Insight Series: Ecosystem Marketplace Cheat Sheet–What is a Social Impact Assessment?

May 12, 2010
By admin

No man is an island—but even if he were, it’s never that simple.  Social impact assessments provide us with a user guide to these often island-esque project sites, along with a long list of do’s and don’ts (do make as much positive impact as possible.  Don’t destroy stuff).

April 2010 When Japan’s Dojima Rice Market pioneered rice futures 300 years ago, it succeeded in part by establishing stringent standards of quality and clear guidelines of accepted behavior designed to ensure a fair and transparent market.  The Chicago Board of Trade did the same for corn, wheat, and soybeans more than 100 years later, and every successful market has done the same ever since.

Markets that fail to establish such standards and guidelines usually die a quick death – or, worse, succeed as markets but fail as deliverers of value to society at large, as we’ve seen in the unregulated markets for over-the-counter derivatives.

Environmental markets are no different, which is why participants have created scores of standards and guidelines to help policymakers and project developers estimate the environmental impact of their actions before they are implemented.

Early standards and guidelines focused on the impact that projects had on nature, but they failed to fully measure the impact of such projects on society.  That’s why the International Association for Impact Assessment ( created the “social impact assessment” (SIA).

Putting People First

SIAs are designed to help policymakers and environmental project developers foresee the impact that their actions will have on the people living in and around the project area.  Such projects should obviously avoid harming local communities, but ideally they will also generate positive ‘co-benefits’ for people living in and around the project area.

These co-benefits can range from the creation of jobs to the preservation of cultural values to the building of schools.  From the developer’s perspective, these additional advantages serve to strengthen the project and may even be considered to have market value if properly maintained and bundled with existing ecosystem service products.

Easier Said than Done

The challenge of SIAs can be summed up as one of how to combine credibility and economy, in view of the already high transaction costs facing land-based carbon projects. SIAs need to effectively identify not only the good that flows from a project, but – perhaps more importantly – the negative and unexpected social impacts.  They also need to define acceptable quality levels.

Without appropriate guidance and research, these projects can lack the evidence needed for approval at a verification audit stage of the game.  Properly implemented, they help ensure a project that benefits those around it.  Poorly implemented, they amount to little more than greenwash.

What and How

Credible SIA involves providing answers to two key questions –what needs to be measured and how should it be measured.

The answer to the ‘what to measure‘question is closely tied to the concept of ‘attribution’ or causality, and the selection of indicators.  New standards such as the Climate, Community, and Biodiversity CCB ( standard, for example, require that projects demonstrate ‘additional’ and ‘net positive’ community impacts.

This involves showing that a project’s social benefits outweigh the negatives – or at least outweigh the benefits that would have been achieved if the project had never been implemented.  They also have to show that those benefits have been caused by the project rather than by other external factors – or, in other words, that they would not have happened anyway.

The ‘how to measure‘question relates mainly to data collection methods, especially measurement of the indicators.  This question may be easier to answer, since there is considerable guidance on appropriate data collection methods. Cost-effectiveness can in general be improved by developing a strong project monitoring and evaluation (M&E) system at the design phase.

On the Ground

Considerable methodological guidance exists for measuring the social and environmental impacts of development projects and other land management activities, but no clear guidance currently exists for carbon project developers on how to choose and apply appropriate and cost-effective methods. Initial analysis has found that many land-based carbon projects, although they are still at the design or early implementation stage, seem to be struggling with the challenge of conducting cost-effective SIA, and would greatly benefit from this type of guidance.

The social impact assessment (SIA) manual is being developed to accompany the Climate, Community and Biodiversity (CCB) Standards, the most prominent and widely respected standards for the co-benefits of land-based carbon projects. It aims to help project developers monitor the socio-economic impacts of their projects, and meet the verification requirements of the CCB or other comparable Standards. The concepts described in this manual will be relevant to a wide range of site-level land-based carbon activities, whether designed for compliance or voluntary markets.

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