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Title: Gender and Climate Change Financing


1
Gender and Climate Change Financing
  • Coming out of the Margins
  • Mariama Williams
  • mariamaw_at_hotmail.com

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Gender and Climate Change Financing Towards
Engendering the Post 2012 financing Regime
  • Facts, background, controversy surrounding
    financing Climate change (UNFCCC objective)
    Equity issues in climate change financing
  • Gender adaptation, mitigation and technology
    (addressed in module 4-6)
  • Legitimacy for en-gendering climate change
    financing equity basis of UNFCCC
  • Key messages
  • Part I Gender and Financial Markets brief over
    view
  • Myths about women and finance( whole group
    exercise)
  • Stylized facts on gender and global finance the
    state of play in Climate finance
  • Part II the architecture and governance framework
    of climate change financing
  • Public financing - Private sector financing
    (Carbon Financing)
  • Other forms of Private sector financing -
    Innovative Financing
  • Small Group exercise with article on Gender and
    climate change financing, Philippines case study
  • Part III. Details on specific Financing
    Mechanisms and Instruments
  • NAPA/NCs - CDM/REDD/LULUCF - MDG carbon
    facility/ Microfinance
  • Small Group exercise with Bangladeshs and
    Burundis NAPA- financing exercise
  • Part IV.
  • Summary/Post 2012 regime/Principles for gender
    sensitive financing framework
  • Proposals for Gender-sensitizing Climate Change
    Financing
  • Coming soon Gender and climate finance resources
    from GGCA

6
Engendering Climate Change Finance
  • Firewood or forest?
  • Aim
  • 1. To develop understanding of the institutional
    architecture and governance of the climate change
    financing mechanisms, particularly as it relate
    to gender equality and womens empowerment
    outcomes
  • 2. To utilize this understanding to advocate for
    gender equality in the distribution and
    mobilization of climate financing funds and to
    ensure that mobilization of funds do not thwart
    womens empowerment projects.

7
I. Background The bare facts
  • 1.Financing need for climate change
  • ? UNFCCC US 262.15 billion - 615.68 billion
    per year by 2030 (UNFCCC 2008)
  • ? G77 and China (August 2008) Initial minimum
    US 278.82 - 557.64 billion per year
    (approximately equal to 0.5 1 of Annex I
    countries total GDP 2007)
  • 2. Climate related funds under GEF, UNFCCC
    financing arm
  • ? 10.03 billion - 10.25 billion plus a further
    18.95 billion may be forthcoming from bilateral
    (6.68 billion) and multilateral initiatives
    (12.27 billion).
  • This is 1/10th of the minimum estimated
    requirement.
  • 3. GAP in financing amount pledged is too low
    relative to the scale of financing needed
  • 4.There is a serious need to find
    alternative/innovative sources of funding for
    both adaptation and mitigation.
  • Adaptation deficit/development deficit/sustainable
    development

8
Background
  • 5. Scaled up financing to fill the gap should
    come from
  • New and additional (to existing ODA flows)
  • No double counting of ODA and climate financing
  • Rationale
  • 0.7 of GNP target for ODA
  • UNFCCC obligated to provide financing support for
    developing countries implementation of UNFCCC.
    Funding is supposed to be adequate, additional,
    appropriate, equitable and predictable ( the
    Bali-5 principles).
  • ?Adequate (compensation, not loans or other
    forms of debt incurring instruments).
  • ?Additional New (not counted as part of ODA
    flows),
  • ?Appropriate (polluter pays).
  • ?Equitable (based on principle of common but
    differentiated responsibility and respective
    capacity).
  • ?Predictable (long term guaranteed flow of
    funds).
  • Financing should be consistent with the principle
    and obligations of the Convention
  • ?The rich countries have accepted, in principle,
    their responsibility for their predominantly
    large carbon foot prints and their historical
    role in the creation of the factors most
    implicated with rising atmospheric green house
    gases.
  • ? Under Kyoto, the rich countries committed to
    decrease GHG by 6-8 below 1990s level, the
    developing countries were exempted from this.
  • ?What is at stake is just how much they are
    willing to put on the table? For how long? And,
    if and when, should more be required of the
    middle income and poorer nations?

