Gender and Climate Gender and Climate Change FinancingChange Financing

Coming out of the MarginsComing out of the Margins

Mariama WilliamsMariama Williams

mariamaw@hotmail.commariamaw@hotmail.com

Gender and Climate Change Financing: Gender and Climate Change Financing: Towards Engendering the Post 2012 financing Towards Engendering the Post 2012 financing

RegimeRegime

Facts, background, controversy surrounding financing Climate change Facts, background, controversy surrounding financing Climate change (UNFCCC objective) (UNFCCC objective) Equity issues in climate change financingEquity issues in climate change financing

Gender: adaptation, mitigation and technology (addressed in module 4-6)Gender: adaptation, mitigation and technology (addressed in module 4-6) Legitimacy for en-gendering climate change financing: equity basis of UNFCCCLegitimacy for en-gendering climate change financing: equity basis of UNFCCC Key messagesKey messages Part I: Gender and Financial Markets: brief over viewPart I: Gender and Financial Markets: brief over view Myths about women and finance( whole group exercise)Myths about women and finance( whole group exercise) Stylized facts on gender and global finance & the state of play in Climate financeStylized facts on gender and global finance & the state of play in Climate finance Part II the architecture and governance framework of climate change Part II the architecture and governance framework of climate change

financingfinancing Public financing - Private sector financing (Carbon Financing)Public financing - Private sector financing (Carbon Financing) Other forms of Private sector financing - Innovative FinancingOther forms of Private sector financing - Innovative Financing Small Group exercise with article on Gender and climate change financing, Philippines Small Group exercise with article on Gender and climate change financing, Philippines

case studycase study Part III. Details on specific Financing Mechanisms and InstrumentsPart III. Details on specific Financing Mechanisms and Instruments NAPA/NCs - CDM/REDD/LULUCF - MDG carbon facility/ MicrofinanceNAPA/NCs - CDM/REDD/LULUCF - MDG carbon facility/ Microfinance Small Group exercise with Bangladesh’s and Burundi’s NAPA- financing exerciseSmall Group exercise with Bangladesh’s and Burundi’s NAPA- financing exercise Part IV.Part IV. Summary/Post 2012 regime/Principles for gender sensitive financing frameworkSummary/Post 2012 regime/Principles for gender sensitive financing framework Proposals for Gender-sensitizing Climate Change FinancingProposals for Gender-sensitizing Climate Change Financing Coming soon: Gender and climate finance resources from GGCAComing soon: Gender and climate finance resources from GGCA

Engendering Climate Change Engendering Climate Change FinanceFinance

Firewood or forest? Firewood or forest?

Aim:Aim: 1. To develop understanding of the institutional 1. To develop understanding of the institutional

architecture and governance of the climate change architecture and governance of the climate change financing mechanisms, particularly as it relate to financing mechanisms, particularly as it relate to gender equality and women’s empowerment gender equality and women’s empowerment outcomesoutcomes

2. To utilize this understanding to advocate for gender 2. To utilize this understanding to advocate for gender equality in the distribution and mobilization of climate equality in the distribution and mobilization of climate financing funds; and to ensure that mobilization of financing funds; and to ensure that mobilization of funds do not thwart women’s empowerment projects.funds do not thwart women’s empowerment projects.

I. Background: The bare factsI. Background: The bare facts

1.Financing need for climate change:1.Financing need for climate change: ♦ ♦ UNFCCC: UNFCCC: US $262.15 billion - $615.68 billionUS $262.15 billion - $615.68 billion per year per year

by 2030 (UNFCCC 2008)by 2030 (UNFCCC 2008) ♦ ♦ G77 and China (August 2008): Initial minimum: G77 and China (August 2008): Initial minimum: US US

$278.82 - $557.64$278.82 - $557.64 billion per year (approximately equal to billion per year (approximately equal to 0.5 – 1% of Annex I countries’ total GDP 2007)0.5 – 1% of Annex I countries’ total GDP 2007)

2. Climate related funds under GEF, UNFCCC financing arm:2. Climate related funds under GEF, UNFCCC financing arm: ♦ ♦ $10.03 billion - 10.25$10.03 billion - 10.25 billion plus a further billion plus a further $18.95$18.95

billion may be forthcoming from bilateral ($6.68 billion) and billion may be forthcoming from bilateral ($6.68 billion) and multilateral initiatives ($12.27 billion). multilateral initiatives ($12.27 billion).

This is This is 1/10th1/10th of the minimum estimated requirement. of the minimum estimated requirement. 3. GAP in financing: amount pledged is too low relative to the 3. GAP in financing: amount pledged is too low relative to the

scale of financing neededscale of financing needed 4.There is a serious need to find alternative/innovative 4.There is a serious need to find alternative/innovative

sources of funding for both adaptation and mitigation.sources of funding for both adaptation and mitigation. Adaptation deficit/development deficit/sustainable Adaptation deficit/development deficit/sustainable

developmentdevelopment

Background …Background … 5. Scaled up financing to fill the gap should come from 5. Scaled up financing to fill the gap should come from New and additional (to existing ODA flows)New and additional (to existing ODA flows) No double counting of ODA and climate financingNo double counting of ODA and climate financing RationaleRationale: : 0.7% of GNP target for ODA0.7% of GNP target for ODA UNFCCC obligated to provide financing support for developing countries’ UNFCCC obligated to provide financing support for developing countries’

implementation of UNFCCC. Funding is supposed to be: adequate, additional, implementation of UNFCCC. Funding is supposed to be: adequate, additional, appropriate, equitable and predictable ( tappropriate, equitable and predictable ( the Bali-5 principles). he Bali-5 principles).

▫▫Adequate:Adequate: (compensation, not loans or other forms of debt incurring instruments). (compensation, not loans or other forms of debt incurring instruments). ▫▫Additional: NAdditional: New (not counted as part of ODA flows), ew (not counted as part of ODA flows), ▫▫Appropriate:Appropriate: (polluter pays). (polluter pays). ▫▫Equitable:Equitable: (based on principle of ‘common but differentiated responsibility and (based on principle of ‘common but differentiated responsibility and

respective capacity’).respective capacity’). ▫▫PredictablePredictable: (long term guaranteed flow of funds).: (long term guaranteed flow of funds). Financing should be consistent with the principle and obligations of the ConventionFinancing should be consistent with the principle and obligations of the Convention ▫▫The rich countries have accepted, in principle, their responsibility for their 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 predominantly large carbon foot prints and their historical role in the creation of the factors most implicated with rising atmospheric green house gases.factors most implicated with rising atmospheric green house gases.

▫▫ Under Kyoto, the rich countries committed to decrease GHG by 6-8% below 1990s Under Kyoto, the rich countries committed to decrease GHG by 6-8% below 1990s level, the developing countries were exempted from this. 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 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 long? And, if and when, should more be required of the middle income and poorer nations?nations?

