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Greenhouse gas emissions reduction, carbon sequestration, and climate adaptation. For those working to create a sustainable environment that benefits those living in poverty.

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"Household Energy and Carbon Finance"

To mark the publication of Boiling Point 54 on Climate Change and Household Energy HEDON CarbonSIG and Eco Ltd held a two-week online conference.

The topics covered were:
  • What is carbon finance?
  • How to develop a project
  • How to ensure communities really benefit
  • Monitoring impacts - greenhouse gases and other benefits
  • Knowledge sharing, networking and policy action - what are the next steps?

An e-conference is one which will be held online via the internet (without any travelling or meeting face to face). While a physical meeting is certainly to be preferred, the online format allows for greater flexibility, much lower costs, and wider involvement of stakeholders. Another advantage is that people can 'attend' the conference while continuing their normal work, dedicating an hour or two to the conference early morning or each evening for example. Our e-conference will take place by email, supported by papers and other documentation to be made available on our website. After the conference, proceedings will be prepared and circulated via the CarbonSIG web pages. Participation in our e-conferences is free, and no travelling or accommodation was needed. We invited submission of short relevant papers, and we welcomed contributions (in the form of notes / questions / suggestions) during discussions.

Papers and Proceedings

Session 1: January 9-13th Views on the carbon market

Wednesday 9th

Conference Welcome

James Robinson, Eco Ltd and the HEDON Network

Boiling Point 54 Theme Editorial: Carbon finance for clean cooking – time to grasp the opportunity

Philip Mann, Oxford University

Philip Mann of the University of Oxford Environmental Change Institute is the theme editor for Edition 54 of Boiling Point. His editorial gives an excellent overview of many relevant issues including an update of events at the recent UN Climate Change Conference in Bali. He also summarises the other articles presented in this conference

Due to prior commitments Phil will be joining the conference at a later date, so this paper is presented in his absence
Articles by GTZ and Bailis et al can be read in the full paper or digital versions of Boiling Point

Thursday 10th

Credible Carbon Offsets for African Households: The Need for “Carbon Plus” Investments

Dean Cooper, The PACE Centre, South Africa

Climate change mitigation and the development needs of Africa are two subjects that are currently attracting great international attention. But matching the two through existing carbon mechanisms is proving to be very difficult. Private sector carbon markets, as with other commercial operations, perceive too great an investment risk in Africa. For carbon, only large-scale projects are generally considered, often with significant doubts over their additionality. The great potential for carbon savings from households supplied with efficient and alternative energy systems is currently being overlooked. The global climate change impact of appropriate energy supplies for growing household energy demand in Africa, and the associated development benefits for local residents, are not part of the current framework. This suggests that a new approach is required.

Some key questions for discussion are:
  1. Can CDM be effective for households in poor countries?
  2. Who should take the lead in future carbon-saving activities: governments, international donors, private business or individual householders?
  3. How can carbon investors be convinced to support longer-term development needs by paying more for sustainable carbon reductions in poor countries?

Friday 11th

The experience of Practical Action with CO2 offsetting in funding development activities for poor communities.

Dr. Teodoro Sanchez, Practical Action

This article discusses the different alternatives for carbon financing, for community based household energy projects, from the perspective of an NGO working with communities on the ground

"Climate change financial mechanisms started with the signature of the Kyoto Protocol in 1997 and one of the most successful in terms of transactions is the Clean Development Mechanism (CDM). This mechanism has had a slow start, but has achieved considerable growth in the last 2 years (the transactions in 2006 were around US$30 billion and for 2007 it is estimated that the total transactions will be around US$60 billion so a 100% increase).

The CDM has two main objectives: a) to reduce emissions and b) to support sustainable development in developing countries. However there are still concerns about the real contribution of the CDM to improving the livelihoods of the poor. To date, the main beneficiaries of this Mechanism have been the large economies in transition (China, India and Brazil) while the poorest economies have received few benefits, so far, mainly due to a lack of technical, financial and institutional capacity in these countries.