9
II. Controversies in climate change financing
  • A. Tug of war overThe adaptation
    deficit/development deficit
  • ?Mitigation v. Adaptation wither development.
  • ?-Single-minded focused on stabilizing or
    decreasing GHG emissions and engendering the
    transformation to low carbon economy.
  • Would seem to have shunted development to the
    back burner.
  • ?To what extent can funds be segmented (isolate)
    for climate change from development, when in
    fact, the context of the developing countries,
    the two are inextricably intertwined. This is an
    issue for both adaptation and mitigation.
  • ? Climate change is
  • a) not fundamentally a technical issue (it is
    also behavioral and structural) and
  • b) cannot be simply a matter of funding purely
    techno-centric climate change initiatives
    isolated from the underlying concerns of economic
    development, poverty, gender and social
    inequality.
  • ?The adaptation discussion, itself, is a disguise
    form of managing the tensions around development
    (and all that it encompasses) and the climate
    change policy financing framework.
  • ? The nature of the development-climate change
    nexus

10
Controversies in climate change financing
  • ? The nature of the development-climate change
    nexus
  • ? (i). The key developmental problematic, in the
    face of climate change, is the transformation and
    growth of the productive sectors of the economy
    from one that is mainly oriented to fossil based
    energy sources towards a low carbon economy.
  • ? (ii). There are also critical questions about
    how rapidly should the de-carbonization occur and
    who should pay for it.
  • ?Clearly, either rapid or slower paced
    de-carbonization poses significant constraints on
    economic growth and development in the south.
  • ?It also has implications for all of the
    productive sectors of the economy from
    agriculture, fishery, and forestry to industrial
    and services which also impinge on trade,
    industrial and service development, gender
    equality and poverty reduction policies and
    programs.
  • ?Social development issues are also impacted
    choices must be made about the location,
    financing and climate proofing of housing and
    other human settlements, food self sufficiency
    and access to essential services (health care,
    sanitation, water).
  • ?This raises the issue of land-use, land use
    change and the distribution of economic and
    social resources between women and men and among
    different communities.

11
Controversies in climate change financing
  • B. What needs to be funded ?
  • Adaptation activities have been historically and
    systematically under funded
  • Infrastructure (for all activities need to be
    funded)
  • It is already the case that in the developing
    countries 70-80 of the damages caused by weather
    is to infrastructure, compared to 40 in
    developed countries, (Hart 2007).
  • Annual adaptation costs for developing countries
    is estimated to range anywhere from 4-37
    billion, (Stern 2006), 28-67 billion 2030
    (UNFCCC 2007) and to 86 billion, 2015 (UNDP
    2007).
  • The cost of mitigation is estimated to be about
    176 billion to 200 billion.

12
Adaptation
  • Adaptation 1) increase resilience decrease
    impact of disasters 3) coping and relief to
    experience when damage occurs.
  • UNDP 2007 annual adaptation investment need will
    be 86 billion by 2015
  • World Bank 10-40 billion by 2030 (WB 2009)

13
Controversies in climate change financing
  • Equity issues in climate change financing
  • What is the most just and equitable distribution
    of the costs and burdens of the adjustments to
    climate change?
  • ?Top 20 of the worlds population absorb 80 of
    its natural resources.
  • ?Ecological foot print
  • ?Impact of CC on poor, women and indigenous
    peoples
  • Expectations by developing countries
  • ?Need for the re-allocation of global
    distribution of emission rights and obligations
    and compensation for losses and adjustment
    burdens.
  • ?The North pays for and subsidizes the Souths
    climate change engendered transformation to a low
    carbon economy.
  • ?The North should pay the extra cost of climate
    change mitigation.
  • Specifically, the south has consistently
    maintained that the North compensate it for its
    overuse of environmental space. reference

14
Controversies in climate change financing
  • D. HOW? Funding delivery mechanisms.
  • ? Developed countries prefer to use
  • ? Own bilateral channels or multilateral
    financial institutions such as the World Bank
  • ?-Market driven private sector financing
  • ? Developing countries find that use of non
    UNFCCC channels
  • 1) Weakens UNFCCC
  • 2) Distort the process and rationale for the
    financial flows as donor financing through non
    and
  • 3) Violates the compensation principle.
  • Note Developing countries also have a problem
    with GEF. But it is preferred to non UNFCC
    channels such as the Bank which exposes them to
    potential debt accumulation and policy
    conditionalities

