Environmental Studies and Forestry

Integrating sustainability into climate finance by quantifying the co-benefits and market impact of carbon projects

J. Lou, N. Hultman, et al.

This fascinating research by Jiehong Lou, Nathan Hultman, Anand Patwardhan, and Yueming Lucy Qiu delves into how co-benefits from climate action enhance market value in climate finance. Discover how projects with better co-benefits attract significantly higher prices and the critical role these benefits play in garnering social and political support.

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Playback language: English

Index

Abstract

This paper investigates how the market values co-benefits—the positive effects of climate action on sustainable development goals (SDGs)—within climate finance. Using a comprehensive methodology and econometric analysis of the Clean Development Mechanism (CDM), the authors find that projects with a higher likelihood of delivering co-benefits received significantly higher prices (30.4% higher for projects with the highest co-benefits compared to the lowest). Projects with Gold Standard certification, indicating a higher likelihood of co-benefits, also commanded a price premium (6.6%–29%). This research highlights the importance of integrating co-benefits into climate finance to enhance social and political support.

Publisher

Communications Earth & Environment

Published On

Jun 17, 2022

Authors

Jiehong Lou, Nathan Hultman, Anand Patwardhan, Yueming Lucy Qiu

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