Rethinking the Role of Development Banks in Climate Finance: Panama's Barro Blanco CDM Project and Human Rights
12(1) Law, Environment and Development Journal (LEAD) (2016)
21 Pages Posted: 10 Feb 2017
Date Written: December 11, 2016
One of the major threats humanity is facing in the 21st century is climate change. Its early warning signs are already visible and scientists claim that the '[w]arming of the climate system is unequivocal, and since 1950s, many of the observed changes are unprecedented over decades to millennia. The atmosphere and ocean have warmed, the amounts of snow and ice have diminished and sea level has risen.' The effects of climate change result in an inherently unjust phenomenon: those countries which have contributed less to the problem are the ones which suffer the most under its consequences. Moreover, as climate change impacts threaten lives and livelihoods across the world, it challenges the development of many regions, especially of the world’s poorest and most vulnerable populations. In recent years, development banks have adapted their operations to new local and global challenges and have increasingly invested in climate finance. Especially projects registered under the Kyoto Protocol’s Clean Development Mechanism (CDM) have received special attention. Historically, development banks have assumed that the majority of the citizens will benefit through their funding activities. However, this assumption has not been proven reliable. This paper aims at unravelling the complex interlinkages of climate finance, national and international development policies, economy and human rights. It argues that the manifold and often competing national and international legal and political layers of climate change mitigation projects, such as those under the CDM, often leave project affected people vulnerable to human rights violations without adequate safeguards and mechanism to effectively articulate their interests, protect their rights and promote access to justice. The paper firstly starts out to analyse the link between development banks and climate finance in the framework of the CDM and, secondly, elaborates on the human rights dimension of CDM projects financed by development banks. The paper discusses its findings with the example of a concrete case study, the Barro Blanco hydro-power plant in Panama, evidencing the weaknesses of the CDM system particularly from the perspective of affected persons, before it concludes in a last chapter that addressing the human rights shortcomings is especially relevant as climate finance will gain in importance in the near future.
Keywords: climate change, climate finance, development banks, Barro Blanco, indigenous peoples, FPIC, free, prior and informed consent, CDM, Clean Development Mechanism, DEG, FMO, development banks, human rights, consultation, participation
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