Trading carbon credits for human rights: Does Article 6.4 of the Paris Agreement protect Indigenous Peoples and local communities?
A new report by the Land Matrix Initiative and Carbon Market Watch examines whether the Paris Agreement’s Article 6.4 mechanism adequately protects Indigenous Peoples and local communities from bearing the brunt of carbon market expansion.
As the Paris Agreement Crediting Mechanism (Article 6.4) gains momentum, a growing number of projects in land-intensive sectors such as renewable energy plants and afforestation or reforestation are expected to generate carbon credits. However, many of these projects could overlap with lands used or claimed by Indigenous Peoples and local communities.
Our analysis shows that these risks are not hypothetical:
- Out of the 2,147 land-intensive Article 6 pipeline projects we analysed, almost a quarter show a high risk of direct overlap with the lands of Indigenous Peoples and local communities.
- These risks are already translating into real-world harm, including land conflicts, weak consultation, and inadequate compensation.
This raises critical concerns with respect to the current setup of Article 6.4:
- The mechanism’s current Sustainable Development (SD) Tool includes only limited safeguards, increasing risks of land rights infringements. Additionally, the safeguards that do exist remain largely procedural, with key gaps in addressing real-world complexities.
- Moreover, consent-based safeguards, especially for communities lacking formal recognition and those with customary land rights, remain scarce. Even where applied, Free, Prior and Informed Consent (FPIC) is interpreted too narrowly.
The report highlights the urgent need to strengthen the SD Tool, including:
- Prioritising international human rights standards
- Expanding safeguards to all affected communities and customary rights holders
- Making consent (FPIC) a continuous requirement
- Clarifying land tenure before project approval
- Broadening compensation beyond purely economic terms
- Moving toward participatory governance and shared decision-making
The analysis of the report is clear. Carbon markets must not trade human rights for often questionable climate benefits. The UN mechanism under Article 6.4 should set up clearer rules to not repeat past mistakes and harms when setting up land-intensive projects, especially in (often remote) regions with customary tenure systems.