What are co-benefits?

Co-benefits are additional impact project benefits that go beyond greenhouse gas emissions (GHGs) avoidance and removal, such as positively impacting communities and biodiversity. Not all types of impact projects offer the same types or levels of co-benefits. For instance, a REDD+ project that aims to protect a forest from deforestation could, as a result, create jobs in the area and also protect local biodiversity, whereas a direct air capture (DAC) project might create a few jobs but would not have wider ecological benefits. 

Co-benefits have become associated with project quality

In general, projects can demand higher premiums when they create real, quantifiable value of as many types as possible. According to a now-venerable 2014 study by Imperial College London and ICROA, projects with co-benefits may deliver up to $664 in additional economic, social and environmental benefit per ton of sequestered CO2. 

This potential surplus value is what buyers are after. According to the same study by ICROA, buyers of carbon credits prioritize projects that have co-benefits and are relevant to their business. These factors have long been especially important for companies aiming to enhance their reputation and brand image and gain a competitive edge. The study also found that 82% of buyers desired more quantification and valuation of co-benefits to improve communication, transparency, and the business case for offsetting. Notably, buyers in this study expressed a willingness to pay up to 33% more per ton for projects with verified social, economic, and environmental co-benefits, recognizing their potential value. The research indicated that social co-benefits were most valued, followed by economic and then environmental co-benefits.

Because research like the above is now widely known and reflected in industry guidelines and requirements that hope to make projects of more uniformly high quality, more project developers have sought to incorporate co-benefits into projects. 

How the market values co-benefits today

Today’s credit buyers appear to be more willing than ever to pay higher premiums for projects with strong co-benefits. Ecosystem Marketplace’s State of the VCM 2023 indicated that credits from projects with at least one co-benefit certification had a 78% price premium compared to projects without any co-benefit certification. Looking exclusively at Verra’s VCS, the largest project standard, showed that credits from these projects with co-benefits had a 92% premium in 2022, compared to a 69% premium in 2021.

Projects with real co-benefits are thus shown to consistently drive significant – and increasing – premiums. However, considerable expertise and effort on the part of project proponents is required to achieve and demonstrate them to buyers’ satisfaction. 

How Impact Inside makes achievement and recognition of co-benefits easier 

We recognize that transparency and auditability are not optional; they’re essential for delivering co-benefits in the way that today’s market demands, as indicated by organizations like the ICVCM. This is true both to ensure that stakeholders receive the benefits they’ve been promised, and to enable good projects to command the prices they deserve. 

In addition, as mentioned earlier, most buyers prefer to see more and better quantification and valuation of co-benefits. Impact Inside gives proponents the tools they need to meet this demand, starting with our built-in stakeholder consultation which creates a paper trail for auditors and enables proponents to think about project design from the bottom up. 

From there, we help proponents design “bulletproof” project plans that clearly show how activities will lead to benefits, which is then augmented by our fully-configurable built-in system for data collection. These two elements work in unison to help proponents deliver high-quality projects, with the project plan helping contextualize all performance data: in fact, encoded plans enable our platform to help with pretty much every challenge associated with planning, delivering, measuring and proving delivery of co-benefits – from automated reporting and documentation, to telling robust, transparent data-driven stories about the benefits your project delivers.  

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