Social Carbon
http://www.socialcarbon.org
Overview
Additionality and Quantification Procedures
Overview
Type of Standard and Context
Social Carbon Methodology (SCM) was developed by the Ecológica Institute (Brazil) in 1998. Social Carbon is not a full offset standards. It is a methodology that focuses on enhancing co-benefits such as biodiversity and active participation of local communities. It is usually used in conjunction with another standard, such as the VCS or CDM.
Standard Authority and Administrative Bodies
The Social Carbon Methodology (SCM) was developed by the Ecológica Institute (IE), a non-profit, independent offset project developer based in Brazil. IE is the legal holder of the SCM trade mark. In 2008, IE formed a partnership with CantorCO2e, an international offset project developer and offset trader. CantorCO2e formed the Social Carbon Company, a for-profit carbon offset retailer based in São Paulo who has been the main developer of offset projects using SCM. Social Carbon Company is the first organization accredited by Ecológica Institute to apply Social Carbon Methodology.
The Ecológica Institute is in charge of accrediting other organizations who wish to use the SCM. This procedure qualifies institutions to develop Social Carbon indicators and reports and guaranties that Social Carbon concept and fundamental steps of the Methodology are being carried out by the Parties.
Auditors of SCM projects are called Certifying Entities. Current projects have been audited by DOEs, yet SC also accepts auditors from full standards that have been accepted to be use in conjunction with the SCM (e.g. VCS) and auditors that have ‘proven experience in the validation/verification of projects with a scope of carbon credit commercialization in compliance (mandatory) and non-compliance (voluntary) markets.’ (Social Carbon Accreditation Procedure for Certifying Entities Version 01, March 2009). SC plans to request Certifying Entities (auditors of Social Carbon) to sign an Accreditation Commitment Agreement with the Ecológica Institute.
Regional Scope
Currently, most SCM projects have been developed by the Social Carbon Company. All existing projects are located in Brazil, however, the SCM is not regionally specific and can be applied elsewhere.
Recognition of Other Standards/ Linkage with Other Trading Systems
Because the SCM is a methodology for monitoring co-benefits of offset projects, and not a full offset standard it is usually used in conjunction with another full standard, such as the VCS. The VCS is usually used for VER projects, although SCM has been used in conjunction with the CDM as well.
Market Size and Scope
Tradable Unit and Pricing Information
SCM-certified VERs (in conjunction with another VER standard) and CERs (in conjunction with the CDM).
Participants/Buyers
Businesses, mostly VER buyers.
Current Project Portfolio
There are 25 projects currently registered with Social Carbon; 19 are active and 6 are pending.
Offset Project Eligibility
Project Types
Because the SCM is usually used in conjunction with outside standards, Social Carbon does not set its own project type restrictions. Rather, projects must demonstrate that the project type complies with a Social Carbon-approved outside standard (e.g. VCS, CDM).
Project Locations
The SCM can be applied to projects in any country, although all currently active and pending projects are located in Brazil.
Project Size
Because the SCM is usually used in conjunction with outside standards, Social Carbon does not set its own project size restrictions. Rather, projects must demonstrate that the project type complies with a Social Carbon-approved outside standard (e.g. VCS, CDM).
Start Date
Because the SCM is usually used in conjunction with outside standards, Social Carbon does not set its start date rules. Rather, projects must demonstrate that the project type complies with a Social Carbon-approved outside standard (e.g. VCS, CDM).
Application of the SCM begins with the “initial diagnosis,” an assessment of baseline social, economic and environmental conditions to establish a “Zero Point” against which a project’s future contributions to sustainable development will be measured. Although the methodology can be applied at any stage in a project’s development, including after the issuance of credits, project credits are only eligible for accreditation once the initial diagnosis has been completed.
Crediting Period
Because the SCM is usually used in conjunction with outside standards, Social Carbon does not set its own crediting period restrictions. Rather, projects must demonstrate that the project type complies with a Social Carbon-approved outside standard (e.g. VCS, CDM).
Co-benefit Objectives and Requirements
The Social Carbon Methodology is designed to ensure that offset projects make significant contributions to sustainable development throughout their lifetime. Initially SCM focused on forestry projects but the methodology can now be used for other project types. SCM uses a set of analytical tools that assesses the social, environmental and economic conditions of stakeholders affected by the project. Six aspects of each sustainability project are individually measured using the Social Carbon hexagon:
Biodiversity Resource: It represents the combination of species, ecosystems and genes which form the biological diversity. Biodiversity Resource is the balance of the natural physical environment. The following aspects are relevant in this component: the integrity of natural communities, the way people use and interact with biodiversity, the state of conservation, pressures and threats imposed on native species, and the existence of overriding areas for conservation. In some projects where impacts over biodiversity cannot be measured in a direct way, this resource is replaced by the Technological Resource which assesses the conditions of access to technological assets, including the innovation of equipments and processes focusing on their contribution to economic, social and environmental development.
Natural Resource: It is the stock of natural resources (soil, water, air, genetic resources) and environmental services (soil protection, maintenance of hydrological cycles, absorption of pollution, pest control, pollination, among others), from which those resources derive.
