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Carbon Markets Are Not the Solution: The Failed Relaunch of Emission Trading and the Clean Development Mechanism

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In light of the growing number of cold and hot wars around the world, attention to climate issues has noticeably declined, at least in Germany. Meanwhile, supposed solutions, such as carbon emission trading and the Clean Development Mechanism, continue to be promoted. As Maria Neuhauss argues, this is a bluff with far-reaching consequences.

There was more bad news in January 2025: The European Earth observation program Copernicus and the World Meteorological Organization reported that the global average temperature in 2024 was 1.6 degrees Celsius above pre-industrial levels. This marked the first time the average global temperature exceeded the 1.5-degree target established in the Paris Climate Agreement.

In light of the growing number of crises and conflict hotspots around the world, attention to climate issues has noticeably declined, at least in Germany. While 1.4 million people demonstrated for more climate protection in Germany in September 2019, according to Fridays for Future, it is now almost impossible to speak of a climate movement. The catalyst for the third German ‘movement cycle’ was undoubtedly the rebranding of Last Generation in December 2024. The group had been decimated by state repression and media agitation in the preceding months. The U.S. withdrawal from the Paris Climate Agreement at the beginning of this year made it clear that defenders of the fossil fuel status quo have gained momentum and intend to achieve their goals without compromise. However, as global greenhouse gas emissions continue to rise and the material world follows its own rules, the problem of global warming will likely resurface in the collective consciousness in the foreseeable future. Whether through heat waves, extreme weather events, water shortages, or forest fires. The question is whether and what new answers and approaches a reinvigorated climate movement will develop if it does not limit itself to ‘solidarity prepping’ and actually wants to influence the course of events.

Central to this is not only resolute resistance against fossil inertia forces, but also testing the actions of liberal actors. Although they acknowledge the problem of climate change and claim to want to solve it, the measures they take are inadequate at best or, at worst, create new profit opportunities for the industries that must be phased out. This is far from a comprehensive solution to the ecological crisis, which encompasses more than just climate change. Emission trading and the associated offset mechanisms that are part of the international climate negotiations are one example that illustrates this well.

‘Climate math’ of flexible mechanisms

Emission trading is based on the idea that greenhouse gas emissions are still possible but must be justified with corresponding ‘pollution rights.’ The number of certificates is limited and should decrease over time to reduce greenhouse gas emissions. Emission trading provides fundamental flexibility by allowing certificates to be bought and sold. Ultimately, this is intended to achieve the most cost-efficient climate protection possible because emission-reducing measures are expected to be implemented first where they can be done quickly and cheaply. This allows one to profit from selling unused emission allowances to other actors who initially shy away from such measures. These actors must buy the allowances until the increased prices resulting from the shortage make emission-reducing measures unavoidable. At least, that’s the theory.

Emission trading is closely linked to the concept of climate neutrality, which plays a central role in climate policy. Greenhouse gas emissions are offset by preventing emissions, using natural carbon sinks, or removing CO2 from the atmosphere. The trick to this ‘climate math’ is that, as long as emissions are compensated for, they do not count, even if greenhouse gases continue to be released into the air. These compensation measures are called ‘offsets.’

The idea that not all emissions must be reduced but can, in principle, be bought out of this obligation is based on the global inequalities that have developed historically and that fundamentally structured the first global climate agreement, the Kyoto Protocol of 1997. In line with the ‘common but differentiated responsibilities’ approach, the protocol only required industrialized countries to reduce emissions because they were mainly responsible for the high concentration of greenhouse gases in the atmosphere. However, under the Clean Development Mechanism (CDM), industrialized countries could partially buy their way out of this responsibility by financing emissions-reduction measures in developing and emerging countries. The CDM has therefore been described as a modern “indulgence trade” (Altvater & Brunnengräber, 2008). This allowed industrialized countries to reconcile their energy production methods with the need for climate protection while outsourcing conflicts over the energy transition, such as land use, to the Global South (Bauriedl, 2016).

