goes hand-in-hand with the implementation of Free, Prior and Informed Consent.” Elisa López Garcia, Blue Carbon Manager, EcoAct.   

The Semilla Azul mangrove restoration project in the Yucatán Peninsula, Mexico is a great example of community involvement and engagement from the outset of project development. This project, currently being developed by EcoAct and our local partner, Resiliencia Azul, is centered on community-based ecological restoration. Fundamental to its success so far has been the use of participatory workshops and iterative visits to the project site.  

Semilla Azul is located inside community land and the land tenure is neither public nor private, but communal. This is important as local community members hold the ownership of the carbon rights generated from the project. To ensure project success, it is vital to have a deep understanding of the traditions and customs of the community in the Semilla Azul project area and a respect of their governance.  

Community participation is key to project success and implementation   

Drawing upon the Katingan Mentaya Project in Indonesia, Permian Global’s Yani Saloh outlined how community engagement has been essential to project success and implementation. Yani is a community and SDG specialist at Permian Global and is indigenous to the region in which the Katingan Mentaya Project is based. The purpose of this project is to protect and restore 149,800 hectares of peat swamp forests, which is home to several endangered species including orangutans and proboscis monkeys. In addition to peat swamp protection and restoration, the project promotes transformation by creating opportunities for local communities in the surrounding project area.  

Local communities in the Katingan Mentaya Project area have become forest guardians and conduct forest and biodiversity monitoring and patrols. To date, 550 local community members are trained and paid as firefighters in the local area to prevent and manage wildfires. The project also supports a microfinance programme and has benefited 1,200 beneficiaries in seven surrounding villages to the project area. 

These various community engagement initiatives supported by the project not only improve local livelihoods but also make the forest and project area incredibly valuable to those that live there. Engaging with local communities and involving them in the project has led to community members being employed, empowered and becoming a driving force in the protection and maintenance of the forest and peat ecosystems of the Katingan Mentaya Project.

 “We feel we are making the forest become valuable to the local people by remaining standing, rather than cut down. This is essential for long term success.” Yani Saloh, Community Specialist for SE Asia, Permian Global.  

Thinking long-term to minimise risk when developing offsetting projects 

The key to minimising project risk is to think long-term. In addition to climate science, social science plays a vital role in a project’s long-term success and communities should be at the forefront of a project design and implementation. Sandeep Roy Choudhury, Director, VNV Advisory Services, explained that community engagement should occur at the early stages of projects if developers want projects to succeed long-term.  

Communities should be engaged with within the first two to three years of a project to ensure local buy-in. The design of a project must then be revisited and adapted throughout its lifetime to address the evolving needs and challenges of the communities. Projects often span many years and multiple generations, and it is crucial to regularly visit project sites, continually engage with local community members and consider changing project context.  

 “We are firm believers that what you need to do, in terms of socio-economic work, needs to be done within the first two to three years and there is no point doing something after the seventh, eighth or ninth year because that way you are not getting any community buy-in”. Sandeep Roy Choudhury, Director, VNV Advisory Services. 

Community empowerment should be factored into project investment decisions  

Community empowerment is one of the foundational aspects of a successful project investment, as it is closely linked to the long-term success of the project. Community engagement is also now an expectation from buyers of carbon credits who want to ensure projects not only have environmental benefits but social and economic benefits for local communities too.

“As an investor in a project, over the lifetime of that project, community engagement is absolutely central to success”. Oliver Forster, VP of Sales, Carbon Streaming.

 VP of Sales at Carbon Streaming, Oliver Forster, explained that while it is well recognised amongst investors and developers that community engagement can lead to the long-term success of carbon offsetting projects, it can still be complex. Every project is different and community engagement initiatives need to be tailored to project context and local requirements. There is no one-size-fits-all approach to successful community engagement, and it is essential to build upon and use local knowledge to inform the development of a project.  

While community engagement is highly case-specific, there are still ways to assess and ensure its success throughout a project, such as ensuring projects meet independent standards and conducting thorough project due diligence. Project due diligence ensure projects deliver co-benefits and can be done through site visits, and other community engagement mechanisms. As part of the due diligence process at EcoAct, our Nature- and Technology-Based Solutions experts regularly conduct field visits and meet with local beneficiaries of projects we develop and support.  

To learn more about offsetting and how it can be used as part of your organisation’s net-zero journey, download our guide here.