Sharing Benefits from Carbon Finance : Lessons from the Guangxi CDM Project

Carbon finance projects are often intended to be both a payment for an environmental service (PES) and an instrument to facilitate sustainable development in developing countries. To enhance livelihood objectives, these projects should benefit rura...

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Main Author:	Brodnig, Gernot
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	BARGAINING BARREN LANDS BIODIVERSITY CARBON CARBON CREDITS CARBON FINANCE CARBON MARKET CARBON SEQUESTRATION CERTIFIED EMISSION REDUCTIONS CLIMATE CLIMATE CHANGE CO2 COLLECTIVE ACTION DEVELOPING COUNTRIES ECONOMIC BENEFITS EMISSION EROSION CONTROL FERTILIZATION FOREST FOREST CARBON FOREST COMPANIES FOREST MANAGEMENT FOREST PROJECT FORESTRY FORESTRY DEVELOPMENT FORESTS GOVERNMENT POLICIES HETEROGENEITY HOLDING INCOME INSTRUMENT LABOR SUPPLY LAND OWNERS LAND USERS LIQUIDITY LIQUIDITY CONSTRAINTS MARKET PRICES MONITORING COSTS NATURAL DISASTERS NEGATIVE SHOCKS PROPERTY RIGHTS REFORESTATION REGENERATION RIVER RIVER BASIN SOCIAL CAPITAL SOCIAL DEVELOPMENT SOIL SOIL EROSION TENURE TIMBER TRANSACTION TRANSACTION COSTS TREE SPECIES TREES WATERSHED WATERSHED MANAGEMENT
Online Access:	http://documents.worldbank.org/curated/en/2009/12/11857142/sharing-benefits-carbon-finance-lessons-guangxi-cdm-project http://hdl.handle.net/10986/11102