Social and environmental shortcomings of the CDM

From a climate protection perspective, however, it only makes sense to include emission reductions in developing and emerging countries in the emissions balance of industrialized countries if the investments actually help reduce emissions – that is, if the projects would not have been realized without investments from the Global North. Conversely, if projects under the CDM are not additional, such as if a dam would have been built without investments from the Global North, companies in industrialized countries can claim emission credits without actually helping to reduce emissions. This is because the emissions would have been avoided anyway. This would result in an overall increase in emissions.

In fact, the additionality of many projects financed under the CDM has been questioned over the years (Öko-Institut, 2016). However, less attention has been paid to the fact that CDM projects have repeatedly led to the displacement of local people and land grabbing. For example, a reforestation project in the Kachung Central Forest Reserve in Uganda displaced many neighboring villagers who used to farm and graze their cattle there. Plagued by food insecurity, hunger, and poverty, the population was denied access to the land when CDM-approved plantations were established, further worsening their situation. The monoculture plantations also had negative ecological consequences (Carbon Market Watch, 2018). Thus, the CDM perpetuated colonial conditions on several levels. The mechanism ended with the expiration of the Kyoto Protocol in 2020. However, credits issued beforehand can still be used under the Paris Climate Agreement.

Price incentives instead of bans

A critical review of emission trading is also urgently needed. It is failing as a suitable means of climate protection on several levels. For example, in the case of the European Emissions Trading System (EU ETS), the continued generous allocation of free certificates, particularly to energy-intensive industries, protects those responsible for high CO₂ emissions from strict requirements. Additionally, the emission trading approach suffers from the fact that it is unclear whether, or to what extent, the price of emissions certificates influences investment decisions in favor of climate protection. According to various studies, the price would need to be between EUR 140 and 6,000 per ton of CO₂ to achieve the 1.5-degree target (IPCC, 2018).

However, local industry is already complaining about excessively high electricity prices (the average certificate price in 2024 was €65 per ton of CO₂), causing the government to worry about the location’s attractiveness. Given this, can we really expect politicians to force energy-intensive industries to do more to protect the climate with much higher certificate prices? Ultimately, this reveals a fundamental flaw in emission trading: its indirect effect. Instead of using targets and bans, the idea is to persuade companies to cut emissions through price incentives. However, this approach puts climate protection in the hands of actors who primarily follow the profit motive and do not necessarily translate the price signal into climate protection measures. This explains why companies enrich themselves from emission trading and the Clean Development Mechanism wherever possible (CE Delft, 2021).

For those who design and control emission trading systems, the aforementioned criticisms are merely one reason to continue supporting and refining the chosen method. This is also true for the EU, which, after a period during which emission trading was considered ineffective due to low prices, reinvigorated the system at the end of the 2010s. For instance, the EU introduced the market stability reserve. The goal is to maintain public confidence in the effectiveness of this instrument because it is the global climate protection tool. However, evaluations of its effectiveness are rare and provide little cause for optimism. According to an evaluation of various studies, the EU ETS achieves only 0 to 1.5% emission reductions per year (Green, 2021).

History and responsibility are being erased

This makes the ongoing negotiations at UN climate conferences concerning the implementation of global emission trading and a new Clean Development Mechanism all the more critical. In addition to the question of how financially weak countries will be compensated for climate-related damage and losses, the annual COPs primarily address Article 6 of the Paris Climate Agreement. Article 6 regulates international cooperation, i.e., the extent to which a country can count mitigation measures or emission avoidance elsewhere in its climate balance. Last year’s COP29 in Baku further advanced the operationalization of this article. Based on this, old CDM projects can now be transferred to the new Sustainable Development Mechanism under certain conditions. However, the first project to clear this hurdle reportedly reported emission reductions up to 26 times higher than expected based on scientific evaluation (Mulder, 2025).

Despite urgent warnings, world climate conferences seem determined to repeat past mistakes. The focus is on profit. As Tamra Gilbertson summed up in an interview with Chris Lang, the climate is the last priority. After all, trade processes will incur deductions in the future that will flow into the international adaptation fund. However, according to Gilbertson, this is also due to the fact that the climate conferences have failed to reach viable agreements on financing climate damage and adaptation measures in poorer countries thus far. Instead, emission trading is expected to deliver the necessary funds. “This is where common but differentiated responsibilities are eradicated. History and responsibility are erased, and capitalism in the form of carbon markets takes its place” (Lang, 2024).

