How to measure socioeconomic impacts of nature-based carbon offsets? Analysis of current methodologies applied for project validation of reforestation projects and proposal for improvement.

Details

Supervisors

Mossay, Emmanuel

Faculty

Louvain School of Management

Degree label

Master [120] en sciences de gestion, à finalité spécialisée

Abstract

The urgent need to combat climate change has prompted the proliferation of carbon markets, including the Voluntary Carbon Market (VCM). Within the VCM, Nature-Based carbon offsets, specifically Afforestation and Reforestation (A/R) projects, have gained momentum. Macro tailwinds and carbon sink capacity in Low- and Lower-Middle Income countries shape these areas as interesting white spaces for these offsets, powered by the rise of REDD+. We however observe only little research on the socioeconomic impacts these projects have on local rural communities. This study extensively examines the methodologies used by Gold Standard, Verra, and Plan Vivo for A/R project validation. We analyze 26 projects based on their social indicators. Overall, our findings reveal highly inconsistent assessment methods, coupled with unclear indicators. This de facto decreased data validity and reliability, leading to inconclusive measurements and potential integrity issues. We emphasize the need to review the current scenery, viewing social impact as essential as carbon integrity. We suggest the use of a more robust methodology, which includes the adoption of stringent methods currently solely utilized for premium projects, the use of baselines, project-specific targets, formulas, and proper sampling methods. We also formulate a standardized set of context-specific indicators for comparability and transparency. Our proposal allows for reduced friction towards data accessibility. While this approach may increase barriers to access the VCM, especially for small local landowners, we believe it is a necessary starting point to ensure fair and verifiable outcomes for local communities.