Cookstove project, Cambodia

As businesses
increasingly take steps
to reduce their carbon
footprint and consider
their overall impact
on the environment,
leading new research
shows that carbon offset
programmes deliver
substantially more
benefits than expected –
bringing value that might
previously have been
For many years there has been
anecdotal evidence that investing
in a carbon offset programme
delivers a wide range of positive
social and economic benefits
beyond just carbon reduction.

                                    Cookstove project
Now, new academic research                        conservation, investment in local            As organisations realise the value                 carbon reductions that will unlock
                                                  economies, technology transfer, local        of material carbon management                      hidden value for your business, our
shows that every tonne of                         infrastructure and training, and positive    strategies, and consumers, customers               environment and communities around
CO2 offset not only funds                         impacts on water resources.                  and staff increasingly expect business             the world.
GHG reductions, but can                                                                        to demonstrate their commitment
                                                  Furthermore, the research shows that         to tackling climate change, reducing               Visit to find a list of
deliver up to a staggering                                                                     environmental impact and supporting
                                                  there are a number of benefits for                                                              accredited offset providers.
$664 in additional economic,                      your business too. As well as helping        communities, a strategy that includes
                                                                                                                                        UNLOCKING THE HIDDEN VALUE OF
social and environmental                          meet your environmental targets, an          offsetting is a cost-effective approach            Read on to find out more about
benefits.                                         offset programme can improve staff                                               CARBON OFFSETTING
                                                                                               delivering several important benefits.             Imperial College London University’s
                                                  and community engagement, increase                                                              evidence-based research.
The benefits to communities                       market differentiation, and stimulate        Choosing to offset through an
around the globe include job                      new resource efficiency efforts (and         accredited ICROA member will
                                                                                                                                 An Imperial College University Study shows that for every
creation, household savings,                      savings). Plus it’s increasingly important   ensure that your investment 1 tonne of C02 emission removed from the atmosphere through
health benefits, environmental                    to winning new tenders/business.             delivers independently-verifieda carbon offset programme - a further value of US$664* dollars
                                                                                                                                 is delivered in economic, social and environmental benefits for
                                                                                                                                               local communities around the world.

                                                                                                                                                  $3                            $52
                                                                                                                                                                             Fuel savings

                                                                                                                                                         FOR EVERY
                                                                                                                                                          1 TONNE
                                                                                                                                                         OF CARBON
                                                                                                                                     ¢56                                                $609
                                                                                                                                  Skills & Jobs                                      Environmental

                                                                                                                                                         TOTAL $664
                                                                                                                                                         above and beyond
                                                                                                                                                          carbon reduction

  Reforestation project

Unlocking the hidden value of carbon offsetting                                                                                                                                                      3

