How do crediting programs address sustainable development benefits and safeguards?

Carbon crediting programs generally have environmental and social safeguard policies designed to reduce the risk of any detrimental effects from registered projects. Nearly all require (and verify) that projects comply with applicable legal requirements. Most crediting programs also require local stakeholder consultations as part of the project approval process and have established grievance mechanisms to address complaints related to projects after implementation. Crediting programs may guard against the risks of harm presented by specific project types by excluding these riskier project types from the program. Crediting programs may also require risk assessment and reporting by project developers. Finally, some programs – like the Gold Standard – actively require that projects demonstrate social and environmental co-benefits (and not just avoid harm), as well as monitor and report on these benefits.

There are several “add-on” certification schemes (see What Are Carbon Crediting Programs) focused on the social and environmental impacts of carbon crediting projects. Organizations like the Climate, Community, and Biodiversity Alliance (CCBA) and SocialCarbon Standard, for example, certify the added co-benefits achieved by crediting projects (but do not otherwise address credit quality).

Carbon credits were originally conceived as a means to not only provide avoided GHG emissions benefits but also co-benefits to the communities in the vicinity of crediting projects. Co-benefits from the implementation of a carbon offset project improve social, economic, and/or ecological outcomes. For example, co-benefits can include improving community employment opportunities, air and/or water quality, biodiversity, biological habitat conservation, energy access, or access to community health and education services.

When deciding between crediting projects to buy credits from, if one is confident in the environmental integrity of each project, then the co-benefits can be a distinguishing factor. If buying credits from a clean cookstove project, one should also be supporting a project that reduces the amount of purchased fuel as it enables more efficient use of fuel. This outcome can save households money as well as reduce air pollution health impacts from inefficient indoor fuel combustion. For a buyer, it is useful to know their prioritization for these project characteristics – do they want to associate their organization with a project that conserves wilderness or financially benefits communities? Do they want to find a project with a connection to their business operations, products, or supply chain? Carbon credit purchases can represent a public relations risk if seen as ‘buying out’ of the problem of addressing climate change instead of reducing internal emissions. However, there is also risk related to a project’s potential to cause social or environmental harm. By supporting projects with high co-benefits, one can turn this aspect of risk into a positive attribute. Unsurprisingly, projects with high co-benefits typically correspond with higher credit prices.