Gender and Climate Change Financing

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Gender and Climate Change Financing

• Coming out of the Margins
• Mariama Williams
• mariamaw_at_hotmail.com

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

• Facts, background, controversy surrounding
  financing Climate change (UNFCCC objective)
  Equity issues in climate change financing
• Gender adaptation, mitigation and technology
  (addressed in module 4-6)
• Legitimacy for en-gendering climate change
  financing equity basis of UNFCCC
• Key messages
• Part I Gender and Financial Markets brief over
  view
• Myths about women and finance( whole group
  exercise)
• Stylized facts on gender and global finance the
  state of play in Climate finance
• Part II the architecture and governance framework
  of climate change financing
• Public financing - Private sector financing
  (Carbon Financing)
• Other forms of Private sector financing -
  Innovative Financing
• Small Group exercise with article on Gender and
  climate change financing, Philippines case study
• Part III. Details on specific Financing
  Mechanisms and Instruments
• NAPA/NCs - CDM/REDD/LULUCF - MDG carbon
  facility/ Microfinance
• Small Group exercise with Bangladeshs and
  Burundis NAPA- financing exercise
• Part IV.
• Summary/Post 2012 regime/Principles for gender
  sensitive financing framework
• Proposals for Gender-sensitizing Climate Change
  Financing
• Coming soon Gender and climate finance resources
  from GGCA

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Engendering Climate Change Finance

• Firewood or forest?
• Aim
• 1. To develop understanding of the institutional
  architecture and governance of the climate change
  financing mechanisms, particularly as it relate
  to gender equality and womens empowerment
  outcomes
• 2. To utilize this understanding to advocate for
  gender equality in the distribution and
  mobilization of climate financing funds and to
  ensure that mobilization of funds do not thwart
  womens empowerment projects.

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I. Background The bare facts

• 1.Financing need for climate change
• ? UNFCCC US 262.15 billion - 615.68 billion
  per year by 2030 (UNFCCC 2008)
• ? G77 and China (August 2008) Initial minimum
  US 278.82 - 557.64 billion per year
  (approximately equal to 0.5 1 of Annex I
  countries total GDP 2007)
• 2. Climate related funds under GEF, UNFCCC
  financing arm
• ? 10.03 billion - 10.25 billion plus a further
  18.95 billion may be forthcoming from bilateral
  (6.68 billion) and multilateral initiatives
  (12.27 billion).
• This is 1/10th of the minimum estimated
  requirement.
• 3. GAP in financing amount pledged is too low
  relative to the scale of financing needed
• 4.There is a serious need to find
  alternative/innovative sources of funding for
  both adaptation and mitigation.
• Adaptation deficit/development deficit/sustainable
  development

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Background

• 5. Scaled up financing to fill the gap should
  come from
• New and additional (to existing ODA flows)
• No double counting of ODA and climate financing
• Rationale
• 0.7 of GNP target for ODA
• UNFCCC obligated to provide financing support for
  developing countries implementation of UNFCCC.
  Funding is supposed to be adequate, additional,
  appropriate, equitable and predictable ( the
  Bali-5 principles).
• ?Adequate (compensation, not loans or other
  forms of debt incurring instruments).
• ?Additional New (not counted as part of ODA
  flows),
• ?Appropriate (polluter pays).
• ?Equitable (based on principle of common but
  differentiated responsibility and respective
  capacity).
• ?Predictable (long term guaranteed flow of
  funds).
• Financing should be consistent with the principle
  and obligations of the Convention
• ?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 factors most
  implicated with rising atmospheric green house
  gases.
• ? Under Kyoto, the rich countries committed to
  decrease GHG by 6-8 below 1990s 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 long? And,
  if and when, should more be required of the
  middle income and poorer nations?

