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In terms of non-monetary benefits, carbon projects may provide improvements in natural capital (e.g.
improved timber stocks and cleaner/more stable water supply), physical capital (e.g., community
infrastructure: schools, health clinics, and roads), social capital (e.g. improved community organization
and more secure land tenure) and human capital (e.g. skills and knowledge in business administration
and natural resource management through training) (Grieg-Gran et al. 2005; Bond et al. 2009; Tacconi et
al. 2009; Wunder 2008). Carbon projects may also involve direct and indirect costs for society that can
potentially outweigh their intended benefits (Peskett et al 2008).
Review of Observed or Likely Benefits and Costs According to the SLF ‘Capitals’
The following sections summarize our understanding of the likely impacts of land-based carbon projects
on the five main capital assets of the well-known Sustainable Livelihoods Framework (SLF).
Financial Capital
Financial benefits are commonly offered to local people in order to incentivize or compensate for the
adoption or abandonment of land use practices that reduce greenhouse gas emissions and/or foster
carbon sequestration functions in the landscape. These benefits may come in the form of direct carbon
payments (to individuals or the community) or alternative commercial or employment opportunities.
Some studies show that carbon projects (and payment schemes for other environmental services) can
supplement household incomes, but to date there is little evidence of the long-term impact of monetary
income on poverty (Jindal 2010, Tacconi et al. 2009, Corbera et al. 2008; Grieg-Gran et al. 2005; Bond et
al. 2009) 12
Because projects imply both benefits and costs for local people, it is understandable to find evidence of
net gains as well as net losses. The Noel Kempff Mercado Climate Action Project (NK-CAP) in Bolivia is an
example of a REDD initiative that has provided a modest but positive net per capita gain for local people
(Wunder 2008). In that case, the project compensated for local jobs that were lost when timber
concessions were retired by facilitating new opportunities in carbon monitoring, harvesting and
processing NTFPs, micro-enterprise development, and park management (Smith & Scherr 2002). On the
other hand, a review of four watershed services and carbon sequestration projects in Mesoamerica
found cases where payments did not cover opportunity costs or what farmers perceived to be a fair
price (Corbera et al. 2007). In other situations it is not clear if the net benefits are positive or negative. A
study of the Trees for Global Benefits (TFGB) project in the Bushenyi District of Uganda found it difficult
12 An analysis of the potential of agricultural soil-carbon projects concluded that carbon contracts that providing
cash or in-kind payments can boost aggregate income in rural areas, but impacts on poverty will be relatively small
(Antle and Stoorvogel 2008). Evidence does however exist for significant improvements in household income in
PES programs in Costa Rica and Ecuador (Wunder 2008).
Social Impact Assessment of Land-Based Carbon Projects (1.0) – Part II | 82