II. Controversies in climate change financing II. Controversies in climate change financing

A. A. Tug of war over—The adaptation deficit/development deficit:Tug of war over—The adaptation deficit/development deficit: ▫▫Mitigation v. Adaptation: wither development.Mitigation v. Adaptation: wither development. ▫▫-Single-minded focused on stabilizing or decreasing GHG emissions and -Single-minded focused on stabilizing or decreasing GHG emissions and

engendering the transformation to low carbon economy. engendering the transformation to low carbon economy. Would seem to have shunted development to the back burner.Would seem to have shunted development to the back burner. ▫▫To what extent can funds be segmented (isolate) for climate change from To what extent can funds be segmented (isolate) for climate change from

development, when in fact, the context of the developing countries, the development, when in fact, the context of the developing countries, the two are inextricably intertwined. This is an issue for both adaptation and two are inextricably intertwined. This is an issue for both adaptation and mitigation. mitigation.

▫ ▫ Climate change is:Climate change is: a) not fundamentally a technical issue (it is also behavioral and structural) a) not fundamentally a technical issue (it is also behavioral and structural)

andand b) cannot be simply a matter of funding purely techno-centric climate b) cannot be simply a matter of funding purely techno-centric climate

change initiatives isolated from the underlying concerns of economic change initiatives isolated from the underlying concerns of economic development, poverty, gender and social inequality.development, poverty, gender and social inequality.

▫▫The adaptation discussion, itself, is a disguise form of managing the The adaptation discussion, itself, is a disguise form of managing the tensions around development (and all that it encompasses) and the tensions around development (and all that it encompasses) and the climate change policy & financing framework.climate change policy & financing framework.

▫ ▫ The nature of the dThe nature of the development-climate change nexus: evelopment-climate change nexus:

Controversies in climate change financing… Controversies in climate change financing…

▫ ▫ The nature of the dThe nature of the development-climate change nexus: evelopment-climate change nexus:

◊ ◊ (i). The key developmental problematic, in the face of climate change, is (i). The key developmental problematic, in the face of climate change, is the transformation and growth of the productive sectors of the economy the transformation and growth of the productive sectors of the economy from one that is mainly oriented to fossil based energy sources towards a from one that is mainly oriented to fossil based energy sources towards a low carbon economy. low carbon economy.

◊ ◊ (ii). There are also critical questions about how rapidly should the de-(ii). There are also critical questions about how rapidly should the de-carbonization occur and who should pay for it. carbonization occur and who should pay for it.

▬▬Clearly, either rapid or slower paced de-carbonization poses significant Clearly, either rapid or slower paced de-carbonization poses significant constraints on economic growth and development in the south. constraints on economic growth and development in the south.

▬▬It also has implications for all of the productive sectors of the economy It also has implications for all of the productive sectors of the economy from agriculture, fishery, and forestry to industrial and services which also from agriculture, fishery, and forestry to industrial and services which also impinge on trade, industrial and service development, gender equality and impinge on trade, industrial and service development, gender equality and poverty reduction policies and programs.poverty reduction policies and programs.

▬▬Social development issues are also impacted: choices must be made Social development issues are also impacted: choices must be made about the location, financing and climate proofing of housing and other about the location, financing and climate proofing of housing and other human settlements, food self sufficiency and access to essential services human settlements, food self sufficiency and access to essential services (health care, sanitation, water). (health care, sanitation, water).

►►This raises the issue of land-use, land use change and the distribution of This raises the issue of land-use, land use change and the distribution of economic and social resources between women and men and among economic and social resources between women and men and among different communities.different communities.

Controversies in climate change financing… Controversies in climate change financing…

B. What needs to be funded ?B. What needs to be funded ?

Adaptation activities have been historically and Adaptation activities have been historically and systematically under fundedsystematically under funded

Infrastructure (for all activities need to be funded)Infrastructure (for all activities need to be funded) It is already the case that in the developing countries 70-It is already the case that in the developing countries 70-

80% of the damages caused by weather is to infrastructure, 80% of the damages caused by weather is to infrastructure, compared to 40% in developed countries, (Hart 2007).compared to 40% in developed countries, (Hart 2007).

Annual adaptation costs for developing countries is Annual adaptation costs for developing countries is estimated to range anywhere from $4-37 billion, (Stern estimated to range anywhere from $4-37 billion, (Stern 2006), $28-$67 billion 2030 (UNFCCC 2007) and to $86 2006), $28-$67 billion 2030 (UNFCCC 2007) and to $86 billion, 2015 (UNDP 2007).billion, 2015 (UNDP 2007).

The cost of mitigation is estimated to be about $ 176 billion The cost of mitigation is estimated to be about $ 176 billion to $200 billion.to $200 billion.

AdaptationAdaptation

Adaptation: Adaptation: 1) increase resilience; 1) increase resilience; decrease impact of disasters 3) decrease impact of disasters 3) coping and relief to experience when coping and relief to experience when damage occurs. damage occurs.

UNDP 2007: annual adaptation UNDP 2007: annual adaptation investment need will be $86 billion investment need will be $86 billion by 2015by 2015

World Bank: $10-40 billion by 2030 World Bank: $10-40 billion by 2030 (WB 2009)(WB 2009)

Controversies in climate change financing… Controversies in climate change financing…

Equity issues in climate change financingEquity issues in climate change financing

What is the most just and equitable distribution of the costs and What is the most just and equitable distribution of the costs and burdens of the adjustments to climate change?burdens of the adjustments to climate change?

♦♦Top 20% of the world’s population absorb 80% of its natural Top 20% of the world’s population absorb 80% of its natural resources.resources.

♦♦Ecological foot printEcological foot print ♦♦Impact of CC on poor, women and indigenous peoplesImpact of CC on poor, women and indigenous peoples Expectations by developing countries:Expectations by developing countries: ►►Need for the re-allocation of global distribution of emission rights Need for the re-allocation of global distribution of emission rights

and obligations and compensation for losses and adjustment and obligations and compensation for losses and adjustment burdens.burdens.

►►The North pays for and subsidizes the South’s climate change The North pays for and subsidizes the South’s climate change engendered transformation to a low carbon economy. engendered transformation to a low carbon economy.

►►The North should pay the extra cost of climate change mitigation.The North should pay the extra cost of climate change mitigation. Specifically, the south has consistently maintained that the North Specifically, the south has consistently maintained that the North

compensate it for its ‘overuse of environmental space.’ referencecompensate it for its ‘overuse of environmental space.’ reference

Controversies in climate change financing… Controversies in climate change financing…

D. HOW? Funding delivery mechanisms.D. HOW? Funding delivery mechanisms.

♦ ♦ Developed countries prefer to use:Developed countries prefer to use: ▫ ▫ Own bilateral channels or multilateral financial institutions Own bilateral channels or multilateral financial institutions

such as the World Banksuch as the World Bank ▫▫-Market driven private sector financing-Market driven private sector financing ♦ ♦ Developing countries find that use of non UNFCCC Developing countries find that use of non UNFCCC

channels:channels: 1) Weakens UNFCCC; 1) Weakens UNFCCC; 2) Distort the process and rationale for the financial flows as 2) Distort the process and rationale for the financial flows as

donor financing through non anddonor financing through non and 3) Violates the compensation principle.3) Violates the compensation principle. NoteNote: Developing countries also have a problem with GEF*. : Developing countries also have a problem with GEF*.

