The formal wedding of neoliberal economic policies and climate governance was held on February 16th, 2005, when the Kyoto Protocol was ratified and the international carbon trade market was born. The Kyoto Protocol’s Clean Development Mechanism (CDM) was conceptualized with both an efficiency and a redistributive goal. Dismissed as ineffective by its critics, and hailed as the path to climate justice by its fans, the CDM and its derivative voluntary carbon market is theoretically divisive but remains strikingly understudied on the ground. In September 2012, the United Nations' announced that the CDM had prevented a billion tons of carbon dioxide equivalent from entering the atmosphere (roughly equivalent to Germany’s annual emissions in 2010) while generating about 215 billion US in developing country investments (roughly equivalent to the GDP of the Philippines in 2011). How well were the carbon reduction projects accepted by local people on site? How much of that 215 billion dollars in project investment now lines the pockets of the poor?
Given that Asia has dominated the market thus far, this study narrows its gaze to the local experience of the carbon market within Asia’s poorest recipients of carbon funds. Focusing on nine projects aimed at household level interventions (water filters, biodigesters for cooking and fertilizer production, and fuel-efficient cookstoves), the case set is stratified to compare projects that utilize carbon finance, those that switch to carbon finance, and those that rely on public funds alone. Methods include a value chain analysis and a qualitative study on how carbon finance recipients access the mechanism, perceive the project and conceptualize its success. Preliminary findings indicate that carbon finance can effectively benefit indigent households, but that such successes occur when the majority of carbon financiers are willing to run a loss. In short – the carbon market is a misleading name in least developed regions: the financial channel is more accurately effective as an aid mechanism that engenders local ownership of the project. In addition, significant debate and disagreement was identified over the definition of “climate compatible development” at every level of the carbon commodification chain; features of a “successful” carbon finance project are contested, politically informed, and dynamic.