While these processes are difficult for the public to understand, the escalating climate crisis requires critical attention more than ever. The problems associated with emission trading and the Clean Development Mechanism urgently need to be exposed as distractions from the real task at hand: rapidly phasing out fossil fuels.

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Environmental and human rights advocates are urging the world to hold global investors accountable for their actions.

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By the Witness Radio Team

Communities and organizations defending their land, livelihoods, and environment demand that global investors and development finance institutions take responsibility for projects they believe harm people and the planet.

Environmental and human rights defenders from Thailand, the Philippines, Indonesia, and India gathered at the World Bank Group Annual Meetings to share stories of communities fighting to be heard and seeking justice for harm caused by development projects.

Ms. Ueangfa Chamket, representing Chachoengsao Re: Power in Thailand, described her community’s long battle to defend the land that sustains their way of life. For over twenty years, residents have stood firm against the Burapa power plant, first proposed as a coal-fired facility and later changed to a gas-fired plant.

She explained that this region is a lifeline for farming communities, whose fields not only ensure local food security but also supply Bangkok markets with fresh produce.

“Our communities are agricultural communities which practice organic farming and later sell some of our produce in Bangkok,” she said.

Chamket voiced concerns about the power plant’s environmental impact and its effects on local livelihoods, citing air pollution, dust, and strain on water resources. She warned these threats endanger both people’s health and the biodiversity that sustains the community.

The Burapa Power Plant Project is a proposed 540 MW fossil gas-fired combined cycle power plant under construction in Khao Hin Son, Phanom Sarakham, Chachoengsao Province, Thailand. The project began in 2007 as a 600 MW coal-fired power plant awarded to Advance Agro (now Double A Power/National Power Supply, NPS), according to research from Bank Track, an international organization that tracks private-sector commercial banks and their financed activities.

Despite strong opposition from local communities and four rejections of its Environmental and Health Impact Assessments, most recently in 2016, the project remains in Thailand’s National Power Development Plans.al-fired proposal was replaced by plans for the 540-megawatt Burapa natural gas-fired power plant at the same location. The developers subsequently signed a 25-year Power Purchase Agreement with the Electricity Generating Authority of Thailand (EGAT), alongside a long-term gas supply agreement with PTT PCL.

Chamket says residents refuse more industrial development unless their concerns are addressed, stressing their determination to resist the power plant and what they see as the taking of their local resources.

Beyond environmental worries, Chamket said the community felt shut out of key decisions, from consultations to public hearings. She questioned why residents’ voices mattered less than those of powerful financiers.

“They do not hear our comments and only listen to the funders and financiers of the project. We want to share in public hearing forums, but they block us by saying there is limited time, creating a situation where we cannot report the actual situation in the area,” she said.

Similar worries have surfaced in Prachinburi province, where communities are pushing back against industrial waste incineration projects promoted under the banner of a circular economy.

The Gulf Waste-to-Energy (GWTE) Circular Economy Project aims to build and operate 12 waste-to-energy power plants across five Thai provinces: Saraburi, Ayutthaya, Prachinburi, Rayong, and Chonburi.

Mr. Ridtidat Boonyaburanakit, of the Strong Prachinburi Community Network, described how the project area supports rice, cassava, maize, and poultry farming. He said residents struggle to be heard at public hearings.

“We do not have the opportunities for public hearings,” he said.

“We do not have opportunities for public hearings,” he said. AIIB, along with other lenders, backs the project. In February 2026, the ADB announced loan agreements totaling 16.6 billion Thai baht (approximately US$511.9 million) with 12 companies indirectly owned by Gulf Waste to Energy Holdings Company Limited, a subsidiary of Gulf Development Public Company Limited (GULF), with the intention of supporting energy generation from nonhazardous industrial waste, promoting diversion from landfills, and reducing illegal waste disposal activities in Thailand.

On the ground, community leaders say the project has failed to meet its promises. Boonyaburanakit also reported security personnel intimidated residents who tried to join project discussions. Counsel Aaron Pedrosa, of the Philippine Movement for Climate Justice, highlighted the uphill battle communities face in holding investors accountable for environmental and social harm.

