Supervisory Body’s criteria or rationale for fees to be levied on communities with concerns missing from Article 6.4
Photo for representation: iStock A key document from a body overseeing the United Nations (UN) carbon markets contains some serious flaws, including the fees that it intends to levy on communities with concerns.
Article 6.4 of the Paris Agreement aims to establish a centralised market under the United Nations, allowing carbon credits generated by projects that reduce or eliminate greenhouse gas emissions to be traded between individuals, businesses, and countries in order to meet climate targets.
The Supervisory Body (SB), a UN panel tasked with overseeing the 6.4 markets, recently put out a document that proposed rules for the submission of appeals or grievances under the Article 6.4 mechanism by participants, including local communities.
Depending on the project type, local communities take part in emission reduction activities. The cookstove projects, for example, claims to reduce emissions by providing efficient or clean cookstoves that must be used by local communities. Agroforestry projects use land owned by the community to sequester carbon.
Delhi-based think tank Centre for Science and Environment-Down To Eearth (CSE-DTE) investigated a few activities under the voluntary carbon market (VCM), which is not government-mandated and allows companies, institutions, and individuals to voluntarily offset their greenhouse gas emissions. These findings are published in the 2023 report Discredited.
CSE also provided feedback on the procedure for appeals and grievances in the 6.4 market.
It submitted: “An effective grievance process provides accessibility, transparency, simplicity, affordability, and empowerment to the stakeholders intended to utilise it. Communities affected by activities under the mechanism must have clear and unobstructed avenues to voice their grievances.”
Stakeholders (local communities) who are eligible to participate in a market activity, activity participants (project developers) and the designated national authorities of the host country responsible for project authorisation can all file an appeal, according to the document
Read more: Dark underbelly of carbon trade
If their project registration, post-registration change, emission reduction issuance, or crediting period renewal is rejected or approved, they may file an appeal.
To file an appeal, the SB is considering imposing a standard fee of either $5,000 or $2,500. The body has not provided details on the criteria or rationale behind these specific monetary figures, CSE highlighted in its feedback submitted on April 22, 2024. This needs to be shared, it added.
Further, the procedure document also requires appellants to file a declaration in the form of an affidavit. This may further introduce bureaucratic complexities into the process, the think tank pointed out.
A submission from the office of the UN high commissioner for human rights recommended that the supervisory body waive fees for potential applicants to ensure equitable access and non-discrimination.
Grievances, according to the document, can be submitted by individuals, communities, or organisations. It applies to people who have suffered adverse social, economic, or environmental effects as a result of the implementation or treatment of a registered A6.4 activity within the activity cycle under the Article 6.4 mechanism.
Read more: Due credit: The Indian voluntary carbon market is growing exponentially
However, the document does not define adverse effects or explain how they will be determined.
Grievances will also incur a standard fee of $5,000 or $2,500. The SB has proposed a fee structure that is differentiated based on grievance type.
The document proposes no fees for human rights violations and other issues related to land access, acquisition, and resettlement.
It is also considering imposing a half fee ($2,500 or $1,250) if the project activity degrades environmental or social conditions, or if project developers fail to carry out the planned corrective measures if the activity under the 6.4 mechanism has a negative impact.
The document stated that claims involving access to project benefits or natural resources will be subject to a full fee.
The CSE-DTE investigation into VCM discovered that the most common issue was the community's limited or non-existent access to benefits.
Imposing a full fee on the most commonly reported issue — access to project benefits — may discourage local communities from raising their concerns. The grievance process also requires the submission of an affidavit, which may exacerbate community alienation.
Read more: Unearthing reality: A DTE-CSE probe into the workings of the Indian voluntary carbon market
Amnesty International expressed concern in its submission about the SB’s proposed rule, which would allow grievances to be submitted “within the valid crediting period.”
“This should be amended to ensure that grievances can be raised by affected persons / people / communities who were not informed or consulted on project activities and only became aware of them after the end of the activity,” it wrote.
The SB will meet between April 29, 2024 and May 2, 2024 to discuss the Article 6.4 mechanism, including the draft procedure for the Appeal and grievance processes.
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