What You Need to Know About Social Inclusion in Results-based Climate Finance

What is social inclusion and why is it important to emissions reductions efforts? 

People are at the heart of all emissions reduction programs. Communities, companies, government, and other stakeholder groups do the work of reducing emissions by sustainably managing land and natural resources, adopting clean energy sources, and engaging in other low carbon approaches and technologies. World Bank results-based climate finance provides incentives for this action by not only paying for the carbon credits achieved, but also requiring payments be shared among all participants in a fair and socially inclusive manner. It is vital that everyone who has a stake in the process is included, can fully participate, and reap the rewards. 

Disadvantaged groups, such as women and youth, and marginalized communities, such as Indigenous Peoples, are important contributors, but biased legal systems, discrimination, and stigmatizing beliefs or perceptions can limit their participation. Social inclusion seeks to improve the ability of people disadvantaged on the basis of their identity to take part in society. For emissions reductions programs, that means working to identify and overcome barriers to participation to promote equality, enrich activities, and ensure all program participants are fairly recognized and rewarded for their efforts in reducing emissions. 

The World Bank focuses on social inclusion at every stage of result-based climate finance programming — from up-front engagement and investment in communities to enable their participation in emissions reduction activities, to the design and implementation of benefit sharing plans that guide the distribution of results-based payments. These plans are created through extensive stakeholder engagement and are important contracts for guaranteeing access to program activities and resulting benefits for historically marginalized communities and disadvantaged, and vulnerable groups.

For example, Mozambique’s program is supported by an emissions reduction payment agreement (ERPA) with the World Bank’s Forest Carbon Partnership Facility (FCPF). Integrated in the ERPA is a benefit sharing plan that allocates 70% of results-based payments to local communities engaged in sustainable land use practices to lower deforestation and associated carbon emissions. Women and youth are expected to represent at least half of total beneficiaries. 

The World Bank focuses on social inclusion at every stage of result-based climate finance programming — from up-front engagement and investment in communities to enable their participation in emissions reduction activities, to the design and implementation of benefit sharing plans that guide the distribution of results-based payments.

How does social inclusion support people and programs?

Social inclusion in emissions reduction programs is about ensuring marginalized communities and disadvantaged groups have a voice in the planning and implementation of initiatives and equal access to benefits. Their full inclusion and participation amplify the impact of these programs in three key ways:

1. These groups are motivated to maintain or achieve high-quality emission reductions that pass rigorous verification processes. Verification triggers results-based payments, which can be invested into further emission reductions measures and community activities. Communities can build a track record for generating carbon credits that can be monetized and traded in international carbon markets, enabling a continuous and amplified flow of climate finance.  

2. Well-designed, inclusive emissions reductions programs give marginalized communities and disadvantaged groups a platform for increased community involvement to address the drivers of carbon emissions and reverse trends over time. This can lead to better execution of afforestation efforts, for example, and faster uptake of clean energy technologies, like clean cooking stoves and solar panels. Integrating the insights and feedback of local people into program design and implementation also makes for more robust and effective programs. And as developing countries look to build infrastructure and institutional capacity to engage with carbon markets on their own, they can draw on this expanded pool of experienced and committed stakeholders.

3. Emissions reduction programs also generate “non-carbon benefits” considered to be positive social, environmental, and governance outcomes, like the preservation of traditional practices, protection of ecosystem services, gender empowerment, better health outcomes, and securing land tenure. Non-carbon benefits not only support the pursuit of equality for marginalized communities, but also enhance the sustainability of emissions reductions programs by reinforcing community buy-in and making local cultures more secure.

Well-designed, inclusive emissions reductions programs give marginalized communities and disadvantaged groups a platform for increased community involvement to address the drivers of carbon emissions and reverse trends over time.

What does social inclusion look like in action? 

Guided by the Bank’s Environment and Social Framework (ESF), World Bank emissions reductions programs create important opportunities to advance social inclusion and development outcomes. For example, the Bank’s new trust fund, Enabling Access to Benefits while Lowering Emissions (EnABLE), will help the government of Lao PDR bridge language, financial, and capacity gaps to meaningfully engage the 46 ethnic minority communities that reside in its emissions reduction program area. They do not speak the main Thai Lao language and their social and geographic isolation puts them at risk for exclusion. To bring them into the emissions reductions program, EnABLE will provide dedicated support to adapt communication and facilitation materials and instruments so important information can be shared in ethnic languages and in culturally appropriate and accessible ways.  

EnABLE has also teamed up with the FCPF to launch a new podcast series by and for Indigenous Peoples living in forest areas around the world. Called “Get REDDy”, it brings on local community leaders to share experiences with emissions reduction programs, demystify results-based climate finance, and empower disadvantaged and marginalized communities to be stewards of climate action on the ground. it brings on local community leaders to share experiences with emissions reduction programs, demystify results-based climate finance, and empower disadvantaged and marginalized communities to be stewards of climate action on the ground. 

EnABLE is an associated fund of the new Scaling Climate Action by Lowering Emissions (SCALE) umbrella trust fund, positioning social inclusion as a central focus in all SCALE programs. The World Bank is working top down and bottom up to ensure all people and all communities are part of building and benefiting from a low carbon future.