Assessing the transparency and integrity of benefit sharing arrangements related to voluntary carbon market projects

In recent years, issues with the integrity of carbon crediting have gained more attention. This includes both the quality of carbon credits and the way how carbon credits are being used.  In this context, an important emerging question is how and to what extent the benefits from carbon credit sales are shared with those implementing the projects and the local communities where the projects are located. Often, carbon crediting project developers are companies or organizations that are specialized in carbon crediting projects and operate globally but are not members of the local communities where the mitigation projects are implemented. This issue has gained attention from different stakeholders in the Voluntary Carbon Market (VCM). Non-governmental organizations (NGOs) have been criticizing that there is a lack of transparency with regards to information on whether and to what extent the profits from carbon credit sales reach local stakeholders and to what extent local stakeholders get involved in project development.

This study takes a first step in evaluating how benefit sharing arrangements are treated in the VCM and how they are being implemented. The study assesses different aspects of benefit sharing agreements, including:

• Any (emerging) requirements set out in the standards of the main carbon crediting programmes related to benefit sharing agreements;
• How high the level of transparency of the information reported on benefit sharing is, especially with regards to the provision of evidence of actual implementation; and
• What the overall integrity and fairness of benefit sharing arrangements is, with a view to understand what portion of monetary and non-monetary benefits are actually flowing to local stakeholders and whether this portion is fair.