Leading businesses that                           About ICROA and Imperial College            Secretariat, Andrea Abrahams, BP          • Envirofit International
                                                  London University                           TargetNeutral and Laure Fievet, ICROA
follow best practice and                                                                      Secretariat. With special thanks to       • The Paradigm Project
                                                  The International Carbon Reduction
offset their carbon emissions                     and Offset Alliance (ICROA) is              Imperial College London Teams, all
                                                                                                                                        • Face the Future
as part of a broader carbon                       a global non-for profit housed              ICROA member companies especially
                                                                                              Rebecca Fay, The CarbonNeutral
management strategy,                              within the International Emissions
                                                                                              Company, Rhiannon Szmigielski,
                                                                                                                                        • South Pole Carbon Ltd
                                                  Trading Association. Its members
experience business benefits                      provide carbon reduction and                Climate Care, Nadine Planzer, Climate     • Green Resources AS
and see additional value                          offset services across the world to         Neutral Group, Mike Tournier and Junio
                                                                                              Palomba at Climate Friendly.              • Offsetters Climate Solutions Inc
from the carbon reduction                         1000s of organisations including
                                                  household brands and multinationals
projects they support.                            supporting the reduction of global          ICROA would like to extend a big thank    • Infinite Earth Limited
                                                  emissions towards the goal of avoiding      you to the project developers that        • Pacific Forest Trust
However, to date, there                           dangerous climate change impacts.           contributed to this research including:
has been little research to                                                                                                             • Biofilica Environmental Investments
                                                  The primary aim of ICROA is to promote      • E+Carbon, LLC
understand and measure                                                                                                                  • Hivos
                                                  best practices in carbon management
this value.                                       and offsetting. ICROA keeps abreast of
                                                                                              • Carbon Clear Ltd
                                                                                                                                        • Conservation international
                                                  the latest developments within carbon       • DelAgua Health
The International Carbon Reduction and            management and the carbon markets to                                                  • And the 75 corporates that
Offset Alliance (ICROA) and Imperial              ensure its members adhere to the best       • First Climate Markets AG                  participated and provided valuable
College London University (Imperial),             possible practices in the industry. All                                                 insights.
globally recognised for environmental             ICROA member companies follow and           • Nexus Carbon for Development
economics and valuation, set about to             publicly report against the ICROA Code                                                ICROA aims to:
research the socio-economic impacts               of Best Practice, which provides specific   • Clean Air Action Corporation
of the voluntary carbon market and                requirements for the manner in which
                                                                                              • Climate Bridge Ltd.                     > Support fast, global emissions
gather evidence on the value and                  ICROA members provide their carbon                                                        reductions by promoting a
impacts of carbon offsetting – beyond             footprinting, greenhouse gas reduction      • Emergent Ventures International             responsible “reduce and offset”
emissions reductions.                             advice and offset services. ICROA ensure                                                  approach to carbon management
                                                  members are annually third party audited    • Sustainable Carbon Climate                  by businesses and individuals.
The research, finalised in May 2014,              to ensure the quality of their services.      Solutions
reveals that carbon offsetting
                                                                                                                                        > Promote credibility and high standards
delivers both business benefits to                We extend our thanks to all the project     • Bosques Amazonicos SAC
                                                                                                                                           in carbon management and voluntary
the participating organisations, and              participants, academics, businesses
                                                                                              • Camco Clean Energy                         carbon offsetting, through widespread
up to $664 worth of environmental,                and project developers that took part                                                    adherence to and promotion of the
social and economic benefit. This is in           in this research.                           • Wildlife Works                             ICROA Code of Best Practice.
addition to the carbon reduction for
every tonne of CO 2 that is offset.               Acknowledgments                             • Impact Carbon                           > Provide a credible, influential and
                                                  The team that supported this research                                                    consistent voice on carbon reduction
                                                                                              • EcoAct
                                                  was led by Sophy Greenhalgh, IETA

Unlocking the hidden value of carbon offsetting                                                                                                                                 4

  strategies, products and services               The Centre integrates the College’s
  and raise the profile of the voluntary          outstanding science and technology
  carbon market.                                  research with a leading team of social
                                                  and policy scientists, creating exciting
> Enable bold carbon management                  interdisciplinary research programmes.
   strategies to be integrated profitably         More specifically, the centre has a
   into business.                                 longstanding background in economic
                                                  environmental valuation – the process
> Commit to shared learning,                     of placing monetary values on
   transparency and continuous                    environmental impacts – delivering
   improvement.                                   work for UK Department of Energy
                                                  and Climate Change, UK Department
> Engage with governments and                   for Environment, Food and Rural
  other key stakeholders on voluntary             Affairs and the European Commission.
  carbon market issues to help ensure
  that best practice becomes the norm             The team that conducted the research
  in the voluntary carbon market.                 was lead by Dr Zen Makuck, Dr Ioannis
                                                  Kountouris and Ms E Feng Tan Loh.
Imperial College London University–
Centre for Environmental Policy (CEP)
Imperial College London is a research
university located in London, United
Kingdom, which houses The Centre
for Environmental Policy (CEP).

The Centre produces internationally-
recognised research and teaching
that addresses key environmental
and global policy challenges through
the interdisciplinary study of science,
technology and innovation.Staff
within CEP include climate change
researchers, energy policy researchers,
economists, engineers and ecosystems
services researchers who work
with firms in the following sectors:
oil and gas, mining, water, waste,
environmental services, and strategic
advisory services.                                                                           Schoolchild with filter

Unlocking the hidden value of carbon offsetting                                                                        5

  In 2013, ICROA and
  Imperial conducted a
  research study into the
  socio-economic impacts
  of the voluntary carbon
  The study had two objectives:
  Part (1) To identify the
  motivations of businesses
  participating in voluntary carbon
  offsetting and to categorise the
  benefits they receive

  Part (2) To quantify the social,
  economic and environmental
  benefits delivered by voluntary
  carbon offset projects that are in
  addition to the carbon reductions
  they achieve (“co-benefits”)
   Term used to describe the sector
  responsible for the production and life
  cycle of a carbon credit from conception
  through to retirement in an independent
  registry to ensure 1 tonne of C02e is
  removed from the earth’s atmosphere.

