Carbon livelihoods : social opportunities and risks of carbon finance

Global concerns about climate change have led to the development of new market based mechanisms aimed at reducing the concentration of greenhouse gases (GHGs) in the atmosphere. These carbon trading schemes enable countries or entities within countries to trade 'carbon credits' in order to increase the economic efficiency of transitioning to a low carbon economy. A sub-set of these markets involve the generation of carbon credits from projects that reduce GHG emissions or increase GHG removals in developing countries. The paper first gives an overview of what carbon offset projects are and how they can be classified, as this is considered essential for understanding how the project type links to impacts. It then briefly reviews the evidence on livelihood impacts, including the approaches that have been used in determining livelihood impacts. A simple conceptual framework that is applicable to all project types is presented in section four. In section five, the World Bank portfolio is described, and in sections six and seven, evidence for the impacts on livelihood outcomes is discussed with reference to the portfolio. Sections eight and nine provide conclusions and recommendations.