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Exploring how the carbon market could work for the poor

June 22, 2016

Poor communities rarely benefit from global emissions trading schemes, because of the high transaction costs of participation. However, the registration of small community-scale projects to the carbon market through the Clean Development Mechanism (CDM) might be a way for low-income communities to profit from their efforts to reduce emissions.

This case study (on pages 83-85) by J. Kusumowati and N.I. Warburg examines the challenges that a community-based solid waste management project in Indonesia faces in the attempt to profit from the sale of its emission credits within the CDM scheme.

The waste deposited at most of Indonesia’s dumpsites is not treated, and greenhouse gases are emitted when untreated waste decomposes. This project tested an organic waste composting system aimed at reducing the amount of waste brought to the dumpsite and thus decreasing greenhouse gas emissions. The researchers conclude that the project provided environmental and social benefits to the poor, and could be an important pro-poor financing mechanism.

Financial barriers remain an obstacle to the full registration of this project to the CDM. But if it is successfully registered, it could open the door for other poor communities to participate in the international carbon market.

This paper was presented at the 2011 International Solid Waste Conference. It describes research results from The Carbon Market and Integrated Waste Solutions: A Case Study of Indonesia, supported by IDRC and Bremen Overseas Research Development and Assistance.