The Voluntary carbon market has been around longer than the CDM and is much more flexible, so has greater potential to fund projects and programmes that will deliver substantial development benefits. However this market still has questions to address regarding environmental/development trade-offs, monitoring, accountability and credibility."

The questions to consider in this conference paper include:
  1. How strict or flexible should the rules be for the voluntary carbon market in order that it can deliver meaningful development benefits as well as satisfy environmental requirements?
  2. In terms of the ethical issues of Carbon offsetting- is it right to offset in another country without reducing emissions in your own? Or is it acceptable as can be seen as an opportunity to reach the poorest and improve their lives?
  3. How realistic is the use of the CDM in contributing to the development of the poorest countries and the poorest communities?

Session 2: January 14-17th Carbon Methodologies

Monday 14th

Carbon Finance for Healthy Kitchens

Adam Harvey, Pioneer Carbon, Oxford UK, Nairobi Kenya

In the paper I suggest some reasons why carbon finance could move things forward significantly. Certainly there is an overload of box-ticking and a focus on CO2 emission reductions which does not necessarily match people's development needs. On the other hand, the stove designs have to fit needs to be successfully marketed, since it is users who decide to pay more for an improved stove and who choose to actually continue using it or not - the monitoring requirement of carbon finance looks at actual use. Therefore carbon finance complements the dissemination organizations and companies on the ground who are focused on real needs and real marketing, and it does not pose a risk of distraction. I would like to suggest some discussion more on the potential than on the constraints (which I accept are very real).

1) For example, people respond to marketing and promotion. Since carbon finance can be big money, does this mean that very intensive promotion is affordable and could improve the cooking conditions of a whole country quite fast?

The paper I present mentions that finance very large-scale programs will soon be possible under the Gold Standard for the voluntary market. Pioneer Carbon / Climate Care is willing to provide this finance, so write to us if you would like to start a large project. It will also be possible under small-scale CDM projects sometime next year, and hopefully these can be multiplied under programmatic rules - Pioneer can also help develop these CDM projects and finance them.

2) One question that comes up, is whether the CDM small-scale rules will require that the renewability of wood is treated as a fraction, or always 100% or 0%. The paper explains what I mean. Does anyone have knowledge or an opinion and how this might go next year with the CDM?

3) Personally I think that the fractional approach is very difficult to do, but has tremendous potential as a practical method of actually achieving environmental management (since all wood-fuels would be properly graded and certified), so we should do it and carbon finance can pay for it. Anybody have an opinion on this?

4) In the article I mention that the monitoring load for carbon financed projects is very heavy. Again, since there is enough money there to pay for it, this is excellent, because it ensures that stoves are well designed so people actually use them – if they fall out of use, the finance, paid after monitoring, disappears. It is out-put based aid. Anyone disagree or agree?

Wednesday 16th

Why current assessment methods may lead to significant underestimation of GHG reductions of improved stoves

Michael Johnson, University of California

"Robust methods to estimate carbon offsets are an essential component of the accountability required for credible trading of carbon offsets from small-scale residential energy use. The critical components are the estimation of emissions in relation to fuel consumption and the non-renewable fraction of biomass use.

Current approaches to carbon offset estimation rely on IPCC default emission factors derived from controlled water boiling tests (WBTs). We demonstrate, however, that the use of these default emission factors resulted in up to a 64% underestimation of carbon savings as a result of installation of improved Patsari stoves in Mexico. This underestimation is due to emission factors not representing daily cooking activities. Since several other improved biomass stove projects in different areas of the world have demonstrated that the WBT is also not indicative of fuel consumption during daily cooking activities, it is likely that the IPCC default emission factors will be of equally limited utility in estimating carbon offsets achieved by other projects.