15
II. Gender and Climate Change essential linkages
  • A. (Adaptation, mitigation and technology
    (addressed in module 4-6)
  • B. Legitimacy for en-gendering climate change
    financing
  • ?CEDAW
  • ?BPFA (strategic objectives F.1, para 167, F.4
    (b) para 176 para 165k,)
  • ?ECOSOC
  • ?MEAs (Agenda 21 (chap 24), CBD, CDD) ?CSW 52
  • ?MDG (3)
  • ? the Equity basis of UNFCCC

16
Gender and Climate Change essential linkages
  • ?The Equity principle of UNFCCC provides more
    than an adequate basis for integrating a gender
    equity approach into climate change financing.
  • ?The UNFCCC as the normative framework for
    climate change financing has provisions for
    equity and enshrines the rights of developing
    countries to develop in a steady state path.
  • ? Subsequent COP decisions have consistently
    re-affirmed the idea of targeting to the most
    vulnerable.
  • However, there is no refinement on what exactly
    these are countries, regions, villages,
    individuals (Garnaud 2009).
  • ?The well accepted notion of differential
    potential across regions, communities (and
    individuals) to cope with climate induced changes
    along with differential vulnerabilities and
    adaptive capacities raises the question of
    equity and justice (TERI).

17
III. Key Messages
  • To successfully adapt and mitigate the potential
    climate change upheavals to their lives women and
    girl will require increasing stocks of resources
    well beyond the current levels.
  • They will also require continuous access to more
    dynamic flows of savings and credit to enable
    them to implement measure to climate proof and
    build climate resilience into their daily
    activities and livelihood domains.
  • There is a two-way intertwine between gender
    equality, womens empowerment and successful
    achievement of the climate change objectives of
    UNFCCC.
  • Climate change financing by providing resources
    and open up the process for greater engagement
    and benefit flow to projects that are gender
    sensitive may reinforce the trend towards gender
    equality and women s empowerment. This will also
    improve the outcome of climate objectives.
  • Climate change financing, if it creates loss of
    access and control over land and forest resources
    or otherwise exacerbate womens access to
    resources, will further marginalize women. This
    will lead to counterproductive outcomes of
    climate objectives.
  • Therefore, climate change financing instruments,
    mechanisms and processes must be made gender
    sensitive and conducive to the achievement of
    gender equality and womens empowerment goals.
  • The increasing focus on market driven financial
    instruments to manage climate poses dilemma for
    gender equality and womens empowerment.
    Financial markets are notorious for the rigidity
    of gender norms and gender biases which works to
    the disadvantage of women, especially poor women.
  • Thus great care and attention needs to be focused
    on market activities and in ensuring the gender
    sensitive government regulations of the climate
    change financing market.

18
Key Messages
  • Mitigation funding streams will present more
    challenges for integrating a gender perspective.
    But through focused attention on CDM and REDD,
    there is scope for redirecting the focus to
    community-based and womens empowerment
    programmes.
  • In the case of the carbon markets, more equitable
    burden sharing of the adjustment costs and
    benefits of transition to a low carbon economy
    could be enhanced by resort to governmental
    incentives such as tax breaks, grants and
    outright set aside programs for women and or
    indigenous groups.
  • Carbon financing such as micro-finance and MDG
    carbon funds along some of the initiatives of
    regional development banks are evolving
    potentially useful pathways to really flexible
    development and gender sensitive climate
    financing oriented mechanisms.
  • Governments play an important role in the market,
    and can redirect it towards gender- and
    development-friendly outcomes.
  • A key element in any program must include
    education, training and human resource
    development in the area of adaptation, mitigation
    and technology for girls and women.
  • Gender advocates should focus attention on
    threshold issues such as the financial, time and
    physical resource costs of adapting to climate
    change that is incurred by particular groups of
    women such as agricultural food producers and
    fisher folks.
  • A gender sensitive climate risk assessment
    framework can be used to make these costs more
    visible. This can help to provide the basis for
    securing funding for gender equality objectives
    and womens economic empowerment in the context
    of the emerging climate change financing
    architecture.
  • Such approaches are critical to the design,
    implementation of NAPAs and National
    communications strategies as well as the RAF and
    similar climate change financing assessment
    instruments.

