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The study in partnership with the International Carbon Reduction and Offsetting Alliance (ICROA) is the first academic research to measure and value the impact of investing in carbon offset programs beyond reducing emissions.
ICROA said companies voluntarily offsetting their emissions are having a bigger impact than perceived. The research found that each tonne of carbon reduced has $US664 ($710) in additional benefits. Much of that comes through ecosystem benefits such as soil protection, water regulation, and biodiversity conservation, but there are also fuel and time savings (from distributing cleaner household appliances), direct economic benefits and new skills and jobs.
Yiannis Kountouris, an environmental economist at Imperial College, said they used the “latest natural capital accounting methodologies” to demonstrate the impact offset projects are delivering on the ground.
The study took a two-pronged approach. Firstly, data was collected from 59 offset projects around the globe and all the social and economic benefits were quantified, then monetised using environmental economics methodologies. Imperial calculated the total value of this sample in order to determine the value per tonne of carbon dioxide.
The second prong surveyed 72 of the larger companies participating in voluntary carbon offsetting programs and found 67% of them reported positive and tangible business benefits. The top three were enhanced brand image, engaged employees and market differentiation.
The research is filling a gap, with 82% of respondents saying they would like to see more quantification and valuation of co-benefits, which are a key part of their project selection process. Significantly, buyers also indicated a willingness to pay up to 33% more per tonne of CO2 for projects with verified social, economic and environmental co-benefits, drawing upon the value co-benefits from carbon offset programs can deliver for the business. Social co-benefits were valued the highest, followed by economic and then environmental co-benefits.