id	okr-10986-11102
recordtype	oai_dc
spelling	okr-10986-111022021-04-23T14:02:54Z Sharing Benefits from Carbon Finance : Lessons from the Guangxi CDM Project Brodnig, Gernot BARGAINING BARREN LANDS BIODIVERSITY CARBON CARBON CREDITS CARBON FINANCE CARBON MARKET CARBON SEQUESTRATION CERTIFIED EMISSION REDUCTIONS CLIMATE CLIMATE CHANGE CO2 COLLECTIVE ACTION DEVELOPING COUNTRIES ECONOMIC BENEFITS EMISSION EROSION CONTROL FERTILIZATION FOREST FOREST CARBON FOREST COMPANIES FOREST MANAGEMENT FOREST PROJECT FORESTRY FORESTRY DEVELOPMENT FORESTS GOVERNMENT POLICIES HETEROGENEITY HOLDING INCOME INSTRUMENT LABOR SUPPLY LAND OWNERS LAND USERS LIQUIDITY LIQUIDITY CONSTRAINTS MARKET PRICES MONITORING COSTS NATURAL DISASTERS NEGATIVE SHOCKS PROPERTY RIGHTS REFORESTATION REGENERATION RIVER RIVER BASIN SOCIAL CAPITAL SOCIAL DEVELOPMENT SOIL SOIL EROSION TENURE TIMBER TRANSACTION TRANSACTION COSTS TREE SPECIES TREES WATERSHED WATERSHED MANAGEMENT Carbon finance projects are often intended to be both a payment for an environmental service (PES) and an instrument to facilitate sustainable development in developing countries. To enhance livelihood objectives, these projects should benefit rural land users, provided they are willing and able to participate. This holds particularly true for forest carbon initiatives. However, high transaction costs and large uncertainties often bar local communities from making what are inherently long-term and often expensive investments. Uncertainties arise from ambiguous property rights, vague or rapidly changing government policies and unknown carbon market prices. Additionally, there are risks from human-induced and natural disasters. Since many small-scale poor land users in developing countries have only small plots of land and serious cash-flow or liquidity constraints, they cannot easily absorb negative shocks. Thus, risk acts as a formidable barrier to project participation. Pooling individual activities and signing collective contracts with groups of smallholders spreads both benefits and transaction costs over a large group and can be a practical means for small-scale land users to participate. Nonetheless, pooling requires collective action, the success of which often depends on a mix of property rights, contracts and social capital. These three components are not independent. Contracts operate within a regime of property rights and social capital can determine individuals' ability to enforce contracts through social structures. Thus, to design a successful forest carbon project, we need to understand the important roles played by social capital, property rights and contractual rules in facilitating participation. 2012-08-13T14:08:55Z 2012-08-13T14:08:55Z 2009-12 http://documents.worldbank.org/curated/en/2009/12/11857142/sharing-benefits-carbon-finance-lessons-guangxi-cdm-project http://hdl.handle.net/10986/11102 English Social Development Notes; No. 121 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Brief Publications & Research East Asia and Pacific China
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	BARGAINING BARREN LANDS BIODIVERSITY CARBON CARBON CREDITS CARBON FINANCE CARBON MARKET CARBON SEQUESTRATION CERTIFIED EMISSION REDUCTIONS CLIMATE CLIMATE CHANGE CO2 COLLECTIVE ACTION DEVELOPING COUNTRIES ECONOMIC BENEFITS EMISSION EROSION CONTROL FERTILIZATION FOREST FOREST CARBON FOREST COMPANIES FOREST MANAGEMENT FOREST PROJECT FORESTRY FORESTRY DEVELOPMENT FORESTS GOVERNMENT POLICIES HETEROGENEITY HOLDING INCOME INSTRUMENT LABOR SUPPLY LAND OWNERS LAND USERS LIQUIDITY LIQUIDITY CONSTRAINTS MARKET PRICES MONITORING COSTS NATURAL DISASTERS NEGATIVE SHOCKS PROPERTY RIGHTS REFORESTATION REGENERATION RIVER RIVER BASIN SOCIAL CAPITAL SOCIAL DEVELOPMENT SOIL SOIL EROSION TENURE TIMBER TRANSACTION TRANSACTION COSTS TREE SPECIES TREES WATERSHED WATERSHED MANAGEMENT
spellingShingle	BARGAINING BARREN LANDS BIODIVERSITY CARBON CARBON CREDITS CARBON FINANCE CARBON MARKET CARBON SEQUESTRATION CERTIFIED EMISSION REDUCTIONS CLIMATE CLIMATE CHANGE CO2 COLLECTIVE ACTION DEVELOPING COUNTRIES ECONOMIC BENEFITS EMISSION EROSION CONTROL FERTILIZATION FOREST FOREST CARBON FOREST COMPANIES FOREST MANAGEMENT FOREST PROJECT FORESTRY FORESTRY DEVELOPMENT FORESTS GOVERNMENT POLICIES HETEROGENEITY HOLDING INCOME INSTRUMENT LABOR SUPPLY LAND OWNERS LAND USERS LIQUIDITY LIQUIDITY CONSTRAINTS MARKET PRICES MONITORING COSTS NATURAL DISASTERS NEGATIVE SHOCKS PROPERTY RIGHTS REFORESTATION REGENERATION RIVER RIVER BASIN SOCIAL CAPITAL SOCIAL DEVELOPMENT SOIL SOIL EROSION TENURE TIMBER TRANSACTION TRANSACTION COSTS TREE SPECIES TREES WATERSHED WATERSHED MANAGEMENT Brodnig, Gernot Sharing Benefits from Carbon Finance : Lessons from the Guangxi CDM Project
geographic_facet	East Asia and Pacific China
relation	Social Development Notes; No. 121
description	Carbon finance projects are often intended to be both a payment for an environmental service (PES) and an instrument to facilitate sustainable development in developing countries. To enhance livelihood objectives, these projects should benefit rural land users, provided they are willing and able to participate. This holds particularly true for forest carbon initiatives. However, high transaction costs and large uncertainties often bar local communities from making what are inherently long-term and often expensive investments. Uncertainties arise from ambiguous property rights, vague or rapidly changing government policies and unknown carbon market prices. Additionally, there are risks from human-induced and natural disasters. Since many small-scale poor land users in developing countries have only small plots of land and serious cash-flow or liquidity constraints, they cannot easily absorb negative shocks. Thus, risk acts as a formidable barrier to project participation. Pooling individual activities and signing collective contracts with groups of smallholders spreads both benefits and transaction costs over a large group and can be a practical means for small-scale land users to participate. Nonetheless, pooling requires collective action, the success of which often depends on a mix of property rights, contracts and social capital. These three components are not independent. Contracts operate within a regime of property rights and social capital can determine individuals' ability to enforce contracts through social structures. Thus, to design a successful forest carbon project, we need to understand the important roles played by social capital, property rights and contractual rules in facilitating participation.
format	Publications & Research :: Brief
author	Brodnig, Gernot
author_facet	Brodnig, Gernot
author_sort	Brodnig, Gernot
title	Sharing Benefits from Carbon Finance : Lessons from the Guangxi CDM Project
title_short	Sharing Benefits from Carbon Finance : Lessons from the Guangxi CDM Project
title_full	Sharing Benefits from Carbon Finance : Lessons from the Guangxi CDM Project
title_fullStr	Sharing Benefits from Carbon Finance : Lessons from the Guangxi CDM Project
title_full_unstemmed	Sharing Benefits from Carbon Finance : Lessons from the Guangxi CDM Project
title_sort	sharing benefits from carbon finance : lessons from the guangxi cdm project
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2009/12/11857142/sharing-benefits-carbon-finance-lessons-guangxi-cdm-project http://hdl.handle.net/10986/11102
_version_	1764415534185578496

Sharing Benefits from Carbon Finance : Lessons from the Guangxi CDM Project

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