Reforestation project
For businesses to achieve significant     Sample description:
                                                                                            emissions reductions, they need a         The majority of the respondents
                                                                                            comprehensive carbon management           are businesses in the private sector
                                                                                            plan, which combines internal             operating in Europe, Australia and North
                                                                                            reductions with a carbon offset           America, in line with the current market,
                                                                                            programme.                                and cover a variety of sectors: finance/
                                                                                                                                      insurance sector; transportation/
                                                                                            There are many changes companies          tourism; professional/administrative
                                                                                            can make to internal processes,           services; information/communication;
                                                                                            behaviour and facilities to reduce        electricity/energy; manufacturing;
                                                                                            their carbon emissions. However,          construction; wholesale; government;
                                                                                            carbon emissions cannot be reduced        paper and printing; education; chemical;
                                                                                            completely due to capital restraints      textile and leather; waste management;
                                                                                            and restrictions in technology. Carbon    water; art/entertainment; sport
                                                                                            offsets can enable businesses to take     governance/events.
                                                                                            full responsibility for their residual
                                                                                            carbon emissions immediately, rapidly     All businesses that participated have
                                                                                            reducing global emissions at scale and    a comprehensive internal carbon
                                                                                            helping tackle climate change. Carbon     management strategy and many
                                                                                            offsets also provide a critical source    companies have in-house sustainability
                                                                                            of finance for renewable energy and       or environmental departments. The
                                                                                            other emissions reducing and resource     respondents interviewed were senior
 Reforestation project, Africa                                                              conservation projects around the world.   leaders, such as manager or director
                                                                                                                                      in a CSR, sustainability or environment
                                                  Part 1: What are the business             Imperial surveyed 72 businesses to        related position. As a result, Imperial
                                                                                            gather insights on motivations and        deem them to have sufficient
                                                  benefits of carbon offsetting             barriers encountered to participating     knowledge to answer the questions
                                                  and why do organisations                  in offset programmes, as well as          and that their responses are credible.
                                                  choose to do it?                          collecting tangible benefits the
                                                                                            businesses had experienced. The           Methodology & data collection
                                                  Many leading businesses already           results offer useful insight into their   To identify and categorise the benefits to
                                                                                            motivations, impacts, tangible benefits   business, a comprehensive literature review was
                                                  participate in offset programmes and                                                completed and a survey designed. The survey
                                                  this research draws on their experience   and challenges that will benefit other    went through extensive consultation with ICROA
                                                  to make a clear business case for         businesses who wish to demonstrate        members including a pre-test undertaken.
                                                  action and help other organisations       their commitment to managing their        The surveys were completed through phone
                                                                                                                                      interviews by ICROA members with their
                                                  to understand the value to reputation,    environmental impact and supporting       customers and by Imperial to the Climate
                                                  employee engagement and market            communities.                              Leaders Index of the Carbon Disclosure
                                                                                                                                      Project. Non-buyers of offsets which held a
                                                  differentiation brought from carbon                                                 comprehensive internal carbon management
 Run-of-river hydro project, India                offset strategies.                                                                  plan were also approached to ensure balanced
                                                                                                                                      analysis is presented.

Unlocking the hidden value of carbon offsetting                                                                                                                                         7
                                 BUILD Y     G
                                      ING     AIR E

 a number of offset buyers have highlighted the following business benefits:
    Figure 1: Motivations to offset                                            Carbon offsetting delivers                 “Many of our larger customers
                                                                               tangible business benefits                  are seeing it as a real benefit,
                                                                                                                           it further strengthens our
      REPUTATION / BRAND IMAGE 67%                                             Reputation/brand image, employee
                                                                               engagement and market differentiation       environmental credentials
                                                                               are ranked as the three primary             and proves that what we
                                                                               motivations for offsetting by buyers.
                                                                                                                           do take action to minimise
                                                                               67% of respondents have reported
        MARKET DIFFERENTIATION 47%                                             positive and tangible business benefits     our environmental impact.
                                                                               from their voluntary offset programme,      We have also secured one
                     PHILANTHROPY 37%                                          despite the fact techniques to measure
                                                                               and quantify these are still at an early
                                                                                                                           contract solely because of
                                                                               stage. Those benefits range from            our offsetting commitment,
                           EFFICIENCY 15%                                      reductions in energy consumption            so there will be financial
                                                                               and costs, to market differentiation,
      SUPPLY CHAIN MANAGEMENT 4%                                               winning new business and client             benefits that can be
                                                                               retention, to employee engagement.          measured.”

