Global agreements have proliferated in the past ten years. One of these is the Kyoto Protocol, which contains provisions for emissions reductions by trading carbon through the Clean Development Mechanism (CDM). The CDM is a market-based instrument that allows companies in Annex I countries to offset their greenhouse gas emissions through energy and tree offset projects in the global South. I set out to examine the governance challenges posed by the institutional design of carbon sequestration projects under the CDM. I examine three global narratives associated with the design of CDM forest projects, specifically North–South knowledge politics, green developmentalism, and community participation, and subsequently assess how these narratives match with local practices in two projects in Latin America. Findings suggest that governance problems are operating at multiple levels and that the rhetoric of global carbon actors often asserts these schemes in one light, while the rhetoric of those who are immediately involved locally may be different. I also stress the alarmist's discourse that blames local people for the problems of environmental change. The case studies illustrate the need for vertical communication and interaction and nested governance arrangements as well as horizontal arrangements. I conclude that the global framing of forests as offsets requires better integration of local relationships to forests and their management and more effective institutions at multiple levels to link the very local to the very large scale when dealing with carbon sequestration in the CDM.
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