Similarly, using WISDOM-based estimates, we demonstrate that the fraction of non-renewable biomass harvesting estimated at the national level substantially underestimates community-level non-renewable biomass use, as national estimates incorporate biomass that is not accessible for harvesting by local communities due to topography or distance from the community. Since the non-renewable status of biomass harvesting greatly impacts the estimation of carbon offsets, the use of national WISDOM estimates also results in a significant underestimation of carbon offsets."

So some key questions for discussion are:
  1. To what extent is the purchaser of an offset entitled to verification that what he purchased was in actuality an avoided emission to the atmosphere, and who has the responsibility for providing this information?
  2. Many projects will have different levels of documentation to verify the offsets have been made, which will provide carbon offset estimations with greater or lesser degrees of uncertainty. In order not to exclude projects where information is more sparse, but yet provide incentive for projects to help provide the most complete documentation, to what extent should carbon pricing reflect the uncertainty in the carbon offset estimation?
  3. Who does the carbon offset belong to; the person cooking, the organization who developed and disseminated the stove and provided a cost rebate, the local government? How can we use carbon trading to provide incentives for long term adoption and use of improved stoves?

Session 3: January 18-20th Experience from the field

Friday 18th AM

Can Carbon Finance Clean Cooking?

Dick Jones, CarbonAided

"Although the first Millennium Development Goal (MDG) includes halving the proportion of the world’s people who suffer from hunger, most efforts to meet the MDGs ignore the fact that over 90% of staple food requires cooking for long periods and that the majority of the poor cook using unsustainable methods, often resulting in sickness or death from indoor air pollution affecting the achievement of other MDGs..

For the poorest communities, despite the low cost of clean cooking, the initial cost is a major barrier. Carbon finance is potentially a way of overcoming such a barrier. However, at the time of writing, although there have been a number of discussions on the topic, the CDM doesn’t support cookstove projects unless they replace fossil fuel. This is fine for places like China where coal is the current fuel but in most of poorest communities in Africa and Asia this is not the case and CDM projects are not possible.

An alternative is the voluntary market but this can also present difficulties. Since at present there are no CDM approved methodologies dealing with cookstove projects for which the baseline is unsustainable biomass we come back to the same problem. Though the Gold Standard is working on a cookstove methodology based on non-sustainable biomass, it will be some months before this will be finalised. The Gold Standard is thus ruled out for the time being.

CarbonAided Limited, like other similar organisations, are trying to develop our own methodologies but there is a need for a coordinated push to get the CDM and Gold Standard to approve methodologies that will cover cookstove projects replacing non-sustainable biomass. The Hedon Network is potentially a very powerful forum for pushing this forward and CarbonAided stands ready to work with Hedon to get the D put back into the CDM in this most important area."

My questions for discussion are:
  1. Are Hedon members doing as much as they could be to drive the carbon finance agenda faster and speed up benefits to the poor?
  2. What should Hedon and its members be concentrating on?
  3. Who should drive improvements in sustainable and healthy cooking? Should it be the private sector, NGOs or a partnership between them?
  4. What is the role for companies such as CarbonAided?

Friday 18th PM

Marine conservation and energy efficient stoves?

Ellie La Trobe-Bateman, Blue Ventures Carbon Offset

Blue Ventures, a UK based marine conservation charity and a not for profit expedition organisation, has this year established a carbon offset programme in Madagascar as Blue Ventures Carbon Offset (BVCO). The first of BVCO’s projects are subsidising and distributing energy efficient stoves in partnership with the Association pour le Développement de l'Energie Solaire Suisse-Madagascar, (ADES). Both solar-powered and energy efficient stoves are being used to help communities reduce their wood and charcoal fuel use, thus helping to reduce deforestation; reduce smoke related illnesses; improve cooking safety; reduce CO2-emission, reduce monetary & time costs related to cooking fuel use for households.

The BVCO project started in one small village and now through the support of other business and the Tourism Industry Carbon Offset Service (ww.ticos.co.uk) hopes to replicate the project to other villages in the area and a new project in Morondava. All projects will incorporate a monitoring programme to enable remote management, verification and communication of the project to others. This monitoring protocol is currently being worked on by BVCO and Eco Ltd.