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II. Controversies in climate change financing

• A. Tug of war overThe adaptation
  deficit/development deficit
• ?Mitigation v. Adaptation wither development.
• ?-Single-minded focused on stabilizing or
  decreasing GHG emissions and engendering the
  transformation to low carbon economy.
• Would seem to have shunted development to the
  back burner.
• ?To what extent can funds be segmented (isolate)
  for climate change from development, when in
  fact, the context of the developing countries,
  the two are inextricably intertwined. This is an
  issue for both adaptation and mitigation.
• ? Climate change is
• a) not fundamentally a technical issue (it is
  also behavioral and structural) and
• b) cannot be simply a matter of funding purely
  techno-centric climate change initiatives
  isolated from the underlying concerns of economic
  development, poverty, gender and social
  inequality.
• ?The adaptation discussion, itself, is a disguise
  form of managing the tensions around development
  (and all that it encompasses) and the climate
  change policy financing framework.
• ? The nature of the development-climate change
  nexus

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Controversies in climate change financing

• ? The nature of the development-climate change
  nexus
• ? (i). The key developmental problematic, in the
  face of climate change, is the transformation and
  growth of the productive sectors of the economy
  from one that is mainly oriented to fossil based
  energy sources towards a low carbon economy.
• ? (ii). There are also critical questions about
  how rapidly should the de-carbonization occur and
  who should pay for it.
• ?Clearly, either rapid or slower paced
  de-carbonization poses significant constraints on
  economic growth and development in the south.
• ?It also has implications for all of the
  productive sectors of the economy from
  agriculture, fishery, and forestry to industrial
  and services which also impinge on trade,
  industrial and service development, gender
  equality and poverty reduction policies and
  programs.
• ?Social development issues are also impacted
  choices must be made about the location,
  financing and climate proofing of housing and
  other human settlements, food self sufficiency
  and access to essential services (health care,
  sanitation, water).
• ?This raises the issue of land-use, land use
  change and the distribution of economic and
  social resources between women and men and among
  different communities.

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Controversies in climate change financing

• B. What needs to be funded ?
• Adaptation activities have been historically and
  systematically under funded
• Infrastructure (for all activities need to be
  funded)
• It is already the case that in the developing
  countries 70-80 of the damages caused by weather
  is to infrastructure, compared to 40 in
  developed countries, (Hart 2007).
• Annual adaptation costs for developing countries
  is estimated to range anywhere from 4-37
  billion, (Stern 2006), 28-67 billion 2030
  (UNFCCC 2007) and to 86 billion, 2015 (UNDP
  2007).
• The cost of mitigation is estimated to be about
  176 billion to 200 billion.

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Adaptation

• Adaptation 1) increase resilience decrease
  impact of disasters 3) coping and relief to
  experience when damage occurs.
• UNDP 2007 annual adaptation investment need will
  be 86 billion by 2015
• World Bank 10-40 billion by 2030 (WB 2009)

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Controversies in climate change financing

• Equity issues in climate change financing
• What is the most just and equitable distribution
  of the costs and burdens of the adjustments to
  climate change?
• ?Top 20 of the worlds population absorb 80 of
  its natural resources.
• ?Ecological foot print
• ?Impact of CC on poor, women and indigenous
  peoples
• Expectations by developing countries
• ?Need for the re-allocation of global
  distribution of emission rights and obligations
  and compensation for losses and adjustment
  burdens.
• ?The North pays for and subsidizes the Souths
  climate change engendered transformation to a low
  carbon economy.
• ?The North should pay the extra cost of climate
  change mitigation.
• Specifically, the south has consistently
  maintained that the North compensate it for its
  overuse of environmental space. reference

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Controversies in climate change financing

• D. HOW? Funding delivery mechanisms.
• ? Developed countries prefer to use
• ? Own bilateral channels or multilateral
  financial institutions such as the World Bank
• ?-Market driven private sector financing
• ? Developing countries find that use of non
  UNFCCC channels
• 1) Weakens UNFCCC
• 2) Distort the process and rationale for the
  financial flows as donor financing through non
  and
• 3) Violates the compensation principle.
• Note Developing countries also have a problem
  with GEF. But it is preferred to non UNFCC
  channels such as the Bank which exposes them to
  potential debt accumulation and policy
  conditionalities