19
Key messages
  • Gender analyses, gender audits and gender impact
    assessments are important tools for promoting
    gender equity in access to, and gender equality
    outcomes of climate change funds in IFIs,
    regional, bilateral and national levels.
  • There is a need for greater coherence of national
    and donor gender policy with development and
    climate change financing.
  • Gender analysis and perspective must be
    integrated into the more progressive reform
    proposals for COP 15 in particular, those that
    seek to promote poverty eradication and
    sustainable development

20
Part I Gender and Financial Markets brief over
view
  • Climate change financing occurs within the
    framework of the parameters, challenges and
    constraints of the global financial market. This
    is especially important given the emphasis on the
    role of private sector financing in the climate
    change financing process. Therefore it is
    important to understand the gender dynamics and
    dimension of this market.
  • ?Stylized facts on gender differential outcomes
    in the global financial market
  • ?Gender issues in climate change financing
  • Myths about women and finance whole (group
    exercise)

21
Gender Myths and Gender Realities Underlying
Global Finance
  • Dominant Myths and Assumptions.
  • ?Women are less capable of economic success than
    menservice and credit to women is different
    from men
  • ?Women are risky borrowers
  • ?Women borrow for consumption without capacity
    for repayment
  • Realities
  • ?Women, in developing countries, have higher
    repayment rates than men (97 higher).
  • ?Women also borrow for short term liquidity
    purposes and have long run cash flow for
    repayment.
  • ?Womens so-called consumption goods such as
    refrigerators and stoves are often transformed
    into capital goods that produces other goods
    (ice, cooked food and services such as storage)
    that are sold in the informal and household
    economies.
  • ?Womens ability to build capital and move into
    higher value activities are often blocked by
    asymmetry of information and high transactions
    costs.

22
Gender Segmentation in the Global financial
markets
  • ?Women tend to demand smaller loans than men
  • ?Women tend to give credit to women
  • ?Women borrow from special programs
  • ?Women face higher interest rates this is a
    function of gender based adverse selection in
    borrow.
  • ?In addition, womens lessened access and excess
    demand for credit (due to quantity rationing as
    opposed to price allocation) lead to higher
    interest rates

23
Stylized facts about gender and finance
  • Pervasive inequalities between women and men in
    access to financial services--particularly
    credit.
  • Although a growing number of policies and
    programs are arising to address the needs of the
    growing number of women business owners and their
    enterprises worldwide, access to finance is still
    the single biggest obstacle facing women
    entrepreneurs. The International Financial
    Corporation
  • Collateral requirements, high transaction costs,
    limited mobility and education, and other social
    and cultural barriers contribute to women's
    inability to obtain credit (Holt and Ribe 1991,
    and World Bank).

24
Stylized facts about gender and finance
  • Under-representation of women in financial
    decision-making
  • (Men dominate decision-making in global finance,
    )
  • Increase gender gaps in the economic positions of
    women and men
  • (women have less access to credit, financial
    assets and information than men
  • women may also higher interest and other cost
    than men for similar services)
  • Inefficient resource allocation in financial
    markets due to gender discrimination
  • (women face adverse selection insurance products
    and flow of investment funds
  • and the allocation of economic resources)
  • iv. Gender-based instability of financial
    markets
  • (Male rent seeking behavior generate moral
    hazard and crises in the financial market
  • Which may more negatively impact women in terms
    of unemployment and adjustment
  • Other adjustment burdens)
  • Financial market interface with gender is
    characterized by

25
Under-representation
  • Men dominate decision-making in global finance,
    but women experience the greatest negative
    effects of these decisions (Grown et al. 2000).
  • Womens under-representation in the formal sector
    is due to legal, regulatory, and socio-cultural
    barriers (IFC).
  • The predominant decision makers in many climate
    change institutional processes are men
    (bureaucrats, technical analysts, NGO
    representatives, extension workers and
    influential leaders at the community level, Boyd
    2002).
  • Men are biased towards providing technical
    solutions to the climate change problem and many
    men have little understanding of, or regard for,
    the concerns or interest of women (Boyd 2002).