The Philippine Movement for Climate Justice is a coalition of more than 150 grassroots, sectoral, and other organizations working nationwide to advance climate justice.

Pedrosa said the coalition filed a case in 2017 against the International Finance Corporation (IFC), the private-sector arm of the World Bank Group, over financing linked to 19 coal power projects in the Philippines through a financial intermediary, Rizal Commercial Banking Corporation.

He explained this financing fueled the spread of coal power in the country, with 16 of 19 proposed projects ultimately built.

“This is happening in a country where for 13 years now, according to the recent Global Witness Report, we remain the deadliest place for land and defenders,” Pedrosa said, highlighting the dangers people face when defending their land and environment.

Despite the challenge of confronting powerful financial institutions, Pedrosa emphasized the need to keep fighting for accountability, vowing to persist even when justice seems out of reach in Bangkok also sparked debate over who ultimately shoulders the burden of environmental damage and climate disasters.

Sutharee WannasiSutharee Wannasiri, a senior community associate with Accountability Counsel and one of the event’s moderators, referred to recent flooding in Thailand and questioned who pays the price of such farmers cries, vendors, and families seeking shelter as those most vulnerable to the fallout, even as powerful institutions make decisions that shape their futures.

Her remarks linked communities’ opposition to individual projects to a broader concern, suggesting people facing environmental risks may have little influence over investment decisions that affect them.

Advocates demanded stronger accountability for harmful projects, insisting that affected communities must be heard and that investors and operators take responsibility for the outcomes of their choices.

Margaux Day, the policy director at Accountability Counsel, said investors could make better decisions by listening to communities with direct knowledge of their environments and livelihoods.

“Local communities are the experts in their own lives and environments, and if investors were to listen to them, then those projects would be more sustainable and successful because they would be more informed by the actual experts,” Day said.

Yet advocates argue that complaint mechanisms alone are not enough. Communities need a real voice before projects are approved, protection from intimidation when they speak up, and access to remedies when their rights and livelihoods are threatened.

“The polluter and the financier should fix it and pay for it and stop silencing the people for speaking the truth,” said Margaux Day, policy director at Accountability Counsel.

 

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Why are secure land rights key to Africa’s climate resilience and the protection of its natural treasures?

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By the Witness Radio Team.

Protecting forests, breathing new life into exhausted land, and confronting climate change hinge not only on policies but on whether those who live on the land truly hold secure rights to it.

The challenge is significant. Between 2015 and 2019, at least 100 million hectares of healthy, productive land were degraded worldwide each year, affecting about 1.3 billion people, according to the United Nations Convention to Combat Desertification (UNCCD). A 2026 global assessment by the Food and Agriculture Organization of the United Nations (FAO), the International Land Coalition (ILC), and the French agricultural research organization CIRAD found that only 35 percent of the world’s land has formally documented ownership, tenure, or use rights. These figures highlight the scale of land degradation and the gaps in recognizing and documenting people’s land rights.

Across Africa, communities depend on farmland, forests, and grazing lands not just for food, but to keep their traditions and livelihoods alive. When climate and environmental policies ignore their rights to these resources, their power to protect the land and shape its destiny fades.

This is why land rights advocates across Africa are calling for land governance to be more deeply woven into climate action and conservation, insisting that securing people’s land rights is the foundation for protecting the environment.

The issue was discussed during an online webinar organized by ILC Africa in partnership with the West African Economic and Monetary Union (UEMOA), the Economic Community of West African States (ECOWAS) and the German development agency GIZ. Practitioners and policy actors shared experiences from several African countries on integrating land governance into climate and environmental policies.

Ms. Johanna von Braun, People, Climate and Nature Lead at the International Land Coalition, explained that land rights are fundamental to achieving the objectives of the three major global environmental conventions addressing climate change, biodiversity loss and desertification.

She said secure land rights can support emissions reduction, help communities adapt to climate change and strengthen biodiversity conservation. In the Amazon, she noted, research shows that recognizing Indigenous peoples’ territories helps protect tropical forests and preserve carbon sinks.

“For mitigation, we know now that with land rights, we can ensure the protection of critical carbon sinks,” Ms. von Braun said.

