An opportunity for civil societies to shape carbon market regulation

Uganda is at a crucial moment in its battle against climate change as it deliberates the regulation of carbon credits, a critical tool in the fight against greenhouse gas emissions.

Carbon credits are treasured instruments that reflect a reduction in greenhouse gas emissions. These credits are traded globally, allowing countries and corporations to offset their emissions by investing in emission reduction projects elsewhere, especially in the global south.

In Uganda, the National Climate Change Act, 2021, was passed into law as the primary legislation to combat climate change, and this week there was a stakeholder consultation on carbon markets.

Conversely, carbon markets can be a double-edged sword if pertinent issues are not addressed. There is a significant issue tied to carbon credit projects that cannot be ignored: the carbon grab. That is land grabbing associated with carbon markets.

The Clean Development Mechanism (CDM) is one of the examples. It often includes reforestation, afforestation, or renewable energy initiatives. While these projects aim to mitigate climate change, they can also lead to unintended negative consequences, particularly in terms of land use and property rights.

Land grabbing, which involves the unauthorised and often forceful acquisition of land for commercial purposes, is a serious concern in the context of carbon credit projects in Uganda.

In 2013 a UK firm, the New Forest Company, was implicated in a violent land grab displacing thousands of smallholder farmers and their families in Mubende.

By the time it entered into settlement with the communities, before the Compliance Advisor Ombudsman of the World Bank’s International Finance Corporation (IFC), both the company and the communities had suffered reputational and livelihood setbacks respectively. 

This incident highlighted the lack of proper governance and accountability mechanisms in carbon markets in Uganda. It also raised questions about the effectiveness of the regulatory framework in protecting the rights and interests of local communities involved in such projects. 

Since indigenous communities bear the brunt when things go south, civil society organisations that represent their interests have a crucial role to play in influencing Uganda’s carbon market regulation through the proposed National Climate Change (Mechanism) Regulations, 2023.

These organisations can do this by bringing up the concerns of indigenous communities and making sure that their opinions and interests are taken into account during the ongoing consultation processes.

The opinions of CSOs are better suited to play a crucial role in this regulation’s inclusion of accountability and transparency principles. Equipped with regulations that are imbued with accountability, the advocacy groups may effectively hold private and public institutions responsible for their conduct, thereby advancing transparency in the distribution and administration of carbon credit programmes.

Their oversight ensures that benefits are distributed fairly, helping to prevent land grabbing and social injustices. This includes proper compensation, resettlement, or meaningful community participation in carbon credit projects. By doing so, they mitigate the risk of land grabbing.

Incorporating human rights based due-diligence in carbon credit regulations cannot be gainsaid. Human rights due diligence involves the steps taken by businesses to identify and act upon actual and potential human rights risks for host communities their operations, supply chains and the services they use. This not only safeguards communities but also helps the purchasing company assess the offset’s worth and safeguard it with reputational risk.

CSOs should provide communities with information and resources on the proposed legal framework to ensure they influence the quality of its contents and are active participants in decision-making processes that shape their futures.

By tabling their collective expertise, CSOs can advocate for best practices in carbon credit projects. They can offer recommendations for sustainable, community-friendly projects that have an equal footing with international human rights standards.

With the contribution of CSOs, we can help guarantee that Uganda’s efforts to combat climate change are not achieved at the expense of the rights of poor land owners.

Simon Peter Esomu, lawyer with an interest in business and human rights.