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II. Gender and Climate Change essential linkages

• A. (Adaptation, mitigation and technology
  (addressed in module 4-6)
• B. Legitimacy for en-gendering climate change
  financing
• ?CEDAW
• ?BPFA (strategic objectives F.1, para 167, F.4
  (b) para 176 para 165k,)
• ?ECOSOC
• ?MEAs (Agenda 21 (chap 24), CBD, CDD) ?CSW 52
• ?MDG (3)
• ? the Equity basis of UNFCCC

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Gender and Climate Change essential linkages

• ?The Equity principle of UNFCCC provides more
  than an adequate basis for integrating a gender
  equity approach into climate change financing.
• ?The UNFCCC as the normative framework for
  climate change financing has provisions for
  equity and enshrines the rights of developing
  countries to develop in a steady state path.
• ? Subsequent COP decisions have consistently
  re-affirmed the idea of targeting to the most
  vulnerable.
• However, there is no refinement on what exactly
  these are countries, regions, villages,
  individuals (Garnaud 2009).
• ?The well accepted notion of differential
  potential across regions, communities (and
  individuals) to cope with climate induced changes
  along with differential vulnerabilities and
  adaptive capacities raises the question of
  equity and justice (TERI).

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III. Key Messages

• 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 current levels.
• 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 into their daily
  activities and livelihood domains.
• There is a two-way intertwine between gender
  equality, womens empowerment and successful
  achievement of the climate change objectives of
  UNFCCC.
• 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 trend towards gender
  equality and women s empowerment. This will also
  improve the outcome of climate objectives.
• Climate change financing, if it creates loss of
  access and control over land and forest resources
  or otherwise exacerbate womens access to
  resources, will further marginalize women. This
  will lead to counterproductive outcomes of
  climate objectives.
• Therefore, climate change financing instruments,
  mechanisms and processes must be made gender
  sensitive and conducive to the achievement of
  gender equality and womens empowerment goals.
• The increasing focus on market driven financial
  instruments to manage climate poses dilemma for
  gender equality and womens empowerment.
  Financial markets are notorious for the rigidity
  of gender norms and gender biases which works to
  the disadvantage of women, especially poor women.
  
• 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.

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Key Messages

• Mitigation funding streams will present more
  challenges for integrating a gender perspective.
  But through focused attention on CDM and REDD,
  there is scope for redirecting the focus to
  community-based and womens empowerment
  programmes.
• 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 governmental
  incentives such as tax breaks, grants and
  outright set aside programs for women and or
  indigenous groups.
• 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 really flexible
  development and gender sensitive climate
  financing oriented mechanisms.
• Governments play an important role in the market,
  and can redirect it towards gender- and
  development-friendly outcomes.
• 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.
• 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 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 more
  visible. This can help to provide the basis for
  securing funding for gender equality objectives
  and womens economic empowerment in the context
  of the emerging climate change financing
  architecture.
• Such approaches are critical to the design,
  implementation of NAPAs and National
  communications strategies as well as the RAF and
  similar climate change financing assessment
  instruments.

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Key messages

• Gender analyses, gender audits and gender impact
  assessments are important tools for promoting
  gender equity in access to, and gender equality
  outcomes of climate change funds in IFIs,
  regional, bilateral and national levels.
• There is a need for greater coherence of national
  and donor gender policy with development and
  climate change financing.
• Gender analysis and perspective must be
  integrated into the more progressive reform
  proposals for COP 15 in particular, those that
  seek to promote poverty eradication and
  sustainable development

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Part I Gender and Financial Markets brief over
view

