Published: Thu, Aug 25, 2011
Type: Case study

EcoSecurities specializes in sourcing, developing and commercializing carbon credits under the Kyoto Protocol and through voluntary markets internationally. EcoSecurities has a portfolio of 378 emissions reduction projects (post due diligence) capable of producing more than 101 million Clean Development Mechanism (CDM) credits to 2012.

In developing countries, EcoSecurities works with companies to create carbon credits from projects that reduce greenhouse gas (GHG) emissions. In industrialized countries, the company assists organizations in either meeting their compliance targets or fulfilling their voluntary emission reduction objectives.

In order to remain a pioneer in the field of climate change, EcoSecurities strives to continuously innovate by finding new ways to enhance the value of projects in its portfolio. This is particularly relevant for the voluntary carbon markets, where buyers tend to be more interested in the complete picture of impacts on sustainability, including socio-economic impacts.

To better understand how to measure socio-economic impacts, EcoSecurities applied the WBCSD Measuring Impact Framework to a landfill-gas-to-flare project. The Measuring Impact Framework is designed to help companies understand their contribution to society and use this understanding to inform their operational and long-term investment decisions, and to have better-informed conversations with stakeholders.

The project

The landfill gas collection and utilization project has the capacity to process over 2,000 tonnes of waste. BeforeEcoSecurities’sinvolvement, there was no system in place to actively capture or flare the gas generated by the landfill, so it was being vented into the atmosphere. Through the CDM, the company, in cooperation with a successful UK technology provider, invested in a highly efficient gas collection system and flaring equipment. The plant also has the potential to generate electricity through a modular electricity generation plant.

Development context

Some 2 million people live in the area of this project. The Measuring Impact Framework assessment area consists of the municipality, the communities surrounding the landfill and, more specifically, the settlement of 80 households adjacent to the landfill. There are a number of development issues in the area, particularly around the lack of land ownership. Many community members work in the nearby industrial area where multinational companies are located. However, unemployment is high and many people who have not found local employment commute to the capital; low-income families sometimes find work in construction or other low-paying jobs or separate recyclable waste at the landfill.

Objectives

Three objectives were identified for the assessment of the CDM project:

  • Identify key indicators that could be added to a CDM Monitoring Protocol from the Measuring Impact Framework that would enhance the visibility of a project’s social impacts;
  • Create an analytical framework for identifying appropriate indicators for climate mitigation projects;
  • Evaluate the feasibility and value of EcoSecurities implementing the Measuring Impact Framework across the portfolio, or certain project types or geographies in the portfolio.

Process

The assessment team, including two EcoSecurities employees, engaged stakeholders to evaluate the direct and indirect social impacts of the project, including members of the community and the manager of the landfill site. Questions addressed by the manager included those on the legal processes for the municipality, those regarding the process of concessions and how the municipality was incorporating social considerations into their decision-making processes regarding the landfill. The team also asked members of the community about their impressions of the management of the landfill, job opportunities in the area and management of the landfill during fire and health problems due to the proximity to the landfill.

Activities

This project provides a number of benefits, as outlined in the CDM project approval stage. The project also helps the host country fulfill its goals of promoting sustainable development by increasing employment opportunities in the area, diversifying the sources of electricity generation and optimizing the use of natural resources, while addressing health issues surrounding landfills.

To assess whether the project provided the intended benefits of well-managed landfill operations as well as to measure additional socio-economic impacts of the project, EcoSecurities started by identifying seven business activities or areas of impact: jobs, infrastructure, skills and training, procurement, corporate governance, environmental management and carbon credits.

Impacts

The landfill project has direct and indirect impacts on both the municipality and the communities in close proximity to the landfill:

  • Employment : The landfill currently employs 32 people in the recycling facility and 18 at the landfill site. However, none of the current jobs are sourced from the local area or the adjacent community. There is clear interest by the municipality to recruit people from the area;
  • Public health : The assessment revealed that the landfill was mismanaged for some time prior to the installation of proper equipment, which led to health problems in the community, including diarrhea, vomiting and skin problems;
  • Behavior changes : There has been a change in in awareness and behavior around waste management in the community. The municipality has designed a recycling program that is scheduled to be progressively introduced in the local area. An indicator that will measure its effectiveness can tell more about increased awareness of environmental issues across the community;
  • Enterprise development : Another future indirect impact may be the creation of small- to medium-sized enterprises to support the recycling activities of the landfill site. At the moment, the site handles 200tonnes per day of waste, with a capacity to increase to 2,000 tonnes per day. The recycling facility has the capacity to recycle tires, paper, plastic, tetra packs, PVC, glass and aluminum. A business support system could easily originate in the area to facilitate the commercialization of these recycled materials. This would also have an impact on employment;
  • Carbon financing : This has both direct and indirect impacts on the area—it generates demand for higher skilled jobs in carbon management, and the revenue received by the municipality from the sale of carbon credits can then be dedicated to financing more equipment or social programs. There is also a potential replication effect of other carbon projects in the region. As there is no requirement to install a landfill-gas-to-flare or energy project in the host country, projects will only go forward if there is a carbon finance incentive and/or major social pressure.

Management response, lessons learned and looking ahead

The assessment proved to be an eye-opener on the potential of the CDM to incentivize and inform better decisions, which could lead to impacts beyond the intended environmental benefits to include long-term social and economic development. It is clear that the CDM could be enhanced to capture more diverse projects and impacts on society. On the basis of this assessment, the Measuring Impact Framework is very useful for CDMand other carbon voluntary projects because of its robustness and ability to be adapted to multiple circumstances. However, it would need to incorporate a pass/fail result or a continuum (A, B, C, D scores) and include more explanation of the timing and cost implications for an assessment for the Framework to be overlaid on existing carbon standards.

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