But it is preferred to non UNFCC channels such as the Bank But it is preferred to non UNFCC channels such as the Bank which exposes them to potential debt accumulation and which exposes them to potential debt accumulation and policy conditionalitiespolicy conditionalities

II. Gender and Climate Change essential II. Gender and Climate Change essential linkageslinkages

A. (Adaptation, mitigation and technology A. (Adaptation, mitigation and technology (addressed in module 4-6)(addressed in module 4-6)

B. Legitimacy for en-gendering climate change B. Legitimacy for en-gendering climate change financingfinancing

◘◘CEDAWCEDAW ◘◘BPFA (strategic objectives F.1, para 167, F.4 (b) para 176; BPFA (strategic objectives F.1, para 167, F.4 (b) para 176;

para 165k,)para 165k,) ◘◘ECOSOCECOSOC ◘ ◘MEAs (Agenda 21 (chap 24), CBD, CDD) ◘CSW 52 MEAs (Agenda 21 (chap 24), CBD, CDD) ◘CSW 52 ◘◘MDG (#3)MDG (#3) ◘ ◘ the Equity basis of UNFCCCthe Equity basis of UNFCCC

Gender and Climate Change essential linkagesGender and Climate Change essential linkages

♦♦The Equity principle of UNFCCC provides more than The Equity principle of UNFCCC provides more than an adequate basis for integrating a gender equity an adequate basis for integrating a gender equity approach into climate change financing.approach into climate change financing.

♦♦The UNFCCC as the normative framework for climate The UNFCCC as the normative framework for climate change financing has provisions for equity and enshrines change financing has provisions for equity and enshrines the rights of developing countries to develop in a steady the rights of developing countries to develop in a steady state path. state path.

♦ ♦ Subsequent COP decisions have consistently re-affirmed Subsequent COP decisions have consistently re-affirmed the idea of ‘targeting to the most vulnerable.’ the idea of ‘targeting to the most vulnerable.’

However, there is no refinement on what exactly these are: However, there is no refinement on what exactly these are: countries, regions, villages, individuals (Garnaud 2009). countries, regions, villages, individuals (Garnaud 2009).

♦♦The well accepted notion of ‘differential potential across The well accepted notion of ‘differential potential across regions, communities’ (and individuals) to cope with climate regions, communities’ (and individuals) to cope with climate induced changes along with differential vulnerabilities and induced changes along with differential vulnerabilities and adaptive capacities raises the question of ‘equity’ and adaptive capacities raises the question of ‘equity’ and ‘justice’ (TERI).‘justice’ (TERI).

III. Key MessagesIII. Key Messages To successfully adapt and mitigate the potential climate change upheavals to their 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 lives women and girl will require increasing stocks of resources well beyond the current levels.current levels.

They will also require continuous access to more dynamic flows of savings and credit 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 to enable them to implement measure to climate proof and build climate resilience into their daily activities and livelihood domains. into their daily activities and livelihood domains.

There is a two-way intertwine between gender equality, women’s empowerment and There is a two-way intertwine between gender equality, women’s empowerment and successful achievement of the climate change objectives of UNFCCC.successful achievement of the climate change objectives of UNFCCC.

Climate change financing by providing resources and open up the process for greater 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 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 trend towards gender equality and women’ s empowerment. This will also improve the outcome of climate objectives.outcome of climate objectives.

Climate change financing, if it creates loss of access and control over land and forest Climate change financing, if it creates loss of access and control over land and forest resources or otherwise exacerbate women’s access to resources, will further resources or otherwise exacerbate women’s access to resources, will further marginalize women. This will lead to counterproductive outcomes of climate marginalize women. This will lead to counterproductive outcomes of climate objectives. objectives.

Therefore, climate change financing instruments, mechanisms and processes must be Therefore, climate change financing instruments, mechanisms and processes must be made gender sensitive and conducive to the achievement of gender equality and made gender sensitive and conducive to the achievement of gender equality and women’s empowerment goals.women’s empowerment goals.

The increasing focus on market driven financial instruments to manage climate poses The increasing focus on market driven financial instruments to manage climate poses dilemma for gender equality and women’s empowerment. Financial markets are dilemma for gender equality and women’s empowerment. Financial markets are notorious for the rigidity of gender norms and gender biases which works to the notorious for the rigidity of gender norms and gender biases which works to the disadvantage of women, especially poor women. disadvantage of women, especially poor women.

Thus great care and attention needs to be focused on market activities and in ensuring 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.the gender sensitive government regulations of the climate change financing market.

Key Messages…Key Messages… Mitigation funding streams will present more challenges for integrating a gender Mitigation funding streams will present more challenges for integrating a gender

perspective. But through focused attention on CDM and REDD, there is scope for perspective. But through focused attention on CDM and REDD, there is scope for redirecting the focus to community-based and women’s empowerment programmes.redirecting the focus to community-based and women’s empowerment programmes.

In the case of the carbon markets, more equitable burden sharing of the adjustment 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 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 governmental incentives such as tax breaks, grants and outright set aside programs for women and or indigenous groups.women and or indigenous groups.

Carbon financing such as micro-finance and MDG carbon funds along some of the 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 initiatives of regional development banks are evolving potentially useful pathways to really flexible development and gender sensitive climate financing oriented really flexible development and gender sensitive climate financing oriented mechanisms.mechanisms.

Governments play an important role in the market, and can redirect it towards gender- Governments play an important role in the market, and can redirect it towards gender- and development-friendly outcomes.and development-friendly outcomes.

A key element in any program must include education, training and human resource 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.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 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 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. 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 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 more visible. This can help to provide the basis for securing funding for gender equality objectives and women’s economic empowerment in the context of the emerging climate objectives and women’s economic empowerment in the context of the emerging climate change financing architecture. change financing architecture.

Such approaches are critical to the design, implementation of NAPAs and National Such approaches are critical to the design, implementation of NAPAs and National communications strategies as well as the RAF and similar climate change financing communications strategies as well as the RAF and similar climate change financing assessment instruments.assessment instruments.

Key messagesKey messages Gender analyses, gender audits and gender Gender analyses, gender audits and gender

impact assessments are important tools for impact assessments are important tools for promoting gender equity in access to, and gender promoting gender equity in access to, and gender equality outcomes of climate change funds in IFIs, equality outcomes of climate change funds in IFIs, regional, bilateral and national levels. regional, bilateral and national levels.

There is a need for greater coherence of national There is a need for greater coherence of national and donor gender policy with development and and donor gender policy with development and climate change financing. climate change financing.

Gender analysis and perspective must be Gender analysis and perspective must be integrated into the more progressive reform integrated into the more progressive reform proposals for COP 15; in particular, those that proposals for COP 15; in particular, those that seek to promote poverty eradication and seek to promote poverty eradication and sustainable developmentsustainable development

Part I: Gender and Financial Part I: Gender and Financial Markets: brief over viewMarkets: brief over view

Climate change financing occurs within the framework Climate change financing occurs within the framework of the parameters, challenges and constraints of the of the parameters, challenges and constraints of the global financial market. This is especially important global financial market. This is especially important given the emphasis on the role of private sector given the emphasis on the role of private sector financing in the climate change financing process. financing in the climate change financing process. Therefore it is important to understand the gender Therefore it is important to understand the gender dynamics and dimension of this market.dynamics and dimension of this market.

