Deep dive: Carbon credit projects for sustainability co-benefits

Carbon credit projects lead to many co-benefits, like new employment opportunities for women. Credit: FAO
  • 💁‍♀️ Gender equality
  • 💵 Economic growth and job creation
  • 🔥 Access to clean energy
  • 🦚 Biodiversity

1. What are co-benefits?

Co-benefits can be defined as the positive impacts arising from a carbon offset project beyond direct emissions avoidance or removal.

The 17 SDGs
Sustainability co-benefits of carbon offset projects

Growing demand for co-benefits

The value of the voluntary carbon market grew by 190% in 2021 and is expected to grow a further 50- 80% in 2022, reaching a value of some $1.7bn. This is partly driven by the net zero commitments of firms, with only 8% of companies surveyed by South Pole not having a net zero target in place.

Overcoming scarcity

Due to co-benefits often not being well defined, high-quality credits that take them into account are perceived as scarce.

Photo credit: ADB Photo Chor Sokunthea

2. Gender equality

Carbon credit projects have the potential to deliver the social sustainability co-benefit of improved gender equality.

  • Improving women’s participation in decision making
  • Reducing the strain of unpaid domestic burdens on women
  • Reducing levels of domestic violence and child marriage

Impact of carbon projects

Carbon credit projects can positively impact gender equality in multiple ways:

  • 🍛 Clean cookstove projects reduce the amount of time women spend collecting biomass for cooking. This creates opportunities to pursue other activities, such as the generation of new income streams. Cookstove projects also mitigate the negative impacts of inhaling combustion fumes indoors, improving women’s health and working conditions. Cookstove projects however have also faced criticism for reinforcing traditional gender stereotypes, instead of challenging a woman’s role within the family and wider community.
  • 🧼 Water access projects reduce the time required by women to collect water and the biomass required to boil it to make it safe to drink. Similar to cookstove projects, this benefits women by freeing up valuable time and reduces exposure to harmful fumes.
  • 🦎 Ecosystem restoration projects can create land management roles and educational opportunities for women. Often, as more marginalized community members than their male counterparts, female landowners more acutely feel negative climate change impacts on crop quality. Involvement in these projects can therefore help compensate for income losses.
Photo credit: FAO

Measuring and monitoring equality benefits

Definitively measuring changes to gender equality is difficult, as impacts pervade the lives individual women very differently.

Image from Gold Standard case study

Successful impact: Lango Safe Water Project, Uganda

CO2balance was the first project developer to apply the Gold Standard’s full Gender Equality requirements to the Lango Safe Water Project in northern Uganda.

  • 2 hours a day saved by women on water collection
  • Water Resource Committee membership approaching gender parity, with 46% female to 54% male members
  • 0% of participating women reported incidents of domestic violence related to water collection since the project started, compared to 35% before
  • Borehole users reported an 85% reduction in incidents of bullying, intimidation and assault during water collection
  • More than 40,000 individuals have gained access to safe water, reducing exposure to waterborne illness

3. Economic growth and job creation

Another key co-benefit of carbon credit projects is the strengthening and diversification of local economic opportunities.

  • Encouraging economic growth to create quality, secure, full-time employment opportunities
  • Providing better safety nets for the 61% of the population engaged in the informal economy
  • Deploying new technologies and innovative approaches to creating high value industry growth
  • Increasing youth employment and training

Impact of carbon projects

Economic growth results from multiple different types of offset project, with some key examples are discussed below.

  • 🌞 Renewable energy projects create opportunities for both skilled and unskilled employment in the construction and maintenance of renewables equipment, like wind turbines. Projects can also lead to benefits of technology transfer and development of associated opportunities, such as university research or component manufacture. Finally, if the electricity generated improves a community’s energy access then an even broader local opportunities can be created.

    It should also be noted however, that large-scale renewables projects may also result in negative impacts, such as inequality of job distribution or negatively effecting the ecosystems where the project is constructed.
  • 🌳 Forestry projects can lead to multiple different employment opportunities, including protecting reforested areas, managing agroforestry farms and engaging in new opportunities like beekeeping or harvesting fruits or rubber.

    These roles can strengthen and diversify a local community’s finances, leading to a stable, growing economy that in turn encourages infrastructure development and education opportunities.
  • 🌱 Ecosystem restoration, similar to forestry projects, can create jobs relating to the protection of certain habitats and those arising from their increased health, such as new or improved fishing opportunities. Ecotourism opportunities may also emerge, creating roles in hospitality or as guides or craft producers.

    These emerging opportunities should be considered within the restrictions that a restoration project may place on land and resource access, as not to negatively impact economic opportunities.
Photo by Deepak kumar

Measuring and monitoring benefits

As employment is a broad ranging co-benefit that arises from many carbon credit projects, there are no specific standards related to their inclusion.