                                                                               “Offsets offer us an                      “Brings a greater level of
                                                                                 alternative to making                     transparency to our supply
                                                                                 reductions in the most                    chain and incentivises
                                                                                 cost-effective way possible.              improvements.”
                                                                                 We have implemented
                                                                                 new technologies and                     “Our offset program
                                                                                 new processes to increase                  caught the imagination of
                                                                                 efficiencies, but doing more               employees. Unexpected, but
                                                                                 may not be the most cost-                  good. It became easier to
                                                                                 effective route. This is where             communicate sustainability
                                                                                 offsets become our next                    messages and get buy in
                                                                                 viable option.”                            to reduction measures. It
                                                                                                                            helped change behaviours.”

      Click here to download your essential guide to carbon offsetting

Unlock this hidden value by offsetting your
carbon   footprint
    Unlocking         through
              the hidden value of an  accredited
                                  carbon offsetting                                                                                                       8
ICROA member.

Table 1: Offsetting Benefits Ranked by Offset Buyers

                                            Benefits                                                    Potential quantification/indicators

                                                                             Tax credits
          tangible                                Energy/cost reduction      Reduction in energy consumption
                                                                             Cheaper than in-house abatement or purchasing green energy certificates

                                                                             Number and value of tenders that ask about commitment to emission reduction
                                                  Winning/answering tender
                                                                             Number and value of contracts that state the requirement of carbon offsetting

                                                                             Customer’s preference
                                                  Market differentiation     Price premium
                                                                             Volume of green products sold

                                                                             Employee survey
                                                  Employee engagement        Number of events hosted and turnout
                                                                             Number of visits to the company’s intranet site

                                                                             Sustainability related reputation indices and rankings
           Least                                  Brand recognition
          tangible                                                           News coverage

Unlocking the hidden value of carbon offsetting                                                                                                              9

Relevance and co-benefits
deliver value to business
When buyers were asked what factors
drive their preferences for certain
offset types, relevance to business and
co-benefits were the two most cited
factors. These drivers were particularly
of value to buyers who are looking to
build reputation and brand image and to
differentiate themselves in their markets.

However, the research also revealed a
potential gap in buyers’ preferences
and what is available, with 82% of
respondents saying they would like to
see more quantification and valuation
of co-benefits. Respondents felt that
this information would help their
communications with customers and
employees, promote transparency
and understanding of their return on
investment and help build the business
case for offsetting.

Significantly, buyers also indicated a
willingness to pay up to 33% more per               Reforestation project
tonne of CO2 for projects with verified
social, economic and environmental
co-benefits, drawing upon the value               Selecting the right project to          Purchasing carbon offsets through          As expected, most businesses set a
co-benefits from carbon offset                                                            members of ICROA, who are                  budget for their offset programmes
                                                  offset your emissions is key            committed to following a Code of           and will seek the most cost-effective
programmes can deliver for the
business. Specifically, through a choice                                                  Best Practice, ensures buyers can          options to meet their goals. However,
                                                  Although relevance to business and
experiment that was included in the                                                       confidently select projects which meet     as demonstrated above, many are
                                                  co-benefits are important selection
research, social co-benefits were valued                                                  the essential quality criteria to ensure   willing to pay a premium for the
                                                  criteria for buyers when choosing
the highest of the three types, followed                                                  project registration procedures are        additional values a project can deliver
                                                  offset projects, project registration
by economic, with environmental co-                                                       followed and issuance risk is reduced.     with verified co-benefits.
                                                  and issuance risk and carbon price
benefits ranked third.                            continue to be leading decision-
                                                  making criteria.