• Climate change financing occurs within the
  framework of the parameters, challenges and
  constraints of the global financial market. This
  is especially important given the emphasis on the
  role of private sector financing in the climate
  change financing process. Therefore it is
  important to understand the gender dynamics and
  dimension of this market.
• ?Stylized facts on gender differential outcomes
  in the global financial market
• ?Gender issues in climate change financing
• Myths about women and finance whole (group
  exercise)

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Gender Myths and Gender Realities Underlying
Global Finance

• Dominant Myths and Assumptions.
• ?Women are less capable of economic success than
  menservice and credit to women is different
  from men
• ?Women are risky borrowers
• ?Women borrow for consumption without capacity
  for repayment
• Realities
• ?Women, in developing countries, have higher
  repayment rates than men (97 higher).
• ?Women also borrow for short term liquidity
  purposes and have long run cash flow for
  repayment.
• ?Womens so-called consumption goods such as
  refrigerators and stoves are often transformed
  into capital goods that produces other goods
  (ice, cooked food and services such as storage)
  that are sold in the informal and household
  economies.
• ?Womens ability to build capital and move into
  higher value activities are often blocked by
  asymmetry of information and high transactions
  costs.

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Gender Segmentation in the Global financial
markets

• ?Women tend to demand smaller loans than men
• ?Women tend to give credit to women
• ?Women borrow from special programs
• ?Women face higher interest rates this is a
  function of gender based adverse selection in
  borrow.
• ?In addition, womens lessened access and excess
  demand for credit (due to quantity rationing as
  opposed to price allocation) lead to higher
  interest rates

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Stylized facts about gender and finance

• Pervasive inequalities between women and men in
  access to financial services--particularly
  credit.
• Although a growing number of policies and
  programs are arising to address the needs of the
  growing number of women business owners and their
  enterprises worldwide, access to finance is still
  the single biggest obstacle facing women
  entrepreneurs. The International Financial
  Corporation
• Collateral requirements, high transaction costs,
  limited mobility and education, and other social
  and cultural barriers contribute to women's
  inability to obtain credit (Holt and Ribe 1991,
  and World Bank).

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Stylized facts about gender and finance

• Under-representation of women in financial
  decision-making
• (Men dominate decision-making in global finance,
  )
• 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)
• 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 adjustment
• Other adjustment burdens)

• Financial market interface with gender is
  characterized by

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Under-representation

• Men dominate decision-making in global finance,
  but women experience the greatest negative
  effects of these decisions (Grown et al. 2000).
• Womens under-representation in the formal sector
  is due to legal, regulatory, and socio-cultural
  barriers (IFC).
• The predominant decision makers in many climate
  change institutional processes are men
  (bureaucrats, technical analysts, NGO
  representatives, extension workers and
  influential leaders at the community level, Boyd
  2002).
• Men are biased towards providing technical
  solutions to the climate change problem and many
  men have little understanding of, or regard for,
  the concerns or interest of women (Boyd 2002).

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Increase Gender Gaps

• the segmentation of financial markets, high
  administrative and transaction costs on the
  supply side (credit institutions) as well as on
  the demand side (individual female borrowers as
  compared with male borrowers) work to the
  detriment of women. Women face a triple
  jeopardy
• 1) lenders may operate from a risk assessment
  framework that assigns high probability of
  default to small producers, many of whom are
  women
• 2) high administrative costs of extending and
  recovering small loans appropriate to the scale
  of economic activities and
• 3) gender asymmetries in the flow of information
  about credit markets (carbon market, funding
  mechanisms).