My questions for the conference are:

1) The potential of the tourism industry for providing finance for stove projects
Can the tourism industry be involved in the funding of more stove projects? Particularly if a tourist operator was focused in a particular country? What are the opportunities available through TICOS?

2) Monitoring stove projects for carbon finance
Developing a monitoring protocol for all stove projects - can one size fit all? Can the experiences of BVCO be useful to other stove programmes or are they all too different?

3) What comes first - finance / monitoring?
Should carbon finance only be given to projects shown to be making a reduction? But if they are already showing reductions then there is no need for finance? How best can monitoring be used for continued finance, and how does a project bring in the initial finance to establish itself?

Session 4: January 21-23rd Knowledge sharing, networking and policy action - What are the next steps

Monday 21st

The Carbon Solidarity Co-operative - Helping to transform the household cooking sector

Samuel Bryan, Geres Cambodia

"Improved cooking stove programs utilising carbon finance are only operating at the margins of household energy use. As the ultimate goal of interventions is sectoral transformation, a massive scale-up of present levels of dissemination is required. Furthermore, to offer viable alternative development pathways, project developers must also address the entirety of the biomass fuel cycle and the development of the next generation of biomass technologies.

Programmatic CDM might provide a framework to achieve this goal. However the majority of project developers in the field lack the capacity and inter-organisational co-ordination to initiate interventions at the program level. One option would be to establish a collective of project developers to ensure equitable access to carbon finance for project developers and integrity of credits to buyers."

So some key questions for discussion are:
  1. Is it a realistic model to develop capacity amongst NGO's so that they can bring projects to markets? Can it cost effectively deliver high quality emissions reductions?
  2. How much time and resources would NGOs be able to invest in a co-operative?
  3. How much work will developers be willing to do to produce high-quality credits? The highest quality carbon will require organizations to change their management practices.
  4. Would carbon buyers be interested to buy from a Cooperative, when the express purpose of said cooperative is to get a better price for the carbon? The advantage to buyers would be access to a portfolio of different types of carbon projects regionally, but would it push them to look elsewhere?

Wednesday 23rd

How to develop a project: Open email session

So far the presentations and most of the discussion has come from people already involved in carbon offset projects - but for those of you who are new to the topic and would like to get involved, then this is the chance for you to ask your questions!

We had indicated that one of the topics to be covered was 'How to develop a project' but it's proved difficult to find a comprehensive guide on this subject! So to help you along I've created a 'New to the Topic?' section (See below) and in it are some recent presentations on carbon finance from ARECOP and PCIA events, as well as some more detailed project material for your interest. Hopefully I'll be adding some more information over the next few days.

To those already involved with carbon offset projects (i.e. Carbon companies and NGO's) - do you have any information that you feel people might find interesting (especially what you're looking for in a stove project to make it suitable for carbon finance) - if so please email them to me at james at ecoharmony.com and I'll post them on the conference website.

Friday 25th

Summing up and next steps

The main themes from the conference will be summarised and used to plan the direction that the CarbonSIG group takes over the coming months.

We'll also introduce the 'CarbonSIG MarketPlace'
The CarbonSIG Marketplace is a resource / business directory designed to help projects find carbon finance brokers, brokers find projects, and both projects and brokers identify service providers. Users will need to first login to HEDON before adding an entry to the Marketplace. If you're posting then be sure to include your contact details. You can even include a link to your HEDON page or to new pages you have created packed with more details about your organisation. The site can also be accessed from the contents menu on the CarbonSIG pages.

Sunday 27th - Conference email list closed
The Conference email list will be closed and any further emails will be directed to the general CarbonSIG list.

Discussion documents

Biomass Renewability
Last edited by Miriam Hansen .
Page last modified on Tuesday October 12, 2010 14:25:19 GMT.
  • A practitioner's journal on household energy, stoves and poverty reduction.

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