Volume 12

Development banks are key actors in climate finance. During the last decades, they have increased the funding of climate change related projects, especially those under the Clean Development Mechanism (CDM). Defined in Article 12 of the Kyoto Protocol, the CDM aims at contributing to climate change mitigation while assisting in achieving sustainable development. However, many CDM projects have caused environmental damage and human rights abuses that especially affect the most vulnerable people. Located in Panama, the Barro Blanco hydro-power dam exemplifies the complex interrelationship of climate financing, development policies, the political and economic national context and human rights. Through the analysis of the role of development banks in climate finance, especially in the context of CDM projects, this paper aims (1) to clarify the role of development banks in climate finance, (2) to shed light on the vulnerable situation of the people affected by these projects, (3) to highlight the gaps in both the CDM rules and the development banks’ safeguard policies concerning the protection of human rights and the prevention of environmental abuses, and (4) to give a current example of this complex situation through the Barro Blanco case study. This paper argues that the manifold and often competing national and international legal and political layers of climate change mitigation projects repeatedly leave project affected people vulnerable to human rights violations without adequate safeguards and mechanisms to effectively articulate their interests, protect their rights and promote access to justice.