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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 Azerbaijan and
  Georgie) injected inefficiency into the existing
  climate change architecture, which has negative
  impact on women (Zuckerman, Gender Action).
• Perlata (2008, the Philippines) CDM mechanism
  manifest an inordinate reliance on market based
  solutions that excluded the poor.
• This resulted from CDM processes being
  cumbersome and costly rendering small scale
  project with strong poverty alleviation impacts
  unviable and making it difficult for the poor to
  participate (Perlata 2008).
• Carbon offset and carbon credit does not provide
  an adequate stream of accessible financing for
  the multitudinous and damaging impacts of climate
  change in the South.
• A focus on sinks, renewable energy, energy
  efficiency, GHG capture and storage, bio
  sequestration, all of which are centered on large
  scale capital intensive projects, may in fact
  have negative impacts on the women and indigenous
  groups, in terms of its impact on their access to
  resources and ownership tenure over land and
  other natural assets.

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Inefficient Resource Allocation in Global and
Climate Finance

• Carbon offset and carbon credit needs to be
  weighted in terms of their effectiveness and
  efficiencies regarding social development against
  carbon taxes and other non market based
  adaptation financing measures.
• Carbon credits are not naturally issued for the
  things women do. Many womens enterprises face
  significant structural impediments that impede
  their ability to function as sellers of carbon
  credit/offset. Apart from the aforementioned
  inefficient tendency of carbon offsetting, many
  womens projects.
• Inefficiencies as evidenced by the backlog of
  projects, the low level of funding proposal
  through funding pipelines and the fact that after
  quite a number of years many projects are still
  in a pilot phase.

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II. The nature and scope of global Climate change
financing

• Reference point Financial and investment flow
• Goal of Climate change financing architecture
• Manage the risk of
• Adapting (to climate change induced weather
  events---loss and damages)
• Mitigate climate change (reduction of GHG
  emissions) and furthering the transition to low
  carbon economy.
• Approaches to climate change financing (financial
  resource mobilization)
• Public Financing, private financing and public
  private partnerships

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

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Public financing Mechanisms
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Flexible Mechanisms

• 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
  carbon trading), the clean development mechanism,
  and joint implementation.
• Market Based Mechanisms under Kyoto
• Emissions trading 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 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, people speak simply of trading in
  carbon. Carbon is now tracked and traded like any
  other commodity. This is known as the "carbon
  market."
• The Clean Development Mechanism (CDM) defined in
  Article 12 of the Protocol, allows a 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 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 example, a rural electrification project
  using solar panels or the installation of more
  energy-efficient boilers.
• Joint Implementation (JI) 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
  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 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 benefits from
  foreign investment and technology transfer.
• Source UNFCCO data base

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Bilateral and multilateral financing mechanisms
for mitigation and adaptation in developing
countries( million, exchange rates of November
2008)
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Bilateral and multilateral financing mechanisms
for mitigation and adaptation in developing
countries( million, exchange rates of November
2008)
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Multilateral contd
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Bilateral
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Bilateral
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Bilateral

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• National Financial instruments (incentives)
• Direct payments Tax reductions subsidies
  
• Price supports Feed in tariffs Rebates Grant
  programmes
• Loan programmes Bonds
• Production incentives
• Government purchasing programmesInsurance
  programmes
• Equity investments, including venture capital
• Source Tirpak et al 2008

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II. Private Financing (Market based mechanisms)

• The private sector network includes foundations,
  venture capital funds, private carbon funds and a
  network of exchanges. The private sector network
  includes foundations, venture capital funds,
  private carbon funds and a network of exchanges
• Currently the private sector finances over 80 of
  climate change related activities in the three
  broad areas of clean energy technology, renewable
  energy and carbon financing.
• Private sector actors may invest in physical
  assets in agriculture, forestry, mining and
  industries. These are long term (direct/equity)
  investments.
• Firms also invest in the carbon sector in carbon
  tracking, carbon trading, capture and storage
  technologies
• Private sector actors (commercial banks,
  investment banks, utilities, industrial, and
  Insurance companies, investment houses, bond
  traders and hedgefunds) invest in short and long
  term financial assets include
• a) assets such as bonds, loans, stocks
  certificate, and venture capital that finance
  direct investments in plants, equipment and
  facilities
• b) a variety of climate risk (carbon and weather)
  products such as crop insurance and catastrophe
  bonds
• c) assets that hedge against the future such as
  weather derivatives and
• d) emission trading instruments (CERs) in the
  carbon market