♦♦Stylized facts on gender differential outcomes in the Stylized facts on gender differential outcomes in the global financial marketglobal financial market

♦♦Gender issues in climate change financingGender issues in climate change financing Myths about women and finance whole (group Myths about women and finance whole (group

exercise)exercise)

Gender Myths and Gender Realities Gender Myths and Gender Realities Underlying Global FinanceUnderlying Global Finance

Dominant Myths and AssumptionsDominant Myths and Assumptions. . ▪▪Women are less capable of economic success than men”—Women are less capable of economic success than men”—

service and credit to women is different from men service and credit to women is different from men ▪▪Women are ‘risky borrowers’Women are ‘risky borrowers’ ▪▪Women borrow for consumption without capacity for repayment”Women borrow for consumption without capacity for repayment” RealitiesRealities ▪▪Women, in developing countries, have higher repayment rates Women, in developing countries, have higher repayment rates

than men (97% higher).than men (97% higher). ▪▪Women also borrow for short term liquidity purposes and have Women also borrow for short term liquidity purposes and have

long run cash flow for repayment. long run cash flow for repayment. ▪▪Women’s so-called ‘consumption goods’ such as refrigerators Women’s so-called ‘consumption goods’ such as refrigerators

and stoves are often transformed into capital goods that produces and stoves are often transformed into capital goods that produces other goods (ice, cooked food and services such as storage) that other goods (ice, cooked food and services such as storage) that are sold in the informal and household economies. are sold in the informal and household economies.

▪▪Women’s ability to build capital and move into higher value Women’s ability to build capital and move into higher value activities are often blocked by asymmetry of information and high activities are often blocked by asymmetry of information and high transactions costs.transactions costs.

Gender Segmentation in the Global Gender Segmentation in the Global financial marketsfinancial markets

▪▪Women tend to demand smaller loans than menWomen tend to demand smaller loans than men ▪▪Women tend to give credit to womenWomen tend to give credit to women ▪▪Women borrow from special programsWomen borrow from special programs ▪▪Women face higher interest rates: this is a Women face higher interest rates: this is a

function of gender based adverse selection in function of gender based adverse selection in borrow. borrow.

▪▪In addition, women’s lessened access and In addition, women’s lessened access and excess demand for credit (due to quantity excess demand for credit (due to quantity rationing as opposed to price allocation) lead to rationing as opposed to price allocation) lead to higher interest rates higher interest rates

Stylized facts about gender and financeStylized facts about gender and finance

Pervasive ‘inequalities between women and men in Pervasive ‘inequalities between women and men in access to financial services--particularly credit. access to financial services--particularly credit.

““AAlthough a growing number of policies and lthough a growing number of policies and programs are arising to address the needs of the programs are arising to address the needs of the growing number of women business owners and growing number of women business owners and their enterprises worldwide, access to finance is their enterprises worldwide, access to finance is still the single biggest obstacle facing women still the single biggest obstacle facing women entrepreneurs.”entrepreneurs.” The International Financial The International Financial Corporation Corporation

Collateral requirements, high transaction costs, Collateral requirements, high transaction costs, limited mobility and education, and other social and limited mobility and education, and other social and cultural barriers contribute to women's inability to cultural barriers contribute to women's inability to obtain credit obtain credit (Holt and Ribe 1991, and World Bank). (Holt and Ribe 1991, and World Bank).

Stylized facts about gender and financeStylized facts about gender and finance

Financial market interface with gender is characterized by:Financial market interface with gender is characterized by:

I. Under-representation of women in financial decision-making(Men dominate decision-making in global finance, )

ii. 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)iii. 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 adjustmentOther adjustment burdens)

Under-representationUnder-representation

Men dominate decision-making in global finance, Men dominate decision-making in global finance, but women experience the greatest negative effects but women experience the greatest negative effects of these decisions (Grown of these decisions (Grown et alet al. 2000). . 2000).

Women’s underWomen’s under-representation in the formal sector -representation in the formal sector is due to legal, regulatory, and socio-cultural is due to legal, regulatory, and socio-cultural barriers (IFC).barriers (IFC).

The predominant decision makers in many climate The predominant decision makers in many climate change institutional processes are men change institutional processes are men (bureaucrats, technical analysts, NGO (bureaucrats, technical analysts, NGO representatives, extension workers and influential representatives, extension workers and influential leaders at the community level, Boyd 2002). leaders at the community level, Boyd 2002).

Men are biased towards providing technical Men are biased towards providing technical solutions to the climate change problem and many solutions to the climate change problem and many men have little understanding of, or regard for, the men have little understanding of, or regard for, the concerns or interest of women (Boyd 2002). concerns or interest of women (Boyd 2002).

Increase Gender GapsIncrease Gender Gaps

the segmentation of financial markets, high administrative the segmentation of financial markets, high administrative and transaction costs on the supply side (credit institutions) and transaction costs on the supply side (credit institutions) as well as on the demand side (individual female borrowers as well as on the demand side (individual female borrowers as compared with male borrowers) work to the detriment of as compared with male borrowers) work to the detriment of women. Women face a triple jeopardy:women. Women face a triple jeopardy:

1) lenders may operate from a risk assessment framework 1) lenders may operate from a risk assessment framework that assigns high probability of default to small producers, that assigns high probability of default to small producers, many of whom are women;many of whom are women;

2) high administrative costs of extending and recovering 2) high administrative costs of extending and recovering small loans appropriate to the scale of economic activities small loans appropriate to the scale of economic activities andand

3) gender asymmetries in the flow of information about 3) gender asymmetries in the flow of information about

credit markets (carbon market, funding mechanisms).credit markets (carbon market, funding mechanisms).

Inefficient Resource Allocation in Global and Inefficient Resource Allocation in Global and Climate FinanceClimate Finance

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 The World Banks’ CIFs financing mechanisms (in operation in Azerbaijan and Georgie) injected inefficiency into the existing climate Azerbaijan and Georgie) injected inefficiency into the existing climate change architecture, which has negative impact on women change architecture, which has negative impact on women (Zuckerman, Gender Action). (Zuckerman, Gender Action).

Perlata (2008, the Philippines): CDM mechanism ‘manifest an Perlata (2008, the Philippines): CDM mechanism ‘manifest an inordinate reliance on market based solutions that excluded the poor’. inordinate reliance on market based solutions that excluded the poor’.

[This resulted from CDM processes being cumbersome and costly [This resulted from CDM processes being cumbersome and costly rendering small scale project with strong poverty alleviation impacts rendering small scale project with strong poverty alleviation impacts unviable and making it difficult for the poor to participate (Perlata unviable and making it difficult for the poor to participate (Perlata 2008).]2008).]

Carbon offset and carbon credit does not provide an adequate stream Carbon offset and carbon credit does not provide an adequate stream of accessible financing for the multitudinous and damaging impacts of of accessible financing for the multitudinous and damaging impacts of climate change in the South. climate change in the South.

A focus on sinks, renewable energy, energy efficiency, GHG capture A focus on sinks, renewable energy, energy efficiency, GHG capture and storage, bio sequestration, all of which are centered on large scale and storage, bio sequestration, all of which are centered on large scale capital intensive projects, may in fact have negative impacts on the capital intensive projects, may in fact have negative impacts on the women and indigenous groups, in terms of its impact on their access women and indigenous groups, in terms of its impact on their access to resources and ownership tenure over land and other natural assets. to resources and ownership tenure over land and other natural assets.

