Carbon-reduction projects generate benefits beyond climate protection of about $664 per metric tonne of emissions, according to an Imperial College London University survey.
The study into 59 projects showed they bring ecosystem gains including soil protection, water regulation and biodiversity conservation, the university said. The survey’s estimate compares with an average price of $4.90 a metric tonne in the voluntary carbon market, where companies and individuals buy credits, Ecosystem Marketplace data show. The research was commissioned by the International Carbon Reduction and Offset Alliance, an emissions industry group.
The study, the first to measure non-climate benefits for a wide grouping of projects, seeks to help attract demand in the voluntary market, which shrank 28 per cent last year to $379 million, according to researcher Ecosystem Marketplace. Prices are lower in the main United Nations market, where there are more than 12,000 projects, as lawmakers debate climate-protection rules that would generate credit use.
“Any aggregate study such as this, while being a helpful indicator, will only ever give you indicative numbers,” said Edward Hanrahan, director of ClimateCare, a developer in Oxford, England. “It is critical that every project is assessed separately on its delivered social and development impacts, just as you would for carbon outcomes.”
The Imperial College analysis calculated $609 a tonne of ecosystem benefits. There was $52 a tonne in fuel savings, about $3 a tonne in economic benefits and 56 cents a tonne of skills and jobs improvements.
Projects covered by the research include forest protection, renewable energy and water purification, said Yiannis Kountouris, a lead researcher at Imperial. While the 59 projects from 25 project developers probably were higher quality than the average project in the industry, there was a wide selection, he said by phone. “We asked for representative projects,” he said.
Average prices in the voluntary market dropped 17 per cent last year, according to Ecosystem Marketplace’s research. They are still above prices in the UN’s Clean Development Mechanism, where benchmark credits settled yesterday at 16 euro cents ($0.21) a ton on ICE Futures Europe in London. Those contracts, which can be used for a portion of compliance needs in the European carbon market, were as high as 23.38 euros a ton in July 2008.
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