Unlocking the hidden value of carbon offsetting                                                                                                                            10
Part 2: Quantifying the                                                               American Carbon Registry (ACR), Clean      Co-benefits are organised under
                                                                                      Development Mechanism (CDM), Joint         the three pillars of sustainability:
social, economic and                                                                  Implementation (JI), Climate Action
environmental benefits that                                                           Reserve (CAR), Gold Standard (GS) and
projects deliver                                                                      Verified Carbon Standard (VCS), Social
                                                                                      Standards – Climate, Commmunity &
                                                                                      Biodiversity Alliance CCBA and Social
The first part of the research set
out to identify the direct benefits                                                   Carbon Standard SCS, where verified
experienced by businesses that                                                        along with carbon standards.
offset their carbon emissions. In Part
2 we expand on the measurement,                                                       A significant number of co-benefits
quantification and monetisation                                                       were identified in the research process.
of co-benefits transferred to local                                                   The list of co-benefits collected for                      Social
communities and the environment                                                       this study is therefore by no means
where the project is being developed.                                                 exhaustive and we have not listed
                                                                                      all benefits.
Improved quantification of co-benefits
from these projects will enable                                                       The analysis has been conducted using
businesses to make the links to their             Run-of-river hydro project, India   project type, location and volume                          Environmental
strategic objectives and goals, such                                                  of emission reductions to normalise
as building reputation/brand image,                                                   the co-benefits delivered against the
employee engagement and market                                                        sample size. Where quantified data
differentiation, and consequently, to                                                 and economic methodology valuations
                                                                                      were available, co-benefits have           Sample description
reap the full spectrum of benefits and
value associated with carbon offsetting.                                              been monetised.                            The sample portfolio generates around
                                                                                                                                 32 million tonnes of CO2 (MtCO2)
Methodology                                                                           Each method for valuing co-benefits        emission reductions per year and around
                                                                                      is presented in Table 2 (page 14). The     836 MtCO2 reduction over the project’s
To quantify – and where possible
                                                                                      monetary value of co-benefits has          lifetimes. In 2012, the total volume of
monetise – co-benefits from offset
                                                                                      been aggregated across the portfolio       voluntary offsets transacted was 101
projects, a survey was developed
                                                                                      and normalised by the (annual or total)    million tCO2 (Peters-Stanley et al., 2013).
for project developers of voluntary
                                                                                      tonnes CO 2 generated to arrive at the     The sample portfolio’s annual tCO2
retailed projects. The survey design
                                                                                      co-benefit $ per tonne CO 2value. This     generation corresponds to 32% of the
was informed by academic and
                                                                                      is indicative of our sample only and       transacted volume in 2012.
industry literature reviews, analysis of
                                                                                      helps to demonstrate the kind of value
internationally recognised sustainability
                                                                                      delivered from offset projects. It is by
standards, and industry expert
                                                                                      no means exhaustive of the full market
consultation with 13 organisations. Only
                                                                                      and we aim to develop and extend this
voluntary market projects using ICROA
                                                                                      information for further, more detailed,
endorsed standards were included:                 Run-of-river hydro project, India
                                                                                      analysis and research in future.

Unlocking the hidden value of carbon offsetting                                                                                                                            11
The sample characteristics are described below:
Figure 2: 56% of the projects are forestry/land use projects, followed by household      Figure 3: 56% of the projects are located in Africa, followed by Asia (24%), Latin
device distribution projects (32%), energy efficiency/ fuel switch projects (7%) and     America (17%) and North America (3%). 83% of the projects are certified by
renewable projects (5%).                                                                 social standards in addition to carbon accounting standards, such as the Climate,
                                                                                         Community & Biodiversity (CCB), GS and Social Carbon (SC).

           5% Water purification                                                         17% Latin America                                3% North America
                                                  3% Wind

2% Run-of-river hydro                                             34% Afforestation/

19% REDD/

3% Improved

                                                                                          24% Asia                                                       56% Africa
8% Domestic biogas                                                   7% Biomass

     2% Clean cookstoves
     & water purification                           17% Clean cookstoves

Our figures have all been calculated conservatively using the data collected from
respondents. Individual limitations on data are outlined in Table 2, found on page 14.

Unlocking the hidden value of carbon offsetting                                                                                                                               12

Total benefits per tonne from 59 surveyed projects

             $3                                     C56                              $52                            $609                             $664
                                                  Skills & Jobs                     fuel savings                   environmental                         TOTAL

