20 July 2023
How economic SDG claims can be impactful in the VCM
Natural Capital Intern
Research Manager, Sustainable Development Goals
Please note that the content of this insight may contain references to our previous sector classification system. You can find details of our updated system, effective since July 19th 2023, here.
Sustainable Development Goals (SDGs) 1, 8, & 12 address, respectively: poverty; employment growth; and consumption and production. These goals are commonly known as the ‘economic SDGs’. Thus, in the VCM, projects often use them to demonstrate their economic co-benefit impacts. However, it can be difficult to effectively communicate economic co-benefit impacts through SDG claims. SDGs were not designed for the VCM and there are significant country and project data gaps. However, a selection of the SDG 1, 8, & 12 indicators are appropriate for VCM use and can have significant impacts in the VCM.
The economic SDG indicators are to some extent appropriate for use at the VCM project scale. As much as 9.5% of the indicators are scalable from national to project scale.
Lower Income Countries (LICs) have relatively low progress towards SDG 1 & 8. Therefore, the economic impacts made by carbon projects located in LICs have high potential for additionality.
The economic SDGs do not have a significant influence on carbon credit prices compared to other SDG claims. On average, credits with SDG 1 claims lead to a 25% premium compared to any other SDG claim. But, credits with SDG 8 and/or 12 claims have lower prices (0.8% lower, 8.5% lower).