Inefficient Resource Allocation in Global Inefficient Resource Allocation in Global and Climate Financeand Climate Finance

Carbon offset and carbon credit needs to be Carbon offset and carbon credit needs to be weighted in terms of their effectiveness and weighted in terms of their effectiveness and efficiencies regarding social development against efficiencies regarding social development against carbon taxes and other non market based carbon taxes and other non market based adaptation financing measures. adaptation financing measures.

Carbon credits are not naturally issued for the Carbon credits are not naturally issued for the things women do. Many women’s enterprises face things women do. Many women’s enterprises face significant structural impediments that impede their significant structural impediments that impede their ability to function as sellers of carbon credit/offset. ability to function as sellers of carbon credit/offset. Apart from the aforementioned inefficient tendency Apart from the aforementioned inefficient tendency of carbon offsetting, many women’s projects.of carbon offsetting, many women’s projects.

Inefficiencies as evidenced by the backlog of Inefficiencies as evidenced by the backlog of projects, the low level of funding proposal through projects, the low level of funding proposal through funding pipelines and the fact that after quite a funding pipelines and the fact that after quite a number of years many projects are still in a pilot number of years many projects are still in a pilot phase.phase.

II. The nature and scope of global Climate II. The nature and scope of global Climate change financingchange financing

Reference point: Financial and investment flowReference point: Financial and investment flow

Goal of Climate change financing architecture: Goal of Climate change financing architecture: Manage the risk of:Manage the risk of:

Adapting (to climate change induced weather events---Adapting (to climate change induced weather events---loss and damages)loss and damages)

Mitigate climate change (reduction of GHG emissions) Mitigate climate change (reduction of GHG emissions) and furthering the transition to low carbon economy.and furthering the transition to low carbon economy.

Approaches to climate change financing Approaches to climate change financing (financial resource mobilization)(financial resource mobilization)

Public Financing, private financing and public private Public Financing, private financing and public private partnershipspartnerships

Public FinancingPublic Financing The public dimension of the climate The public dimension of the climate

change financing architecture change financing architecture includes: 1) the United Nations includes: 1) the United Nations (UNFCCC/GEF), 2) the World Bank, 3) (UNFCCC/GEF), 2) the World Bank, 3) Other multilateral financial and Other multilateral financial and development financing institutions, development financing institutions, 4) a host of bilateral donors and 5) 4) a host of bilateral donors and 5) National governments. National governments.

Public financing MechanismsPublic financing Mechanisms

Flexible MechanismsFlexible Mechanisms

Under Kyoto, Annex I countries, which are supposed to meet targets primarily with national 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 measures, can have recourse to three market based mechanisms. These are emissions trading (or carbon trading), the clean development mechanism, and joint implementation. carbon trading), the clean development mechanism, and joint implementation.

Market Based Mechanisms under KyotoMarket Based Mechanisms under Kyoto Emissions tradingEmissions trading: Emissions trading, as set out in Article 17 of the Kyoto Protocol, allows : 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 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 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, 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 people speak simply of trading in carbon. Carbon is now tracked and traded like any other commodity. This is known as the "carbon market."commodity. This is known as the "carbon market."

The Clean Development Mechanism (CDM):The Clean Development Mechanism (CDM): defined in Article 12 of the Protocol, allows a defined in Article 12 of the Protocol, allows a country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol 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 (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, 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 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 example, a rural electrification project using solar panels or the installation of more energy-efficient boilers. boilers.

Joint Implementation (JI):Joint Implementation (JI): The mechanism known as “joint implementation,” defined in Article 6 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 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-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 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 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 flexible and cost-efficient means of fulfilling a part of their Kyoto commitments, while the host Party benefits from foreign investment and technology transfer. benefits from foreign investment and technology transfer.

Source: UNFCCO data baseSource: UNFCCO data base

Bilateral and multilateral financing mechanisms for mitigation and Bilateral and multilateral financing mechanisms for mitigation and adaptation in developing countriesadaptation in developing countries

($ million, exchange rates of November 2008)($ million, exchange rates of November 2008)

NameName TotalTotal USUSEE

NotesNotes

Under the United Under the United NatioNationsns

Framework Convention On climate change, Framework Convention On climate change, UNFCCCUNFCCC

GEF -4GEF -4 1,0301,030 MM Time frame: 2006-2010, $352 million already Time frame: 2006-2010, $352 million already committed as of Dec. 2008committed as of Dec. 2008

Sustainable Forest Sustainable Forest

ManagementManagement 154154 MM Special program under GEF-4 for land use, land-Special program under GEF-4 for land use, land-

use change and forestry.use change and forestry.

Strategic Priority on Strategic Priority on Adaptation (SPA)Adaptation (SPA)

5050 AA Pilot program on adaptation of the GEF Trust Fund. Pilot program on adaptation of the GEF Trust Fund. All resources have been allocatedAll resources have been allocated

Special Climate Special Climate Change Fund (SCCF Change Fund (SCCF

AdaptationAdaptation

9090 AA Include pledges as of December 2008. $68 has Include pledges as of December 2008. $68 has been allocated to 15 projects as of November been allocated to 15 projects as of November 2008. Operated by GEF.2008. Operated by GEF.

Least Developed Least Developed Countries Fund Countries Fund (LDCF)(LDCF)

Adaptation FundAdaptation Fund

172172

400-400-1,5001,500

AA

AA

Include pledges as of December 2008. $91.8 has Include pledges as of December 2008. $91.8 has been received as of November 2008. Operated by been received as of November 2008. Operated by GEF.GEF.

Time frame: 2008-2012. As of October 2008, $91.3 Time frame: 2008-2012. As of October 2008, $91.3 was available (Four million CERs at was available (Four million CERs at €€17.5 per 17.5 per CER).CER).

Bilateral and multilateral financing mechanisms for mitigation and Bilateral and multilateral financing mechanisms for mitigation and adaptation in developing countriesadaptation in developing countries

($ million, exchange rates of November 2008)($ million, exchange rates of November 2008)

MultilateralMultilateral

Forest Carbon Forest Carbon Partnership, FCP Partnership, FCP (World Bank)(World Bank)

300300 MM Provides grants and loans. Provides grants and loans. Timeframe 2008-2020.Timeframe 2008-2020.

Global Facility for Global Facility for Disaster Reduction and Disaster Reduction and Recovery (GFDRR)Recovery (GFDRR)

8484 AA Provides grants. Timeframe 2007-Provides grants. Timeframe 2007-2010. Targets high-risk low and 2010. Targets high-risk low and middle income countries to middle income countries to mainstream disaster reduction in mainstream disaster reduction in development strategiesdevelopment strategies

UN Program on UN Program on Reduced Emissions Reduced Emissions from Deforestation and from Deforestation and Degradation (UN-REDD)Degradation (UN-REDD)

3535 MM Provides grants. Administered Provides grants. Administered by the UNDP. Norway, trough by the UNDP. Norway, trough its Climate and Forest its Climate and Forest Initiative, is the first donor with Initiative, is the first donor with US$12 million. US$12 million.

