This year’s State of the Voluntary Carbon Markets 2013 report showed that carbon markets are funneling more and more money into projects that distribute low-carbon cookstoves. Now, a new initiative seeks to propel the adoption of these offset projects even further, with an eye toward contributing to the dissemination of two million improved cookstoves by 2017 in Southeast Asia and West Africa.
29 July 2013 |The Bonn International Cooking Energy Forum in Germany was the site for the unveiling of StovePlus, a program to provide residents of developing countries in Africa and Asia with alternatives to inefficient cookstoves. GERES, the French non-profit organization behind the new program, aims to distribute 2 million improved cookstoves in these regions by 2017 through StovePlus.
Nearly 3 billion people in the world rely on solid biomass for cooking and heating on a daily basis, but most of them use inefficient devices and open fires, leading to 4 million premature deaths every year, according to the Global Burden of Disease Study commissioned by the Institute for Health Metrics and Evaluation. Reliance on biomass also puts great pressure on natural resources, putting the world’s forests at risk, GERES notes.
The StovePlus program aims to strengthen the clean cooking sector and provide technical support to project developers in South-East Asia and West Africa, with the support of the Global Alliance for Clean Cookstoves (the Alliance). The Alliance provides funding to the GERES Biomass Energy Lab in Cambodia, one of the services offered in StovePlus. In 2012, the Alliance released a request for proposals (RFP) to enhance capacity for a global network of centers to provide testing, cookstove development, and capacity building services. Thirteen centers were selected for awards in Bolivia, Cambodia, China, Ghana, Honduras, India, Kenya, Nepal, Nigeria, Peru, Senegal, South Africa, and Uganda (lab and field). Under the RFP, $1.6 million was made available to support these centers.
Cookstove projects can provide significant health benefits and empower women – who often walk long distances to collect the necessary wood fuel for heat or cooking purposes – by freeing up their time and increasing their household income, says Jennifer Tweddell, Manager of Carbon Finance and Impact Investing for the Alliance. In addition to reducing greenhouse gas (GHG) emissions, the projects also have the impact of reducing deforestation, she says.
Clean cookstoves have become all the rage in the voluntary carbon markets, with voluntary buyers funneling $80 million toward offsets from these and water filtration projects last year, according to the State of the Voluntary Carbon Markets 2013 report. These household devices that burn fuel more efficiently or not at all (thus reducing GHG emissions while sparing households from harmful smoke inhalation) were the voluntary market’s fourth most popular mitigation activity – transacting 5.8 MtCO2e, or 80% more than in 2011. These projects have so far delivered at least 4 million cookstoves from 45 projects to developing country households with the aid of carbon revenues, the report finds.
In 2012, carbon finance for clean cookstove distribution reached 15 country locations on three continents, according to the report. The most prominent project locations included Peru, Ghana, Mozambique and Kenya.
Developers of cookstove projects are determined to secure buy-in from stove users, with only 2% of clean cookstove projects engaged in stove giveaways and the majority of projects charging users between $2 and upwards of $140 per device, a finding that pleased Tweddell.
“We’re very much in favor of a market-based approach so we’re glad that there aren’t a lot of free giveaways because we really feel that to be sustainable and to reach universal adoption, which would be 500 million households, you can’t do that on donor dollars and (corporate social responsibility),” she says. “You do that through having a thriving marketplace where people at the base of the pyramid are consumers who go out and actually purchase these products from social enterprises that are also making a profit doing that.”
Transactions of clean cookstove offsets were valued at $65.3 million in 2012 – 54% more than in 2011. Over time, the value of private sector support for clean cookstove carbon projects is estimated to be $145 million.
The average price for offsets from clean cookstove projects was $11.3/tCO2e in 2012, representing a 15% fall in price from 2011’s $13.2/tCO2e. The price decline was attributed to the growing volume of available cookstove project offset supply and a lack of clarity regarding certified emissions reduction demand in the European Union Emissions Trading System – a source of demand for some clean cookstove offsets. But the price for cookstove projects was well above the volume-weighted average price of $5.9/tCO2e of all project types seen in 2012.
“I really do think it’s because of all the additional benefits that these projects bring,” Tweddell says. “Certainly, you can tell a really great story about having a health benefit, improving the lives of people in developing countries, as well reducing your carbon emissions.”
In trying to attract investment, the Alliance often hears people talk about the crash of the carbon markets, but the report is very useful because it provides evidence of the higher prices commanded by these charismatic projects, she says.
“That helps us to demonstrate the value to potential buyers, but also to investors who often don’t understand the carbon markets and are a little bit leery of businesses that are reliant on carbon revenues,” she says.
For more findings on cookstoves and other voluntary carbon projects, read the Ecosystem Marketplace report here.
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