Updated 21 May 2015
- “Co-benefits” refers to the extra benefits from a project apart from the money for carbon credits, such as social, cultural or environmental benefits.
- Listing information about co-benefits is possible on the register of projects to signal these projects to the market.
- However, the ERF is focused on 'lowest cost abatement' and is not taking co-benefits into account in its auction processes.
“Co-benefits” refers to the extra benefits from a project apart from the money for carbon credits.
CFI projects focus on managing land for carbon, but wise land management also considers a range of cultural, social and environmental benefits.
Cultural or social benefits could be community development or meeting local employment targets. Environmental benefits could be biodiversity and water retention.
A system to recognise “co-benefits” can help the market decide what project credits are worth – if the project delivers more benefits that just carbon, buyers may pay a higher price for the credits.
The CFI legislation allows for project owners to list information about co-benefits on the register of projects held by the Clean Energy Regulator if conditions in the regulations are met.
At the moment, the only conditions in the regulations refer to:
- whether the project has received funding from the Biodiversity Fund, and
- whether the information is supported by evidence that the information is accurate, such as a copy of the funding agreement under the Biodiversity Fund.
This would allow a project to list information about improving biodiversity, but it is unclear whether other co-benefits could be listed as well (note: there will not be further grants from the Biodiversity Fund).
For example, it seems information about social and cultural co-benefits could be listed, however, the information would need to be supported by evidence to be accepted by the Regulator. At this point, there is no guidance in the regulations about information on other types of co-benefits.
The Australian Government has stated that listing of co-benefits in this way is a low cost credible way of signaling these projects to the carbon market.
The market may then choose to price these projects at a higher price because they are delivering more benefits.
Indigenous co-benefits may involve helping to protect a sacred site through appropriate fire management practices, employing local traditional owners as rangers, encouraging the re-introduction of rare or endangered wildlife or simply enabling people to be on country so the younger generation can learn from their elders.
Co-benefits can be included in the story that comes with the carbon credits – most buyers will be extremely interested in this bigger story. Buyers will want to know a little about the land holding group, language and how traditional owners look after country. The development of this relationship will help build strong business connections over a long period of time.
For example, the Fish River savanna project, run by the Indigenous Land Corporation, sold their first credits to Caltex, who were interested in a project with traditional owners contributing to the production of the carbon credits.
Carbon farming can have a powerful co-benefits story which aligns with traditional owner values for managing country. This might be much stronger than for other activities like mining or tourism.
Draft Indigenous co-benefit criteria and requirements to inform the development of Australia's Carbon Farming Initiative CSIRO, RIRDC, Monash University 2011
Benefiting from Co-benefits in Australia Net Balance 2013
The Real Value of Robust Climate Action The Gold Standard, Net Balance 2014
Fairtrade Carbon Credits Gold Standard 2015