Economic                                  Social                            Economic                       Environmental                     Total
The projects are estimated to              To-date, the projects             Assuming the household           Projects that conserve natural     Using this research as
contribute around US$110.4                 contributed around                device distribution projects     ecosystems are estimated
million to local economy                   US$725,000 to local               meet their targeted number of    to generate around US$16           a base, we determined
during development stage                   infrastructure and services,      households (1.9 million), they   billion of ecosystem benefits      that offsetting
and a further US$78.7 million              such as education, healthcare,    are estimated to generate        per year. Whilst the lands         1 tonne of CO2 delivers
per year of operation through              transport systems and micro-      around US$2.8 billion of         are conserved for carbon
local employment and                       financing local projects: Per     household savings: around        sequestration, they also deliver
                                                                                                                                                 benefits totalling
sourcing local services and                tonne of CO2, US$0.007 is         US$52 per tonne of CO 2 .        other ecosystem services           $664
material: US$2,600 per 1,000               spent on local infrastructure                                      such as soil protection, water
tonnes of CO 2 to the local                development.                                                       regulation, and biodiversity
economy.                                                                                                      conservation: every tonne of
                                           The projects collectively train                                    CO2 generates around US$609
                                           around 211,310 local people                                        of ecosystem benefits.
                                           in administration, with
                                           technical skills, or in health
                                           & safety or environmental/
                                           community issues: Around
                                           2 people are trained per
                                           1000 tonnes of CO 2 .

Unlocking the hidden value of carbon offsetting                                                                                                                       13

Table 2: Breaking down the quantified co-benefits2 delivered from Carbon Offset Projects
The table below summarises the co-benefits of the studied projects.

Quantification of co-benefits3

                         Co-benefits                                   Quantification                           Valuation                     Per tCO 21                                    Method

                 Employment creation (48)

                                                                                                                                                                 Based on the number of jobs generated multiplied
                                                                                                                                                                 by the country’s minimum wage. Normalised
                 Development                                  1,467 jobs created                      US$*2.6 million                    US$0.003                by total tonnes CO 2 for development stage and
                                                                                                                                                                 annual tonnes CO 2 for operational stage. Project
                                                                                                                                                                 development was assumed to take a year

                 Operation (per year)                         8,042 jobs created                      US$*17.9 million                   US$0.559

                 Sourcing local material
                 and services (13)

                                                                                                                                                                 Total spending on local material and services,
                                                                                                                                                                 normalised by the total tonnes of CO 2 for
                 Development                                  US$58,327,800                           US$*107.8 million                  US$0.129
                                                                                                                                                                 development stage and annual tonnes of CO 2 for
                                                                                                                                                                 operational stage

                 Operation (per year)                         US$38,230,000                           US$*60.8 million                   US$1.895

    We refer to the additional benefits a project delivers beyond carbon reduction as “co-benefits”                 3
                                                                                                                     The response rate differs across questions as some are irrelevant to the specific project or due to limited
                                                                                                                    information available to respondents at the time of the survey. The sample size is indicated in the findings
                                                                                                                    by stating the number of projects in parentheses. US$ are the values as reported by survey respondents,
                                                                                                                    and US$* are adjusted values according to Purchasing Power Parity (PPP) .

                                                                                                                    N.B, this is a sample of the voluntary market projects and by no means represents the full value of the
                                                                                                                    market. We hope in due course to evaluate the broader market but in the meantime aim to demonstrate
                                                                                                                    the further value being delivered through carbon offset projects our members are retailing.

Unlocking the hidden value of carbon offsetting                                                                                                                                                                               14
Table 2: Breaking down the quantified co-benefits delivered from Carbon Offset Projects (continued)

                 Co-benefits                                 Quantification                              Valuation                      Per tCO 21                                  Method

    Household savings (13)

                                                                                                                                                         Time savings is converted to potential income
                                                                                                                                                         generation by multiplying 25% of the time saved with
              Fuel saving                         US$ 148 per household per year             278 US$* per household per year                             shadow wage.

                                                                                                                                                         The projects collectively target 1,912,932 households.
                                                                                                                                          US$52          Assuming 273,276 devices are disseminated
                                                                                                                                                         annually (1,912,932 over 7-year crediting period), the
                                                                                                                                                         accumulated saving is calculated as around US$*2.8
              Time saving                         10 hours per household per week            87 US$* per household per year                              billion. The figure is normalised by the total tonnes of
                                                                                                                                                         CO 2 generated from household device projects (53
                                                                                                                                                         million tonnes of CO 2).

                                                                                                                                                         Number of people trained on the project, including
                                                                                                                                                         project staff, contractors and local community,
              Capacity building (41)              211,310 people trained to-date                                                        US$0.002
                                                                                                                                                         normalised by tonnes CO2 generated to-date (109
                                                                                                                                                         million tonnes of CO2 pro-rata).