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Private Sector Financing

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

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Private Sector Financing

• Micro finance is being seen as a a vehicle for
  mobilizing private resources for sustainable
  development, including climate change.
• Grameen Bank has already begun to extend loans
  for clean energy products, such as solar home
  systems, with spin-offs to micro-enterprises,
  while further opportunities exist in cleaner
  cooking products and biofuels (DESA, 2009 p.19)

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Market Mechanism and the CDM

• The CDM and its associated Kyoto mechanisms
  facilitate Annex B parties to meet the
  commitments of the Protocol via domestic emission
  reductions, sink enhancements, 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 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 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 carbon trading
  activities.
• Under the CDM, buyers from developed countries
  can acquire Certified Emission 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.
• CDM can be used for any project-based activity
  which results in a reduction of greenhouse gas
  emissions compared to the baseline activity.
• 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 project emissions reductions.
• 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 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 in 2007 or six times its value in
  2005.)

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The Carbon Market
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CDM sectoral Distribution
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CDM geographic Distribution
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Challenges with CDM

• CDM suffers from
• the lack of sustainable projects or those with
  the most co-benefits (like poverty reduction,
  UNDP)
• CDM projects dont 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.
• CDM projects involve high transaction cost and
  high risk for small scale projects, which are
  important for poverty reduction and womens
  participation.
• 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 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 and commissioning, These
  factors have led to CDM financing become a
  constraint on the flow of projects in the
  carbon market.
• Ultimately, the high transaction costs associate
  with CDMs process of elaborating a project
  development design, meeting the expenses of a
  Designate Operating Entities 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 CDMs cumbersome and time consuming
  process is not gender or development friendly and
  needs to be radically reform or eliminated.
• This defeats one of the main purposes of
  the CDM, to stimulate investment in less
  carbon-intensive growth.
• Only special CDM projects programmes in LDCs such
  as community
• development climate fund, bio Bio Carbon Fund
  (BioCF) and Africa Assist may provide a chance
  for participation in the international CDM market
  .

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Reform of CDM

• There is a concerted push for reform of CDM in
  at least the following directions
• Streamlining of applications
• Focus on smaller projects
• Replace its project focus with a programmatic
  and/or policy focus,
• Shorter funding cycles
• Lower transaction costs
• It is hope that through such corrective measures
  the CDM can generate a greater impact in
  developing countries.
• CDM reform could be good for gender equality and
  poverty reduction. Especially if it focus on
  household energy, food processing, environmental
  services and natural resource management.
• Increase the voices of women and community
• Allow for more bundling/aggegators which are
  gender inclusive.
• Eg Grameen Shaki.

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Innovative Financing and Gender

• Proposals include for up-scaling funds and reform
  of the post 2012 climate change architecture are
  numerous. A sampling of some of the ones that
  would seem to be amenable to or important to
  consider from a gender equality perspective
  include
• International financial transactions such as CTT
  (at a rate of 0.5 taxes on carbon transaction
  this could yield 50 billion)
• International levies on emissions from
  international maritime transport and aviation/air
  travel.
• International/national auctioning of assigned
  amounts unitslevy on the proceeds from
  international emissions trading.
• Strategic allocations of proceeds using existing
  mechanisms and enhance absorptive capacity at
  the domestic levelthis is for of adaptation
  mainstreaming governance
• North should dedicate 1 of national stimulus
  package (totaling 1.3 billion in two years) to
  developing countries to deal with after effects
  of global financial crisis and climate change.