Financial Resource: It is the basic capital in the form of cash, credit/debt and other economic goods which are available or potential. They are also the physical and technological structures which enable the financial giro.
Human Resource: They are the skills, knowledge and capacities for work and life which people possess, in addition to good health. Human Resource is the individual and all which he represents.
Social Resource: They are the working networks, the social demands, social relations, relationships of trust, and associations in social organizations.
Carbon Resource: It refers to the type of carbon project developed, encompassing the methodologies utilized, project performance and the involvement of stakeholders.
(Social Carbon Guidelines 2009, p.6)
Co-benefit criteria are established and monitored through the following process:
1 - Selection of Social Carbon Indicators for the Project: Sustainability indicators are chosen in order to monitor the project’s contribution to sustainable development during its expected lifetime. These indicators are project specific and based on the description of the social and environmental impacts and/or benchmark analysis.
2 - Social Carbon Report: Projects developer must report how the selected indicuators are measured and monitored. The report must include the results from site visit, and interviews with stakeholders. Annual reports are recommended, although other periods might be accepted, according to the periods of verification of emission reductions.
3 - Verification: Periodic verifications must be carried to assess a projects co-benefits. The project must show that at least part of the identified co-benefits are being developed and that the project has not lead to a decrease in sustanability benefits.
Additionality and Quantification Procedures
Additionality Requirements
Because the SCM is usually used in conjunction with a full outside standard, Social Carbon does not set its own additionality criteria but relies on the outside standard to do so. If project developers choose to rely solely on SCM as the project standard, Social Carbon advises adoption of the additionality guidelines and standards established by the CDM Executive Committee.
Quantification Protocols
Because the SCM is usually used in conjunction with an outside standard, Social Carbon does not develop its own protocols criteria but relies on the full standard to do so.
Project Approval Process
Validation and Registration
The Project Design Document must be validated and verified by an independent third party, based on the outside standard accepted by the Social Carbon.
The Social Carbon Report also needs to be validated and verified and must:
- Be based on the assessment of compliance with the Social Carbon Guidelines criteria.
- Include a local visit for the collection of information and evidences.
- Have as result the Social Carbon Validation or Verification Report.
(SC Guidelines 2009, p.18)
Validation and verification of offset projects that use the SCM in conjunction with another standard should preferably be consolidated into a single validation or verification report.
Leakage
Leakage is not addressed in the SCM.
Permanence
Permanence is not addressed in the SCM.
Monitoring, Verification and Certification
The SCM recommends annual verification but longer intervals might also be accepted depending on the outside standard used.
Registries and Fees
The SCM registry is managed by TZ1, an Environmental Registry service used by many other voluntary offset standards as well. Their pricing schedule is as follows:
| Joining Fee (per account) | Account Fee (per user) | Issuance (per tCO2e) | Transactions (per tCO2e)** | Retirement Certificate | Account Closing (per tCO2e) | |
|---|---|---|---|---|---|---|
| VCS | USD 500.00 |
USD 100.00 |
USD 0.05* |
USD 0.03 |
USD 200.00 |
USD 150.00 |
| Social Carbon | USD 500.00 |
USD 100.00 |
USD 0.02 |
USD 0.05 |
USD 200.00 |
USD 150.00 |
* Additional VCSA Levy of EUR 0.04 also applies
** Buyer pays transaction fee
Selected Issues
Co-Benefits
The Social Carbon Methodology is one of several standards and methodologies that have been developed to strengthen co-benefits of offset projects (see CCB Standards, Plan Vivo, and Gold Standard).
SCM’s requirements for co-benefits are defined in general terms and do not include specific rules. For example, "the project developer must only provide a brief description about the potential positive and negative social, economic and environmental impact" (SC Guidelines 2009, p.19). Environmental Impact assessments are only needed if required by law. Also, no in-depth evaluation of co-benefits is necessary:
The description of the contribution of project to sustainable development does not demand new researches, but must be based on other existent sources of information, as for example: reports, results of consultation with stakeholders, similar projects or opinions of experts. In case the information are insufficient or controversy concerning the impacts of the project, the Social Carbon Team or Certifying Entity may ask for complementary studies.
The Social Carbon does not establish absolute requirements to the performance of indicators, but the commitment to continuously improve the social environment performance of enterprise.
(SC Guidelines 2009, p.19)
No Separation of Verification and Approval of Projects
Under the Social Carbon Methodology, it is the auditors themselves that approve projects. Given the pressures on auditors and conflict of interest discussed earlier, the lack of an accrediting board could be a potential weakness of the standard.
The Future of the Social Carbon Methodology
Currently 20 out of the 25 projects listed on the TZ1 registry are developed by the Social Carbon Company, owned by CantorCO2e, who commercialized and translated the SCM. Also, all the listed projects are located in Brazil and are fuel-switching projects in ceramic tile factories.
Because all of the issues mentioned above, it remains to be seen if the SCM can establish itself as a robust co-benefits standard.
References
Social Carbon Guidelines, Version 3, 2009.
Social Carbon Accreditation Procedure for Social Carbon Methodology Application, Version 1, 2009
Social Carbon: The Sustainable Carbon Company