Sustainable Energy and Sustainable Energy and climate Change climate Change Initiative (SECCI)Initiative (SECCI)

2929 A,MA,M Provides grants and loans. The Provides grants and loans. The fund backs major investments in fund backs major investments in the development of biofuels, the development of biofuels,

renewablerenewable

Multilateral contd…Multilateral contd…Climate Climate investment Funds investment Funds (CIF):(CIF):

Clean Clean Technology FundTechnology Fund

Strategic Climate Strategic Climate FundFund

6,3406,340

4,3334,333

2,0062,006

MM

A,MA,M

Timeframe: 2009-2012. Timeframe: 2009-2012. Administered by the World Administered by the World Bank.Bank.

Provides grants and loans. The Provides grants and loans. The Fund was funded by the United Fund was funded by the United States to be administered by the States to be administered by the World Bank ($2 billion), and the World Bank ($2 billion), and the United Kingdom and Japan have United Kingdom and Japan have pledged the additional pledged the additional resources.resources.

Provides grants and loans. This Provides grants and loans. This includes the Forest Investment includes the Forest Investment Program ($58 million) and Program ($58 million) and Scaling-up Renewable Energy Scaling-up Renewable Energy ($70 million) for mitigation; and ($70 million) for mitigation; and the Pilot Program for Climate the Pilot Program for Climate Resilience ($240 million) for Resilience ($240 million) for adaptation. adaptation.

BilateralBilateral

BilateralBilateral

Cool Earth Cool Earth Partnership Partnership (Japan)(Japan)

10,0010,0000

A,MA,M Provides grants and loans. Provides grants and loans. Timeframe: 2008-2012. Up to $2 Timeframe: 2008-2012. Up to $2 billion to improve access to clean billion to improve access to clean energy, and US$8 billion for energy, and US$8 billion for preferential interest rate loans for preferential interest rate loans for

mitigation projectsmitigation projects.. Climate and Climate and Forest Forest Initiative Initiative (CIF, Norway)(CIF, Norway)

2,2502,250 MM Provides grants. Timeframe: Provides grants. Timeframe: 2008-2012. Pledged US$102 2008-2012. Pledged US$102 million to the Amazon Fund. million to the Amazon Fund.

International International Window of Window of

EnvironmentEnvironmental al TransformatiTransformation Fund on Fund (ETF-IW, UK)(ETF-IW, UK)

1,1821,182 A,MA,M Provides grants and loans. Provides grants and loans. Timeframe: 2008-2010. Most of Timeframe: 2008-2010. Most of the funds will be allocated the funds will be allocated trough the WB’s Climate trough the WB’s Climate

Investment Funds.Investment Funds.

Amazon Fund Amazon Fund (Brazil)(Brazil)

1,0001,000 MM Norway has pledged US$102. Norway has pledged US$102. Dona-tions to be administered by Dona-tions to be administered by the Brazilian National Development the Brazilian National Development

BankBank..

BilateralBilateral

International International Climate Climate Initiative (ICI, Initiative (ICI, Germany)Germany)

767644

A,MA,M Provides grants. Funding for the initiative Provides grants. Funding for the initiative will be generated from auctioning 10 will be generated from auctioning 10 percent of its allowances from the EU-percent of its allowances from the EU-ETS. It has earmarked up to €120 million ETS. It has earmarked up to €120 million for the next five years. for the next five years.

International International Forest carbon Forest carbon Initiative (IFCI, Initiative (IFCI, Australia)Australia)

121299

MM Provides grants. Timeframe 2007-2011. Provides grants. Timeframe 2007-2011. As of November 2008, US$50 million As of November 2008, US$50 million were allocated. were allocated.

UNDP-Spain UNDP-Spain MDG MDG Achievement Achievement Fund –Fund –Environmental Environmental and Climate and Climate Change Change Thematic Thematic WindowWindow

9090 A,MA,M Provides grants. Timeframe 2007-2011. Provides grants. Timeframe 2007-2011. As of November 2008, US$50 million As of November 2008, US$50 million were allocated. Provides grants. were allocated. Provides grants. Timeframe: 2007-2010. Spain has Timeframe: 2007-2010. Spain has pledged €528 to the Fund and US$90 pledged €528 to the Fund and US$90 million has been allocated for the million has been allocated for the Environment and Climate Change Environment and Climate Change thematic window. thematic window.

Bilateral…Bilateral…

Global Global Climate Climate Change Change Alliance Alliance (GCCA, EC)(GCCA, EC)

7676 A,MA,M Provides grants. Timeframe: 2007-2011. Provides grants. Timeframe: 2007-2011. Targets most vulnerable countries (least Targets most vulnerable countries (least

developed countries and small islands)developed countries and small islands)

Notes.Notes. A: Adaptation; M: Mitigation. Source: UN DESA 2009 (adapted A: Adaptation; M: Mitigation. Source: UN DESA 2009 (adapted and updated from Porter et al 2008 and UNFCCC 2007).and updated from Porter et al 2008 and UNFCCC 2007).

National Financial instruments National Financial instruments (incentives(incentives) )

~Direct payments ~Direct payments ~ Tax reductions ~ Tax reductions~subsidies~subsidies

~Price supports~Price supports ~Feed in tariffs Rebates~Feed in tariffs Rebates~Grant programmes~Grant programmes

~Loan programmes Bonds ~Loan programmes Bonds ~Production incentives ~Production incentives ~Government purchasing ~Government purchasing

programmes~Insurance programmesprogrammes~Insurance programmes ~Equity investments, including venture capital~Equity investments, including venture capital Source: Tirpak et al 2008Source: Tirpak et al 2008

II. Private Financing (Market based II. Private Financing (Market based mechanismsmechanisms))

The private sector network includes foundations, venture capital funds, The private sector network includes foundations, venture capital funds, private carbon funds and a network of exchanges. The private sector private carbon funds and a network of exchanges. The private sector network includes foundations, venture capital funds, private carbon funds network includes foundations, venture capital funds, private carbon funds and a network of exchangesand a network of exchanges

Currently the private sector finances over 80% of climate change related Currently the private sector finances over 80% of climate change related activities in the three broad areas of clean energy technology, renewable activities in the three broad areas of clean energy technology, renewable energy and carbon financing.energy and carbon financing.

Private sector actors may invest in physical assets in agriculture, forestry, Private sector actors may invest in physical assets in agriculture, forestry, mining and industries. These are long term (direct/equity) investments.mining and industries. These are long term (direct/equity) investments.

Firms also invest in the carbon sector in carbon tracking, carbon trading, Firms also invest in the carbon sector in carbon tracking, carbon trading, capture and storage technologiescapture and storage technologies

Private sector actors (commercial banks, investment banks, utilities, Private sector actors (commercial banks, investment banks, utilities, industrial, and Insurance companies, investment houses, bond traders and industrial, and Insurance companies, investment houses, bond traders and hedgefunds) invest in short and long term financial assets include:hedgefunds) invest in short and long term financial assets include:

a) assets such as bonds, loans, stocks certificate, and venture capital that a) assets such as bonds, loans, stocks certificate, and venture capital that finance direct investments in plants, equipment and facilities; finance direct investments in plants, equipment and facilities;

b) a variety of climate risk (carbon and weather) products such as crop b) a variety of climate risk (carbon and weather) products such as crop insurance and catastrophe bonds; insurance and catastrophe bonds;

c) assets that hedge against the future such as weather derivatives; andc) assets that hedge against the future such as weather derivatives; and d) emission trading instruments (CERs) in the carbon market d) emission trading instruments (CERs) in the carbon market

Private Sector Financing… Private Sector Financing…

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

Private Sector Financing…Private Sector Financing…

Micro finance is being seen as a a vehicle Micro finance is being seen as a a vehicle for mobilizing private resources for for mobilizing private resources for sustainable development, including sustainable development, including climate change.climate change.