                                                                                                                                                         Projects’ expenditures on local infrastructure and
                                                  US$ 725,000 contributed to-date                                                       US$0.007         services, normalised by tonnes CO2 generated to-date
              development (5)
                                                                                                                                                         (109 million tonnes of CO2 pro-rata).

                                                                                                                                                         Based on the area conserved multiply by TEEB2
                                                                                             US$16 billion of ecosystem                                  derived indicative value of ecosystem benefits per
              Ecosystem benefits/                 2,802,520 ha of natural habitat
                                                                                             benefits per year (including             US$608.668         ha of ecosystem type, normalised by the annual CO 2
              biodiversity (19)                   conserved
                                                                                             carbon sequestration)                                       tonnage generated by projects that conserve land
                                                                                                                                                         (26 million tonnes of CO 2).

 The valuation methods are simplified to provide values of the co-benefits per tonne of C02 generated        5
                                                                                                              TEEB – The Economics of Ecosystems and Biodiversity (TEEB) has undertaken a number of case studies
from the sample portfolio                                                                                    to estimate the annual ecosystem benefits from different ecosystems/biomes.

                                                                                                             The use of benefit transfer technique offers a useful approach but if applied indiscriminately without
                                                                                                             taking into account the differences between projects could lead to the wrong conclusions.

                                                                                                             Therefore, the ecosystem benefits derived in this study using TEEB’s estimates should be considered
                                                                                                             with caution.

Unlocking the hidden value of carbon offsetting                                                                                                                                                                       15

During the study, we were
also able to quantify other
significant benefits. For
the scope of this research
we have not monetised
these benefits but included
them as indicators to
further value. As the
research programme
progresses we will be able
to analyse these additional
benefits further.

> Technology transfer – 64% of the              > Improved public health – Efficient        > Air quality – 32% of the projects      > Water resource – 30% of the
    projects involve using technology                 household devices promoted by                 have a positive contribution to            projects have positive impacts
    that is new to the region. The new                the projects have the potential               local air quality. However, there is       on local water resources through
    technology is imported either from                to reduce 40-100% of indoor air               a lack of quantitative information         reducing water pollutions. As in
    another country or another region                 pollutant concentrations, thus                on the extent of the claimed               the case of air quality, there is a
    within the project country, and can               reducing indoor smoke related                 positive impact. The actual benefit        lack of quantitative information.
    be maintained in the long-term by                 illness. Less time spent in poor health       of air pollution reduction could           Therefore, the monetised benefit
    the local workforce.                              means the household members have              be estimated using the social cost         of improving local water resource
                                                      more time for income generating               for each pollutant, however in the         could not be estimated.
                                                      activities, education or recreation. In       absence of quantitative information,
                                                      addition, reduced illness also saves          this has not been carried out in
                                                      household medical costs and cost to           this study.
                                                      public health systems.

Unlocking the hidden value of carbon offsetting                                                                                                                                      16

  Increasingly, businesses              brought about through offset
                                        programmes, our goal is to provide a
  are considering their                 clearer picture and food for thought
  carbon management                     on the value of integrating offsetting
  activities as part of their           as part of businesses’ sustainability
                                        strategies. And therefore to help
  broader sustainability                those strategies build reputation
  programmes, covering                  and brand, engage employees and
  total environmental                   differentiate in the marketplace, in
  impact, citizenship and               addition to delivering essential global
                                        carbon emission reductions.
  supply chain resilience.
                                        We aim to build upon this study over
  Carbon offsetting offers companies    time in order to further demonstrate
  the opportunity to align their        the value that offsetting
  carbon reduction approach with        programmes bring to business and
  other corporate priorities. But, to   encourage both project developers
  do that requires offset projects      and businesses participating in
  to demonstrate the non-carbon         offset programmes to take part in
  benefits they are delivering and to   our continued research efforts.
  place a value on those co-benefits.
                                        For further information and
  With $664 of additional value         enquiries please contact
  for every one tonne of CO 2 , the
  additional social, economic and
  environmental value of carbon-        By building the value case for
  offset projects is clear.             integrating offsetting into business, we
                                        hope to initiate further voluntary action
  From training to job creation,        on carbon mitigation by business.
  fuel savings to time savings,
  infrastructure development to         For further information and to see
  ecosystem conservation, the           how your business can unlock the
  benefits extend to communities        hidden value of offsetting, visit
  and economies around the globe.

  By setting out the academic
  evidence based on the benefits

Cookstove project, Cambodia
To find out more, go to:

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