Land rights are equally important for communities whose livelihoods depend on adapting to changing environmental conditions. Ms. von Braun explained that pastoralist communities with secure rights to move their livestock are better positioned to respond to climate change and manage grazing areas sustainably.

Evidence on rangeland loss reinforces this connection. Research has found that 92 percent of rangeland loss through land-use conversion between 2016 and 2024 occurred in areas where Indigenous peoples’ and local communities’ land rights were not secure, were unknown, or the land fell outside mapped community territories, facts which highlight the importance of recognizing community land rights in efforts to protect rangelands and strengthen climate resilience.

Ms. von Braun also pointed to Namibia, where communal conservancies cover about 20 percent of the country and support biodiversity conservation. She said community-based conservation initiatives can help countries advance global biodiversity commitments, including the 30×30 target to conserve at least 30 percent of the world’s land and sea by 2030.

Despite the clear connection between land rights and environmental protection, bringing land governance into national climate policies remains a persistent and difficult challenge.

Moise Mbimbe, a regional program analyst with ILC Africa, described efforts to address this gap in Burkina Faso, Liberia, Togo and Senegal.

With catalytic funding, the coalition ignited efforts to weave land governance into countries’ Nationally Determined Contributions (NDCs), which serve as blueprints for their climate commitments under the Paris Agreement. This meant reviewing policies, amplifying community voices, and bringing together a wide range of actors to shape recommendations that place land issues at the core of national climate plans.

Mr. Mbimbe said the process had helped participating countries consider land governance.

“Whether it’s in Togo, Burkina Faso or Liberia, we have made considerable progress when it comes to taking or considering land when it comes to NDCs,” he said.

In Burkina Faso, an assessment of the country’s previous climate commitments revealed that land governance had received limited attention.

Mr. Blaise Bama, coordinator of the Multi-Stakeholder Platform on Land (PMAF) in Burkina Faso, said the assessment reviewed policy documents and gathered perspectives from institutional, community, and regional stakeholders.

The findings pointed to significant gaps in how the country’s previous NDC addressed land issues.

“This assessment identified a very weak level where land was not considered in the previous NDC,” Mr. Bama said. assessment recommended recognizing the central role of land rights in climate action and securing community land rights. Mr. Bama added that local consultations allowed community-level actors to share their views and contribute to the policy process.

“It was a moment of close analysis, and these local consultations allow us to consider the opinions of local actors, especially at the community level,” he said.

In Senegal, practitioners are forging new links between land governance, environmental restoration, and active local community participation.

Ms. Nicole Chaby Hary, facilitator of the National Land Governance Platform (PNGF), said consultations revealed that land security and environmental restoration are top priorities. Yet, motivating communities to invest in restoration has proven difficult, highlighting the need for practical tools, clear responsibilities, and authentic participation.

She emphasized that women, youth, local leaders, government bodies, and all stakeholders must have a seat at the table when managing and restoring land.

“We have to put in place tools, like pastoral units, to help with consultations and community responsibilities, especially for women and youth,” Ms. Hary said.

In Madagascar, efforts are underway to ensure that community rights are reflected in biodiversity policies and implementation.

Ms. Stefana Raharijaona, a senior program officer at Natural Justice Madagascar, said the organization has worked to incorporate local communities’ concerns into national biodiversity priorities and translate them into monitorable actions.

This work has meant championing the recognition of community rights and land tenure, supporting community-led management, and striving to formalize and protect these hard-earned rights.

Ms. Raharijaona also described efforts to support implementation of Madagascar’s National Biodiversity Strategy and Action Plan, including work related to Target 22 and the establishment of a national biodiversity platform to improve coordination among the different actors involved.

Across these countries, practitioners confront a common challenge: climate and biodiversity goals will stay out of reach unless the rights of those who depend on and nurture the land are genuinely recognized.

As African nations strengthen their environmental policies, securing community land rights and ensuring meaningful participation in decision-making will be essential to protect ecosystems, heal damaged land, and build resilience to climate change.

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Biodiversity Goals: The world has no time to meet its 2030 goals.

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By the Witness Radio Team

With fewer than four years left to meet global biodiversity targets, a new United Nations assessment urges country to accelerate efforts to protect and restore nature, warning that current efforts fall short of promises.