Grameen Bank has already begun to extend Grameen Bank has already begun to extend loans for clean energy products, such as loans for clean energy products, such as solar home systems, with spin-offs to solar home systems, with spin-offs to micro-enterprises, while further micro-enterprises, while further opportunities exist in cleaner cooking opportunities exist in cleaner cooking products and biofuels (DESA, 2009 p.19)products and biofuels (DESA, 2009 p.19)

Market Mechanism and the CDMMarket Mechanism and the CDM

The CDM and its associated Kyoto mechanisms facilitate Annex B parties to meet the The CDM and its associated Kyoto mechanisms facilitate Annex B parties to meet the commitments of the Protocol via domestic emission reductions, sink enhancements, commitments of the Protocol via domestic emission reductions, sink enhancements, and the purchase of allowances and credits, for 2008-2012. 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 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. 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 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 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 MDG Carbon Facility, micro finance as well as regional development banks into carbon trading activities. carbon trading activities.

Under the CDM, buyers from developed countries can acquire Certified Emission Under the CDM, buyers from developed countries can acquire Certified Emission Reductions (CERs) for each tonne of greenhouse gas that is prevented from entering 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. 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 CDM can be used for any project-based activity which results in a reduction of greenhouse gas emissions compared to the baseline activity. greenhouse gas emissions compared to the baseline activity.

A baseline is the level of greenhouse gases that was emitted (or assumed to be 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 emitted) before the start of the project, and serves as the basis for determining project emissions reductions.project emissions reductions.

As of end-2007, proceeds from the sale of emission credits from over 4, 000 CDM 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 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 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 carbon market, which has risen sharply over the past few years, reaching $60 billion in 2007 or six times its value in 2005.) in 2007 or six times its value in 2005.)

The Carbon MarketThe Carbon Market

CDM sectoral DistributionCDM sectoral Distribution

CDM geographic DistributionCDM geographic Distribution

Challenges with CDMChallenges with CDMCDM suffers from:CDM suffers from: the lack of sustainable projects or those with the most co-benefits (like poverty the lack of sustainable projects or those with the most co-benefits (like poverty

reduction, UNDP)reduction, UNDP) CDM projects don’t meet the needs of less developed countries, nor of people who CDM projects don’t 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.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, CDM projects involve high transaction cost and high risk for small scale projects,

which are important for poverty reduction and women’s participation.which are important for poverty reduction and women’s participation. There is insufficient preparatory finance for project development, heavy initial up 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 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 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 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 and commissioning, These factors have led to CDM financing become a constraint on the flow of projects in the carbon market. the flow of projects in the carbon market.

Ultimately, the high transaction costs associate with CDM’s process of elaborating a Ultimately, the high transaction costs associate with CDM’s process of elaborating a project development design, meeting the expenses of a Designate Operating Entities project development design, meeting the expenses of a Designate Operating Entities and other registration requirements for a CDM project is neither feasible nor cost 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 CDM’s effective for most small scale women operated projects. In effect, the current CDM’s cumbersome and time consuming process is not gender or development friendly and cumbersome and time consuming process is not gender or development friendly and needs to be radically reform or eliminated.needs to be radically reform or eliminated.

This defeats one of the main purposes of the CDM, to stimulate investment in This defeats one of the main purposes of the CDM, to stimulate investment in less carbon-intensive growth.less carbon-intensive growth.

Only special CDM projects programmes in LDCs such as community Only special CDM projects programmes in LDCs such as community development climate fund, bio Bio Carbon Fund (BioCF) and Africa Assist may provide development climate fund, bio Bio Carbon Fund (BioCF) and Africa Assist may provide

a chance for participation in the international CDM market .a chance for participation in the international CDM market .

Reform of CDMReform of CDMThere is a concerted push for reform of CDMThere is a concerted push for reform of CDM in at least the following in at least the following

directions:directions: Streamlining of applicationsStreamlining of applications Focus on smaller projectsFocus on smaller projects Replace its project focus with a programmatic and/or policy focus,Replace its project focus with a programmatic and/or policy focus, Shorter funding cyclesShorter funding cycles Lower transaction costsLower transaction costs It is hope that through such corrective measures the CDM can It is hope that through such corrective measures the CDM can

generate a greater impact in developing countries.generate a greater impact in developing countries. CDM reform could be good for gender equality and poverty CDM reform could be good for gender equality and poverty

reduction. Especially if it focus on household energy, food reduction. Especially if it focus on household energy, food processing, environmental services and natural resource processing, environmental services and natural resource management.management.

Increase the voices of women and communityIncrease the voices of women and community Allow for more bundling/aggegators which are gender inclusive.Allow for more bundling/aggegators which are gender inclusive. Eg: Grameen Shaki.Eg: Grameen Shaki.

Innovative Financing and GenderInnovative Financing and Gender

Proposals include for up-scaling funds and reform of the post Proposals include for up-scaling funds and reform of the post 2012 climate change architecture are numerous. A sampling of 2012 climate change architecture are numerous. A sampling of some of the ones that would seem to be amenable to or some of the ones that would seem to be amenable to or important to consider from a gender equality perspective important to consider from a gender equality perspective include:include:

International financial transactions such as CTT (at a rate of International financial transactions such as CTT (at a rate of 0.5% taxes on carbon transaction this could yield $50 billion);0.5% taxes on carbon transaction this could yield $50 billion);

International levies on emissions from international maritime transport International levies on emissions from international maritime transport and aviation/air travel.and aviation/air travel.

International/national auctioning of assigned amounts units—levy on International/national auctioning of assigned amounts units—levy on the proceeds from international emissions trading. the proceeds from international emissions trading.

Strategic allocations of proceeds using existing mechanisms and Strategic allocations of proceeds using existing mechanisms and enhance ‘absorptive capacity’ at the domestic level—this is for of enhance ‘absorptive capacity’ at the domestic level—this is for of adaptation mainstreaming; governanceadaptation mainstreaming; governance

North should dedicate 1% of national stimulus package North should dedicate 1% of national stimulus package (totaling $1.3 billion in two years) to developing countries to (totaling $1.3 billion in two years) to developing countries to deal with after effects of global financial crisis and climate deal with after effects of global financial crisis and climate change.change.

Innovative Financing & GenderInnovative Financing & Gender Innovative financial instruments beyond carbon tax and Innovative financial instruments beyond carbon tax and

auctioning of AAUs such as tax on international air traffic and auctioning of AAUs such as tax on international air traffic and maritime levy as well as various types and kinds of climate maritime levy as well as various types and kinds of climate insurance are worth discussing. But it is important that insurance are worth discussing. But it is important that thorough social and gender assessments of the likely impacts thorough social and gender assessments of the likely impacts and the possible mechanisms for passing through the fund in and the possible mechanisms for passing through the fund in order to facilitate targeted gender equality interventions are order to facilitate targeted gender equality interventions are well thought out.well thought out.