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Innovative Financing Gender

• Innovative financial instruments beyond carbon
  tax and auctioning of AAUs such as tax on
  international air traffic and maritime levy as
  well as various types and kinds of climate
  insurance are worth discussing. But it is
  important that thorough social and gender
  assessments of the likely impacts and the
  possible mechanisms for passing through the fund
  in order to facilitate targeted gender equality
  interventions are well thought out.
• An adaptation levy on international emissions
  trading might be one way of ensuring a
  predictable flow of financing for specialized
  women funds.
• In the case of insurance, risk management models,
  on their own, are not inherently gender neutral
  and will be implemented in a financial system
  riddle with gender biases, gender distortions and
  asymmetries that might create even more
  disadvantages for women, as a group, relative to
  men. There is therefore need for gender analysis
  of such approaches with appropriate safeguards
  built into climate insurance schemes.

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

• Less than burden some criteria for accessing all
  funds.
• Positive incentive (no economic or other forms of
  policy conditionalities).
• Technology that is gender, social and development
  friendly and that protects the web of life and
  promotes ecological security (no disruption of
  geochemical science, carbon cycle, nitrogen
  cycles) adequate attention to traditional
  knowledge and seek to improve and enhance their
  effectiveness. (For example, rainwater
  harvesting, recharging of ground well and
  facilitating sustainable agriculture and
  development).
• Balance between Adaptation and Mitigation in
  prioritizing funding. (In the case of developing
  countries, especially the least developing
  countries and SIDs, there may have to be a
  tilting in favour of adaptation.)
• Mix of market based and non-market based
  financing mechanism to ensure equity of outcomes
  for the poor, the majority of whom are women
• Promote and ensure the resiliency of the
  household economy

54
Towards a gender sensitive and gender equitable
climate change financing system

• Recommendations
• 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. In the first case, they should
  operate on a less than burdensome criteria
  This means eliminating the often onerous
  prerequisites, costly financial and human
  resource applications, registration, monitoring
  and evaluation processes.
• Secondly, mechanisms, such as REDD, must be
  designed to handle small to medium scale
  activities with moderate economies of scale. This
  include outreach to micro, small and medium sized
  firms owned and operated by women that are
  working in the area of adaptation and mitigation
  and technology development. It should also seek
  to ensure womens and indigenous peoples access,
  control and ownership of land and forests.
• Third, financing mechanism must promote and
  ensure household and community infrastructure
  that ease mens and womens time burden and
  reduce or eliminate their vulnerability to
  climate events. This includes the financing of
  technologies and renewable energies for the
  household sectors.
• Fourth, there must be a focus on food self
  sufficiency and rural infrastructural
  development. This applies to both adaptation and
  mitigation financing.

55
Towards a gender sensitive and gender equitable
climate change financing system

• 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 CDM, there is need to widen its scope of
  operation to include more diverse project
  activities and sizes.
• Sixth, new funds can be designed under carefully
  devised gender sensitive guidelines with
  expedited process, and to include special windows
  for MSMEs pooled projects that involves womens
  collaborative activities. A 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 and
  girls to climate events should be established.
  This include developing and supporting gender
  sensitive vulnerability assessment, gender
  sensitive climate risk diagnostics. Such funds
  should also have sub components that subsidies
  insurance premiums for crop and catastrophic
  damages to homes and businesses owned by poor
  women and men. Trust funds should also promote
  the provisioning of ICTs and training programs
  that teaches women how to rehabilitation and
  repair damaged household and community
  infrastructure post climate change weather
  induced events.
• Seventh, gender sensitization of all NAPAs and
  National Communications strategies.
• Eighth, Research on the gender differentiate
  impacts of different types of national and global
  climate change financing instruments such as cap
  and trade, carbon tax, and subsidies.

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Photo credits

• X-ray fireworks (debris of an exploded star) -
  known as supernova remnant "E0102" for NASA's
  Chandra X-Ray Observatory.
• Great Black Spot (bruise in Jupiters cloud)
  July 23 2009
• NASA, ESA, H. Hammel (SSI), Jupiter Impact Team
• Firewood or forest A girl from the Benet
  community. Credit Wambi Michael/IPS

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