The State of Biodiversity Action report, released just before the 17th Conference of the Parties to the Convention on Biological Diversity (COP17) in Armenia, reveals that while almost 90 percent of countries have set national biodiversity targets, less than half are making progress toward achieving them.

COP17 starts today in Yerevan, Armenia, and runs until October 30, 2026.

As the conference opens, the findings cast doubt on whether countries can fulfill the Kunming-Montreal Global Biodiversity Framework, adopted in 2022 to stop and reverse biodiversity loss by 2030.

The Framework addresses the principal drivers of biodiversity loss, including land- and sea-use change, unsustainable exploitation of species, climate change, pollution and invasive alien species, as well as economic and financial activities contributing to biodiversity loss.

A key ambition of the framework is to safeguard at least 30 percent of the world’s land and sea by 2030. The assessment reveals that current pledges fall short. Even if all commitments are met, just 26 percent of land and 12 percent of marine ecosystems would be protected by the deadline.

The gap between promises and progress was highlighted by Astrid Schomaker, Executive Secretary of the Convention on Biological Diversity, who called on governments to use the global review to identify shortcomings and accelerate implementation.

“We know where we stand. We know where the gaps are. Now we must work together to close them,” Ms. Schomaker said.

Her words highlight the conference’s core challenge. Countries know what must be done, but meaningful action is still lagging.

The assessment points to gaps in funding, coordination among government bodies, and the data needed to measure progress. It also shows that targets requiring action beyond environment ministries, such as business practices, sustainable consumption, harmful incentives, and finance, are falling furthest behind.

To meet the 2030 targets, governments must integrate biodiversity concerns into broader economic and development choices.

At the opening of COP17 on 19 October, the outgoing Colombian presidency also stressed the need to turn international agreements into practical results.

David Olarte Amaya, who represented Colombia’s COP16 presidency, described the gathering in Yerevan as a decisive moment for the planet, noting that the international community had an urgent responsibility to turn the framework’s commitments into “concrete, measurable, and lasting results.”

He also stressed that biodiversity is deeply connected to daily life, underpinning water and food security, resilient communities, thriving economies, and the well-being of society.

“Biodiversity is not merely an environmental concern but also the foundation of our water and food security, the resilience of our territories, the productivity of our economies, and the well-being of our societies,” he stressed.

He noted that the true measure of the conference’s success will not be the number of decisions made, but whether they spark real change in countries and communities.

“Today, as we hand over the COP16 presidency, Colombia reaffirms its commitment to solution-oriented multilateralism, grounded in dialogue, mutual respect among parties, and shared responsibilities. We express our confidence in Armenia’s leadership and our readiness to contribute constructively to the work of this conference,” he added.

Armenia’s Minister of Environment and incoming COP17 president, Mr. Hambardzum Matevosyan, recognized that countries must now focus on what works, where progress is lacking, and what must change to accelerate results.

“COP 15 gave us the framework. COP 16 advanced important mechanisms for its implementation. COP 17 must now help us determine where we stand, what is working, where progress is falling short, and what must change to accelerate implementation,” Mr. Matevosyan said.

He praised Colombia’s COP16 presidency and described the handover as a seamless continuation of the global push for biodiversity.

Mr. Matevosyan also highlighted the Leaders for Nature Summit in Yerevan, which concluded with the Yerevan Declaration—a call to action for nature and a reminder to turn promises into tangible outcomes.

Staying true to the promise of an inclusive COP, Matevosyan pledged that Armenia’s presidency would listen to Indigenous Peoples, local communities, women, youth, civil society, academia, local leaders, businesses, and the finance sector, recognizing that governments cannot tackle biodiversity loss on their own.

“The challenges we face are too big to be addressed by governments alone. The story, the parallel forums, thematic days, and numerous side events will inform and support negotiation outcomes,” he concluded.

As the 2030 deadline looms, the real test is whether countries can move from promises to action and deliver the transformation needed to stop and reverse biodiversity loss. The Yerevan review gives governments a chance to face the gaps, build stronger partnerships, and turn words into measurable progress for nature and all who rely on it.

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