26
Increase Gender Gaps
  • the segmentation of financial markets, high
    administrative and transaction costs on the
    supply side (credit institutions) as well as on
    the demand side (individual female borrowers as
    compared with male borrowers) work to the
    detriment of women. Women face a triple
    jeopardy
  • 1) lenders may operate from a risk assessment
    framework that assigns high probability of
    default to small producers, many of whom are
    women
  • 2) high administrative costs of extending and
    recovering small loans appropriate to the scale
    of economic activities and
  • 3) gender asymmetries in the flow of information
    about credit markets (carbon market, funding
    mechanisms).

27
Inefficient Resource Allocation in Global and
Climate Finance
  • Inefficient Resource Allocation in Global and
    Climate Finance The World Banks CIFs financing
    mechanisms (in operation in Azerbaijan and
    Georgie) injected inefficiency into the existing
    climate change architecture, which has negative
    impact on women (Zuckerman, Gender Action).
  • Perlata (2008, the Philippines) CDM mechanism
    manifest an inordinate reliance on market based
    solutions that excluded the poor.
  • This resulted from CDM processes being
    cumbersome and costly rendering small scale
    project with strong poverty alleviation impacts
    unviable and making it difficult for the poor to
    participate (Perlata 2008).
  • Carbon offset and carbon credit does not provide
    an adequate stream of accessible financing for
    the multitudinous and damaging impacts of climate
    change in the South.
  • A focus on sinks, renewable energy, energy
    efficiency, GHG capture and storage, bio
    sequestration, all of which are centered on large
    scale capital intensive projects, may in fact
    have negative impacts on the women and indigenous
    groups, in terms of its impact on their access to
    resources and ownership tenure over land and
    other natural assets.

28
Inefficient Resource Allocation in Global and
Climate Finance
  • Carbon offset and carbon credit needs to be
    weighted in terms of their effectiveness and
    efficiencies regarding social development against
    carbon taxes and other non market based
    adaptation financing measures.
  • Carbon credits are not naturally issued for the
    things women do. Many womens enterprises face
    significant structural impediments that impede
    their ability to function as sellers of carbon
    credit/offset. Apart from the aforementioned
    inefficient tendency of carbon offsetting, many
    womens projects.
  • Inefficiencies as evidenced by the backlog of
    projects, the low level of funding proposal
    through funding pipelines and the fact that after
    quite a number of years many projects are still
    in a pilot phase.

29
II. The nature and scope of global Climate change
financing
  • Reference point Financial and investment flow
  • Goal of Climate change financing architecture
  • Manage the risk of
  • Adapting (to climate change induced weather
    events---loss and damages)
  • Mitigate climate change (reduction of GHG
    emissions) and furthering the transition to low
    carbon economy.
  • Approaches to climate change financing (financial
    resource mobilization)
  • Public Financing, private financing and public
    private partnerships

30
  • Public Financing
  • The public dimension of the climate change
    financing architecture includes 1) the United
    Nations (UNFCCC/GEF), 2) the World Bank, 3) Other
    multilateral financial and development financing
    institutions, 4) a host of bilateral donors and
    5) National governments.

31
Public financing Mechanisms
32
Flexible Mechanisms
  • Under Kyoto, Annex I countries, which are
    supposed to meet targets primarily with national
    measures, can have recourse to three market based
    mechanisms. These are emissions trading (or
    carbon trading), the clean development mechanism,
    and joint implementation.
  • Market Based Mechanisms under Kyoto
  • Emissions trading Emissions trading, as set out
    in Article 17 of the Kyoto Protocol, allows
    countries that have emission units to spare -
    emissions permitted them, but not "used" - to
    sell this excess capacity to countries that are
    over their targets. Thus, a new commodity was
    created in the form of emission reductions or
    removals. Since carbon dioxide is the principal
    greenhouse gas, people speak simply of trading in
    carbon. Carbon is now tracked and traded like any
    other commodity. This is known as the "carbon
    market."
  • The Clean Development Mechanism (CDM) defined in
    Article 12 of the Protocol, allows a country with
    an emission-reduction or emission-limitation
    commitment under the Kyoto Protocol (Annex B
    Party) to implement an emission-reduction project
    in developing countries. Such projects can earn
    saleable certified emission reduction (CER)
    credits, each equivalent to one tonne of CO2,
    which can be counted towards meeting Kyoto
    targets. A CDM project activity might involve,
    for example, a rural electrification project
    using solar panels or the installation of more
    energy-efficient boilers.
  • Joint Implementation (JI) The mechanism known as
    joint implementation, defined in Article 6 of
    the Kyoto Protocol, allows a country with an
    emission reduction or limitation commitment under
    the Kyoto Protocol (Annex B Party) to earn
    emission reduction units (ERUs) from an
    emission-reduction or emission removal project in
    another Annex B Party, each equivalent to one
    tonne of CO2, which can be counted towards
    meeting its Kyoto target. Joint implementation
    offers Parties a flexible and cost-efficient
    means of fulfilling a part of their Kyoto
    commitments, while the host Party benefits from
    foreign investment and technology transfer.
  • Source UNFCCO data base

