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.