An adaptation levy on international emissions trading might An adaptation levy on international emissions trading might be one way of ensuring a predictable flow of financing for be one way of ensuring a predictable flow of financing for specialized women funds. specialized women funds.

In the case of insurance, risk management models, on their In the case of insurance, risk management models, on their own, are not inherently gender neutral and will be own, are not inherently gender neutral and will be implemented in a financial system riddle with gender biases, implemented in a financial system riddle with gender biases, gender distortions and asymmetries that might create even gender distortions and asymmetries that might create even more disadvantages for women, as a group, relative to men. more disadvantages for women, as a group, relative to men. There is therefore need for gender analysis of such There is therefore need for gender analysis of such approaches with appropriate safeguards built into climate approaches with appropriate safeguards built into climate insurance schemes. insurance schemes.

A tentative framework for assessing the gender A tentative framework for assessing the gender sensitivity of current financing mechanism and new sensitivity of current financing mechanism and new

reform oriented proposalsreform oriented proposals Less than burden some criteria for accessing all funds.Less than burden some criteria for accessing all funds. Positive incentive (no economic or other forms of policy Positive incentive (no economic or other forms of policy

conditionalities).conditionalities). Technology that is gender, social and development friendly and Technology that is gender, social and development friendly and

that protects the web of life and promotes ecological security (no that protects the web of life and promotes ecological security (no disruption of geochemical science, carbon cycle, nitrogen cycles); disruption of geochemical science, carbon cycle, nitrogen cycles); adequate attention to traditional knowledge and seek to improve adequate attention to traditional knowledge and seek to improve and enhance their effectiveness. (For example, rainwater and enhance their effectiveness. (For example, rainwater harvesting, recharging of ground well and facilitating sustainable harvesting, recharging of ground well and facilitating sustainable agriculture and development).agriculture and development).

Balance between Adaptation and Mitigation in prioritizing funding. Balance between Adaptation and Mitigation in prioritizing funding. (In the case of developing countries, especially the least (In the case of developing countries, especially the least developing countries and SIDs, there may have to be a tilting in developing countries and SIDs, there may have to be a tilting in favour of adaptation.)favour of adaptation.)

Mix of market based and non-market based financing mechanism Mix of market based and non-market based financing mechanism to ensure equity of outcomes for the poor, the majority of whom to ensure equity of outcomes for the poor, the majority of whom are womenare women

Promote and ensure the resiliency of the household economyPromote and ensure the resiliency of the household economy

Towards a gender sensitive and gender Towards a gender sensitive and gender equitable climate change financing systemequitable climate change financing system

RecommendationsRecommendations

First, reform of the current set of mechanisms, such as CDM, must start with a 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. gender sensitive perspective that seeks to re-oriented these mechanisms. In the first case, they should operate on a ‘less than burdensomeIn the first case, they should operate on a ‘less than burdensome’ criteria’ criteria ‘ ‘ This means eliminating the often onerous prerequisites, costly financial This means eliminating the often onerous prerequisites, costly financial and human resource applications, registration, monitoring and evaluation and human resource applications, registration, monitoring and evaluation processes.processes.

Secondly, mechanisms, such as REDD, must be designed to handle small to Secondly, mechanisms, such as REDD, must be designed to handle small to medium scale activities with moderate economies of scale. This include medium scale activities with moderate economies of scale. This include outreach to micro, small and medium sized firms owned and operated by outreach to micro, small and medium sized firms owned and operated by women that are working in the area of adaptation and mitigation and women that are working in the area of adaptation and mitigation and technology development. It should also seek to ensure women’s and technology development. It should also seek to ensure women’s and indigenous people’s access, control and ownership of land and forests.indigenous people’s access, control and ownership of land and forests.

Third, financing mechanism must promote and ensure household and Third, financing mechanism must promote and ensure household and community infrastructure that ease men’s and women’s time burden and community infrastructure that ease men’s and women’s time burden and reduce or eliminate their vulnerability to climate events. This includes the reduce or eliminate their vulnerability to climate events. This includes the financing of technologies and renewable energies for the household financing of technologies and renewable energies for the household sectors. sectors.

Fourth, there must be a focus on food self sufficiency and rural infrastructural Fourth, there must be a focus on food self sufficiency and rural infrastructural development. This applies to both adaptation and mitigation financing.development. This applies to both adaptation and mitigation financing.

Towards a gender sensitive and gender Towards a gender sensitive and gender equitable climate change financing systemequitable climate change financing system

Fifth, many of the recommendation above can be achieved by up scaling 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 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 CDM, there is need to widen its scope of operation to include more diverse project activities and sizes.project activities and sizes.

Sixth, new funds can be designed under carefully devised gender sensitive Sixth, new funds can be designed under carefully devised gender sensitive guidelines with expedited process, and to include special windows for guidelines with expedited process, and to include special windows for MSMEs pooled projects that involves women’s collaborative activities. A MSMEs pooled projects that involves women’s collaborative activities. A special set of Trust funds geared to projects that seek to bring to light and 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 mitigate events and factors that contributes to the vulnerability of women and girls to climate events should be established. This include developing and girls to climate events should be established. This include developing and supporting gender sensitive vulnerability assessment, gender and supporting gender sensitive vulnerability assessment, gender sensitive climate risk diagnostics. Such funds should also have sub sensitive climate risk diagnostics. Such funds should also have sub components that subsidies insurance premiums for crop and catastrophic components that subsidies insurance premiums for crop and catastrophic damages to homes and businesses owned by poor women and men. Trust damages to homes and businesses owned by poor women and men. Trust funds should also promote the provisioning of ICTs and training programs funds should also promote the provisioning of ICTs and training programs that teaches women how to rehabilitation and repair damaged household that teaches women how to rehabilitation and repair damaged household and community infrastructure post climate change weather induced and community infrastructure post climate change weather induced events.events.

Seventh, gender sensitization of all NAPAs and National Communications Seventh, gender sensitization of all NAPAs and National Communications strategies.strategies.

Eighth, Research on the gender differentiate impacts of different types of Eighth, Research on the gender differentiate impacts of different types of national and global climate change financing instruments such as cap and national and global climate change financing instruments such as cap and trade, carbon tax, and subsidies.trade, carbon tax, and subsidies.

Photo creditsPhoto credits

X-ray fireworksX-ray fireworks (debris of an exploded star) - known as (debris of an exploded star) - known as supernova remnant "E0102" for NASA's Chandra X-Ray supernova remnant "E0102" for NASA's Chandra X-Ray

Observatory.Observatory.

Great Black Spot (“bruise in Jupiter’s cloud) July 23 2009Great Black Spot (“bruise in Jupiter’s cloud) July 23 2009

NASA, ESA, H. Hammel (SSI), Jupiter Impact TeamNASA, ESA, H. Hammel (SSI), Jupiter Impact Team

Firewood or forest: A girl from the Benet community. Credit: Firewood or forest: A girl from the Benet community. Credit: Wambi Michael/IPS Wambi Michael/IPS