33
Bilateral and multilateral financing mechanisms
for mitigation and adaptation in developing
countries( million, exchange rates of November
2008)
34
Bilateral and multilateral financing mechanisms
for mitigation and adaptation in developing
countries( million, exchange rates of November
2008)
35
Multilateral contd
36
Bilateral
37
Bilateral
38
Bilateral

39
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  • National Financial instruments (incentives)
  • Direct payments Tax reductions subsidies
  • Price supports Feed in tariffs Rebates Grant
    programmes
  • Loan programmes Bonds
  • Production incentives
  • Government purchasing programmesInsurance
    programmes
  • Equity investments, including venture capital
  • Source Tirpak et al 2008

42
II. Private Financing (Market based mechanisms)
  • The private sector network includes foundations,
    venture capital funds, private carbon funds and a
    network of exchanges. The private sector network
    includes foundations, venture capital funds,
    private carbon funds and a network of exchanges
  • Currently the private sector finances over 80 of
    climate change related activities in the three
    broad areas of clean energy technology, renewable
    energy and carbon financing.
  • Private sector actors may invest in physical
    assets in agriculture, forestry, mining and
    industries. These are long term (direct/equity)
    investments.
  • Firms also invest in the carbon sector in carbon
    tracking, carbon trading, capture and storage
    technologies
  • Private sector actors (commercial banks,
    investment banks, utilities, industrial, and
    Insurance companies, investment houses, bond
    traders and hedgefunds) invest in short and long
    term financial assets include
  • a) assets such as bonds, loans, stocks
    certificate, and venture capital that finance
    direct investments in plants, equipment and
    facilities
  • b) a variety of climate risk (carbon and weather)
    products such as crop insurance and catastrophe
    bonds
  • c) assets that hedge against the future such as
    weather derivatives and
  • d) emission trading instruments (CERs) in the
    carbon market

43
Private Sector Financing
  • There are also a growing network of international
    development agencies (UNDP- MDG carbon fund), non
    profit including civil society organizations
    (acting as Aggregators, consultants, trading
    agencies) and philanthropic organizations who are
    active players in the market for private sector
    financial and investment.

44
Private Sector Financing
  • Micro finance is being seen as a a vehicle for
    mobilizing private resources for sustainable
    development, including climate change.
  • Grameen Bank has already begun to extend loans
    for clean energy products, such as solar home
    systems, with spin-offs to micro-enterprises,
    while further opportunities exist in cleaner
    cooking products and biofuels (DESA, 2009 p.19)

45
Market Mechanism and the CDM
  • The CDM and its associated Kyoto mechanisms
    facilitate Annex B parties to meet the
    commitments of the Protocol via domestic emission
    reductions, sink enhancements, and the purchase
    of allowances and credits, for 2008-2012.
  • CDM enables a project to generate CERs in order
    to mitigate climate change in Non Annex I
    parties it is the second largest carbon trading
    market.
  • It has managed to leverage and catalyze a number
    of projects and process in developing countries.
    These include the engagement of the MDG, in terms
    of the MDG Carbon Facility, micro finance as well
    as regional development banks into carbon trading
    activities.
  • Under the CDM, buyers from developed countries
    can acquire Certified Emission Reductions (CERs)
    for each tonne of greenhouse gas that is
    prevented from entering the atmosphere as a
    result of a CDM project in a developing country.
  • CDM can be used for any project-based activity
    which results in a reduction of greenhouse gas
    emissions compared to the baseline activity.
  • A baseline is the level of greenhouse gases that
    was emitted (or assumed to be emitted) before the
    start of the project, and serves as the basis for
    determining project emissions reductions.
  • As of end-2007, proceeds from the sale of
    emission credits from over 4, 000 CDM projects in
    the pipeline amounted to about 7.4 billion, a
    50 increase in value over 2006, and triple in
    value from 2005. (This is relatively small
    compared to the overall carbon market, which has
    risen sharply over the past few years, reaching
    60 billion in 2007 or six times its value in
    2005.)

