The Clean Development Mechanism of the UN Framework Convention for Climate Change (UNFCCC) could provide significant resources for the development of sustainable livelihood systems in poor rural areas, on the basis of GHG mitigation. However, trading in carbon offsets will not necessarily benefit the rural poor.

Firstly, unless effective systems for monitoring and regulating carbon sequestration by forestry and other land-use projects are developed, offset transfers of this type are unlikely to be permitted by the UNFCCC.

Secondly, offset projects could by undertaken in ways that are non-beneficial, or even harmful to the rural poor. For example, the area of land available for food production could be reduced, usufruct rights could be constrained, or farmers could be expected to undertake additional labour without adequate compensation.

Develop a prototype system for managing terrestrial stocks of carbon within a regional GHG bubble, with sequestration capacity in the order of IGtC, and an emphasis on the enhancement of sustainable rural livelihoods. >4 community forestry projects to be operational in Mexico, and C-management systems under development in >2 other FRP target countries by 2001.

• Protocols and guidelines for transferring resources for sustainable forestry and agroforestry to poor farmers and the landless on the basis of carbon sequestration.
• Management systems developed for at least six community forest management or agroforestry type projects within the GHG bubble.
• A decision-support system for assigning baseline and project carbon storage scenarios to forests in municipalities within the GHG bubble.
• Generic guidelines and methods for managing terrestrial carbon.