  • Jobs need to be stable, long term and of high quality, meaning that offset projects need to be robust over many years.
  • New jobs should outweigh any loss of employment from an industry that a project may displace, for example by creating a protected area that prevents logging activities.
  • Opportunities need to be spread as equally as possible across communities to prevent the concentration of wealth, power and access to resources amongst an elite group.
Image of a Turkish farmer

Successful impact: Sayalar District Wind Project, Turkey

The Sayalar District in western Turkey has traditionally been an agricultural centre. However, as renewables projects have emerged across Turkey in response to fossil fuel reliance and growing energy demand, the region now hosts several wind power projects.

From the ‘Valuating the benefits of improved cooking solutions’ report

4. Access to clean energy

Another sustainability co-benefit that arises from carbon credit projects is increased community access to clean energy.

  • Providing universal access to safer, more efficient cooking systems for 2.6 billion people
  • Supplying electricity to the 759 million people that currently do not have access to power
  • Increasing the amount of modern renewable energy infrastructure

Impact of carbon credit projects

Energy-related carbon credits are generally associated with large scale renewables projects. Indeed, these are the most common offset project type behind REDD+ (discussed further below).

  • 🔥 Improved cookstoves increase the efficiency of household cooking. On average, households using traditional cooking methods consume 5–12kg of wood a day, which is time consuming to collect and places pressure on surrounding forests. The combustion process then exposes users to toxic smoke who are generally women (as explored above). Overall, the process of deforestation and combustion driven by these methods releases 1 giga-tonne of CO2 a year- 2% of all global emissions.

    Cleaner cookstoves provide a powerful solution, using 50–60% less wood than traditional approaches. Stoves are often made from ceramic or metal, meaning that they are more durable, sustainable and create opportunities for local manufacture.
  • 💩 Biogas is produced by placing animal manure and other wastes into a domestic biodigester. The biodigester causes the natural process of decomposition to take place in an air free environment, producing methane rich gas. This can then be used to power various appliances, including lamps, refrigerators and engines, instead of being released directly into the atmosphere.

    Similar to the benefits of improved cookstoves, biogas use reduces reliance on surrounding biomass resources, reduces the time required to collect resources and improves air quality. The process additionally improves sanitation and waste management in local communities and produces the bi-product of a high quality fertilizer.
Photo by Sven Torfinn

Measuring and monitoring benefits

While improved household energy solutions are essential to achieving SDG7, their uptake has been slow. There remains a fraction of the investment required to develop and roll-out these technologies, meaning that carbon credit projects play a large role in accelerating their progress.

  • Cookstoves — $84 million saved via improved community health; $143 million saved from reduced fuel use; $4 million generated in employment opportunities around the manufacture and distribution of cookstoves.
  • Biogas — $25 million saved via improved community health; $6 million saved from reduced fuel use; $4 million generated in employment opportunities around building and installing biodigesters
Clay stove from the Hifadhi-Livelihoods project

Successful impact: Hifadhi-Livelihoods Cookstove Project, Kenya

The Hifadhi-Livelihoods project is developed and financed by the Livelihoods Fund, in partnership with EcoAct & Climate Pal.

  • Reduced wood consumption by 40%
  • Halved the time spent on daily wood collection
  • Distributed 60,000 locally manufactured cookstoves
  • Trained and provided jobs for 30 local artisans
  • 100% of beneficiaries state that they now have better indoor air quality
Quentin Pelletier, Pexels

4. Biodiversity

The final co-benefit explored in this article is biodiversity.

  • Halting biodiversity loss and preventing the extinction of threatened species
  • Integrating ecosystem and biodiversity values into national policy making
  • Ensuring the conservation, restoration and sustainable use of forests, wetlands, mountains and drylands
  • Implementing the sustainable management of all forests, stopping deforestation and increasing reforestation globally

Role of carbon credit projects

Forest and land-use focused credits are one of the most popular of all carbon credit types, consistently commanding higher prices per tonne. In 2020, 47 mega tonnes of CO2 were offset via forestry projects at a high-price mark of $5.59 a tonne, compared to $2.20 for renewables.

Overview of credit type from nature-based solutions, Climate Focus VCM dashboard
  • Maintaining ecological balance in pollination, seed dispersal and germination
  • Protecting plant regeneration and water quality
  • Preserving the habitats of animals and insects, including those facing extinction
Nandhu Kumar, Pexels

Measuring and monitoring benefits

REDD+ projects, while common, have come under scrutiny for their carbon avoidance and biodiversity co-benefit credentials. Issues include:

Rimba Raya becomes the first registered SD VISta Project

Successful impact: Rimba Raya Sanctuary, Indonesia

The Rimba Raya Biodiversity Reserve Project aims to preserve 64,000 hectares of tropical peat-swamp forest on the south coast of Borneo, Indonesia. The area is rich in biodiversity, including being home to the endangered Bornean orangutan. Despite this, there were plans for it to be converted into four palm oil estates.



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Toucan Protocol builds infrastructure for carbon markets to finance the world’s best climate crisis solutions.