46
The Carbon Market
47
CDM sectoral Distribution
48
CDM geographic Distribution
49
Challenges with CDM
  • CDM suffers from
  • the lack of sustainable projects or those with
    the most co-benefits (like poverty reduction,
    UNDP)
  • CDM projects dont meet the needs of less
    developed countries, nor of people who are at the
    end of the poverty chain the majority of whom
    are women.
  • CDM projects involve high transaction cost and
    high risk for small scale projects, which are
    important for poverty reduction and womens
    participation.
  • There is insufficient preparatory finance for
    project development, heavy initial up front
    costs and too long a time horizon for securing
    long term financing and turn around of project.
    Upfront financing Is needed to cover the
    completion of feasibility studies, issuance of
    permits, securing of long-term finance, and
    actual construction and commissioning, These
    factors have led to CDM financing become a
    constraint on the flow of projects in the
    carbon market.
  • Ultimately, the high transaction costs associate
    with CDMs process of elaborating a project
    development design, meeting the expenses of a
    Designate Operating Entities and other
    registration requirements for a CDM project is
    neither feasible nor cost effective for most
    small scale women operated projects. In effect,
    the current CDMs cumbersome and time consuming
    process is not gender or development friendly and
    needs to be radically reform or eliminated.
  • This defeats one of the main purposes of
    the CDM, to stimulate investment in less
    carbon-intensive growth.
  • Only special CDM projects programmes in LDCs such
    as community
  • development climate fund, bio Bio Carbon Fund
    (BioCF) and Africa Assist may provide a chance
    for participation in the international CDM market
    .

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Reform of CDM
  • There is a concerted push for reform of CDM in
    at least the following directions
  • Streamlining of applications
  • Focus on smaller projects
  • Replace its project focus with a programmatic
    and/or policy focus,
  • Shorter funding cycles
  • Lower transaction costs
  • It is hope that through such corrective measures
    the CDM can generate a greater impact in
    developing countries.
  • CDM reform could be good for gender equality and
    poverty reduction. Especially if it focus on
    household energy, food processing, environmental
    services and natural resource management.
  • Increase the voices of women and community
  • Allow for more bundling/aggegators which are
    gender inclusive.
  • Eg Grameen Shaki.

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Innovative Financing and Gender
  • Proposals include for up-scaling funds and reform
    of the post 2012 climate change architecture are
    numerous. A sampling of some of the ones that
    would seem to be amenable to or important to
    consider from a gender equality perspective
    include
  • International financial transactions such as CTT
    (at a rate of 0.5 taxes on carbon transaction
    this could yield 50 billion)
  • International levies on emissions from
    international maritime transport and aviation/air
    travel.
  • International/national auctioning of assigned
    amounts unitslevy on the proceeds from
    international emissions trading.
  • Strategic allocations of proceeds using existing
    mechanisms and enhance absorptive capacity at
    the domestic levelthis is for of adaptation
    mainstreaming governance
  • North should dedicate 1 of national stimulus
    package (totaling 1.3 billion in two years) to
    developing countries to deal with after effects
    of global financial crisis and climate change.

52
Innovative Financing Gender
  • Innovative financial instruments beyond carbon
    tax and auctioning of AAUs such as tax on
    international air traffic and maritime levy as
    well as various types and kinds of climate
    insurance are worth discussing. But it is
    important that thorough social and gender
    assessments of the likely impacts and the
    possible mechanisms for passing through the fund
    in order to facilitate targeted gender equality
    interventions are well thought out.
  • An adaptation levy on international emissions
    trading might be one way of ensuring a
    predictable flow of financing for specialized
    women funds.
  • In the case of insurance, risk management models,
    on their own, are not inherently gender neutral
    and will be implemented in a financial system
    riddle with gender biases, gender distortions and
    asymmetries that might create even more
    disadvantages for women, as a group, relative to
    men. There is therefore need for gender analysis
    of such approaches with appropriate safeguards
    built into climate insurance schemes.

