The imperative to provide universal access to reliable and clean energy is increasingly well recognized (Banerjee et al. 2013), and has led to international commitments such as the UN’s Sustainable Energy for All initiative. While 1.3 billion people lack access to electricity, more than double that number — about 3 billion, mainly in South Asia and sub-Saharan Africa — still rely on solid fuels for cooking and heating (IEA 2012). Traditional biomass fuels such as firewood, charcoal and dung are typically burned in small, simple stoves or open fires that are not only inefficient, but emit a great deal of...

This report uses case studies of India and Kenya to examine the potential for carbon finance to help cookstove projects successfully scale-up and begin to transform local markets. It should be noted that most cookstove projects engaging with carbon finance are still in the relatively early stages; for example, only 10 of the 75 cookstove projects we reviewed had already issued credits. Thus, it is difficult to know what impact the carbon revenue will ultimately have. However, by examining how various types of actors are using (or plan to use) carbon finance within their business models, and how this fits...

This section provides a brief introduction to carbon markets, a few different methodologies for carbon finance, and an overview of carbon markets and improved-cookstove activities in India and Kenya.

Carbon credits (offsets) can be used for compliance with emission reduction obligations under cap-and-trade systems, or for voluntary emission reductions. Each offset programme has its own set of approved methodologies for quantifying the volume of emission reductions achieved for each specific project type.

The UN-approved standard for offsets comes from the Clean Development Mechanism (CDM), which was created under the Kyoto Protocol with a dual purpose: to reduce the cost of...

In this section we present the findings of our review of project design documents (PDDs). The analysis includes only registered projects: 43 in India, and 32 in Kenya. We gathered information on project characteristics, including developer type (NGO or business and international or national) and market context (urban or rural). We examined how projects proposed to use carbon finance, including stove pricing, use of offset credit revenue, distribution model, and accounting for end-user adoption rates. We also looked at whether a barriers analysis had been conducted, and if so, what it found. For consistency, we based our review solely on...

This section presents the results of our field research in India and Kenya. As noted earlier, although in some cases we interviewed cookstove actors about projects included in our desk review of PDDs, there is no direct correspondence between the interviewees and the projects reviewed in Section 4. Instead, the interviews focused on how carbon finance might help or hinder the achievement of the key criteria underpinning market transformation discussed in Section 2.

We interviewed a total of 17 actors involved in accessing carbon revenues to support the implementation of cookstove initiatives: five from NGOs, two from social enterprises, one...

Drawing upon the insights from our research in Kenya and India, this section provides a more in-depth discussion on the benefits and risks associated with using carbon finance in cookstove projects. As we noted in Section 2, the scope of our study is too narrow to generalize our findings beyond the Kenyan and Indian contexts; however, we do want to highlight several issues that warrant further exploration.

The findings of our study suggest that the use of carbon finance can benefit — and sometimes even strengthen — the business model for improved cookstove interventions, in two key ways. First, the...

As mentioned at the outset, the limited scope of this study — focused on India and Kenya — does not allow for broad generalizations based on our findings. However, in this section, we present some general observations based on the evidence collected, and end by suggesting areas for further research.

The focus of our study was to investigate the role of carbon revenues in developing markets for improved cookstoves. However, it is also important to ensure the environmental integrity of carbon-financed cookstove projects — that the credited emission reductions are real, additional, quantifiable, verifiable and permanent. This means, among other...