Empowering communities? Local stakeholders’ participation in the Clean Development Mechanism in Latin America

Under the United Nations Framework Convention on Climate Change, the Clean Development Mechanism (CDM) requires local stakeholders to participate by sharing their comments on CDM activities. This stipulation aims at promoting social equity, a key element of sustainable development. We draw on the stakeholder theory to examine the local stakeholder participatory process in CDM in four Latin American countries – Brazil, Honduras, Mexico, and Peru. We analyze 625 projects using cluster analysis and multidimensional scaling. The results confirm that in countries that have put in place national procedures for stakeholder consultation, such as Brazil and Peru, the role of national institutions is highlighted. Conversely, in countries with no national government guidelines on local stakeholder participation, such as Honduras and Mexico, private companies dominate the local stakeholder consultation process. In all the four countries, we identify a lack of community involvement in discussions and deliberations on the potential benefits of CDM projects, and a lack of participatory decision-making mechanisms. The projects we analyzed demonstrate that companies use stakeholder participation concept merely as a rhetoric tool to legitimate company activities, ostensibly to create value for all involved, but in practice providing almost no participation to the local communities. The findings also suggest the importance of national legal requirements in ensuring broad engagement at the local level. The stakeholder model established for CDM can be improved in the new market mechanism under the Paris Agreement by empowering local authorities and by formulating guidelines in domestic legal provisions for participatory processes.