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A tentative framework for assessing the gender
sensitivity of current financing mechanism and
new reform oriented proposals
  • Less than burden some criteria for accessing all
    funds.
  • Positive incentive (no economic or other forms of
    policy conditionalities).
  • Technology that is gender, social and development
    friendly and that protects the web of life and
    promotes ecological security (no disruption of
    geochemical science, carbon cycle, nitrogen
    cycles) adequate attention to traditional
    knowledge and seek to improve and enhance their
    effectiveness. (For example, rainwater
    harvesting, recharging of ground well and
    facilitating sustainable agriculture and
    development).
  • Balance between Adaptation and Mitigation in
    prioritizing funding. (In the case of developing
    countries, especially the least developing
    countries and SIDs, there may have to be a
    tilting in favour of adaptation.)
  • Mix of market based and non-market based
    financing mechanism to ensure equity of outcomes
    for the poor, the majority of whom are women
  • Promote and ensure the resiliency of the
    household economy

54
Towards a gender sensitive and gender equitable
climate change financing system
  • Recommendations
  • First, reform of the current set of mechanisms,
    such as CDM, must start with a gender sensitive
    perspective that seeks to re-oriented these
    mechanisms. In the first case, they should
    operate on a less than burdensome criteria
    This means eliminating the often onerous
    prerequisites, costly financial and human
    resource applications, registration, monitoring
    and evaluation processes.
  • Secondly, mechanisms, such as REDD, must be
    designed to handle small to medium scale
    activities with moderate economies of scale. This
    include outreach to micro, small and medium sized
    firms owned and operated by women that are
    working in the area of adaptation and mitigation
    and technology development. It should also seek
    to ensure womens and indigenous peoples access,
    control and ownership of land and forests.
  • Third, financing mechanism must promote and
    ensure household and community infrastructure
    that ease mens and womens time burden and
    reduce or eliminate their vulnerability to
    climate events. This includes the financing of
    technologies and renewable energies for the
    household sectors.
  • Fourth, there must be a focus on food self
    sufficiency and rural infrastructural
    development. This applies to both adaptation and
    mitigation financing.

55
Towards a gender sensitive and gender equitable
climate change financing system
  • Fifth, many of the recommendation above can be
    achieved by up scaling funding and creating
    special windows in the existing funds. In the
    case of CDM, there is need to widen its scope of
    operation to include more diverse project
    activities and sizes.
  • Sixth, new funds can be designed under carefully
    devised gender sensitive guidelines with
    expedited process, and to include special windows
    for MSMEs pooled projects that involves womens
    collaborative activities. A special set of Trust
    funds geared to projects that seek to bring to
    light and mitigate events and factors that
    contributes to the vulnerability of women and
    girls to climate events should be established.
    This include developing and supporting gender
    sensitive vulnerability assessment, gender
    sensitive climate risk diagnostics. Such funds
    should also have sub components that subsidies
    insurance premiums for crop and catastrophic
    damages to homes and businesses owned by poor
    women and men. Trust funds should also promote
    the provisioning of ICTs and training programs
    that teaches women how to rehabilitation and
    repair damaged household and community
    infrastructure post climate change weather
    induced events.
  • Seventh, gender sensitization of all NAPAs and
    National Communications strategies.
  • Eighth, Research on the gender differentiate
    impacts of different types of national and global
    climate change financing instruments such as cap
    and trade, carbon tax, and subsidies.

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Photo credits
  • X-ray fireworks (debris of an exploded star) -
    known as supernova remnant "E0102" for NASA's
    Chandra X-Ray Observatory.
  • Great Black Spot (bruise in Jupiters cloud)
    July 23 2009
  • NASA, ESA, H. Hammel (SSI), Jupiter Impact Team
  • Firewood or forest A girl from the Benet
    community. Credit Wambi Michael/IPS

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