Improved Cooking Stoves and the Clean Development Mechanism

Introduction

Cooking stoves using wood fuel are the most common combustion devices in the world, and are used by over 2.4 billion people. Traditional cooking stoves are inefficient, and are linked to 1.6 million deaths per year from indoor pollution, according to the WHO. There is therefore an urgent need to speed up the dissemination of cleaner, more efficient and better ventilated stove technologies, and this is the justification and motivation behind this study. Such stoves could also reduce emissions of Greenhouse Gases. Despite extensive programmes to disseminate Improved Cooking Stoves (ICS), millions still rely on inefficient stoves, because many barriers to successful dissemination exist. These include technological, commercial and cultural barriers, but cost is often a significant barrier to dissemination. Therefore it is envisaged that revenues from carbon credits (for reducing greenhouse gases) could be used to help fund ICS dissemination programmes.

International carbon trading is seen as the most economically efficient means to mitigate global climate change, as greenhouse gas (GHG) reductions take place at least cost. ICS represent an as-yet missed opportunity for low cost GHG reductions, but before this opportunity can be realised, a number of technical, institutional and information barriers must be overcome. Literature exists on the methodologies of carbon trading for small scale projects, on the successful dissemination of ICS, and on the GHG reductions possible from certain ICS designs; however this literature lacks integration and application to the issue of ICS projects under carbon trading. This study seeks to integrate research in these areas, providing an assessment of the opportunities for carbon trading to support ICS programmes.

ICS and Greenhouse Gas Mitigation

Are GHG reductions really possible from ICS, and if so, which types of stoves are best suited to reducing GHGs? A large range of ICS designs exist, so a generalised conclusion that 'improved stoves reduce greenhouse gases' is not altogether helpful. All 6 greenhouse gases under the Kyoto Protocol must be considered for the purposes of the CDM, including many of the products of incomplete combustion (PICs) produced by cooking stoves (with the notable exception of Carbon Monoxide). Monitoring of stove emissions has been carried out in a number of studies, notably Smith et al (2000) in India. See the reference list at GHG Stove Emissions.

It is important to get an idea of the scale of GHG mitigation possible from ICS, therefore a global overview of the potential scale of GHG reductions, and the number of improved stoves that could be disseminated, will be made. The size of ICS programme needed to meet the requirements of buyers in the carbon market will be estimated also (i.e. how many stoves would it take to generate a sufficiently large number of Carbon Credits to be traded successfully?).

Feasibility of CDM projects

What is the potential for ICS programmes under carbon trading in practice? A key question is: do ICS projects fit into the rules of the CDM as they currently stand, and if not, how could these rules be adapted to favour ICS projects? How can baselines for ICS projects can be determined, and whether standardised baselines may be used, for example for particular stove designs in particular countries. Standardised baselines are advantageous in that they significantly reduce the transaction costs of CDM projects.

Possible monitoring protocols for ICS projects will be examined. Methods of monitoring are likely to include household surveys based on a sample of the devices, and costs could be reduced by combining monitoring with routine maintenance or follow up, or possibly with the use of a stove return scheme. Errors in baselines and monitoring will be characterised qualitatively.

Additionality for any project under the CDM needs to be determined (i.e. that the project would not have taken place anyway). This study will identify the types of barriers to implementation of ICS projects which could be used to show additionality.

In order to determine the practical feasibility of ICS projects under the CDM, an order of magnitude estimation of costs will also be determined. Costs include the costs of administering the programme, the costs of the programme interventions themselves, and the transaction costs under the CDM (which are likely to be relatively fixed).

Successful Dissemination

In order for carbon credits revenue to succeed in promoting improved cooking stoves, projects need to be successful in encouraging the uptake of efficient stove designs amongst the public. A review of the literature suggests that a non-subsidised, market-led approach to improved stoves, one that relies as much as possible upon existing markets and channels, stands far more chance of sustainable success than donor-driven, top-down approaches (ESD, 2000). Many stove programmes have not succeeded because they failed to establish consumer demand for their products, and therefore there was limited uptake and spreading. A successful approach demands commercialisation by removing barriers. This can be done by developing technical skills amongst stove manufacturers or artisans, developing entrepreneurial skills, and marketing improved stoves to the public. Section three will look at ways to improve the successful spreading of ICS, and develop a set of criteria for a successful ICS project.

The challenges in the household energy sector

Many countries in Africa are attractive from a CDM point of view because they have a very carbon intensive baseline of electricity production (dominated by diesel generators). This means that electricity related projects can be worthwhile. However, most household energy projects will not involve grid-connected electricity. The other attractive sector is cooking, which uses some 90% of all energy requirements in many rural areas of developing countries. Replacing inefficient cooking stoves with more efficient stoves (such as improved charcoal and ethanol stoves) can result in significant emissions savings, as long as stove designs are chosen carefully – not all improved stoves reduce greenhouse gas emissions. Critically, in order to claim CO2 emission reductions from offsetting wood use, one must show that the wood use in the baseline in non-renewable (i.e. contributing to deforestation and reducing net carbon stocks). Methodologies for doing this have not yet been specified, although a recent workshop at the FAO went some way towards doing this. The challenges of the African household sector in the carbon market include the following:

Transaction costs

CDM transaction costs remain relatively fixed because of the need to meet all the CDM procedural requirements, and Estimates for small-scale project transaction costs vary between $8,000 and $105,000 per project. As learning and experience in CDM projects increases and there is greater competition in the market, transaction costs may fall. Transaction costs represent up-front costs, but may be offset by a carbon consultant/buyer in return for a larger share of the emission reductions of the project – a 'success fee'.

Complexity

The more complex and difficult the project, the less likely it is to be taken up as a CDM project by investors. This is because investors wish to minimise uncertainty and risk, and may be unwilling to back a project where the outcomes are uncertain or where large amounts of research are needed to determine emissions reductions. For this reason, tried and tested project types, are more likely to succeed.

Risk

Increased investment risk in Africa will deter CDM investment, for example political uncertainty, or working with small, lesser known organisations or organisations with poor credit ratings. Projects that minimise risk will attract CDM investment, and therefore projects scaling up or replicating existing successful schemes (e.g. replicating a successful cooking stove programme) will be more likely to succeed.

Political environment

A stable political environment and good governance is necessary to attract CDM investment. In addition, the host country must have ratified the Kyoto protocol, and set up a Designated National Authority (DNA) to approve CDM projects.

Who is doing what

The following is a list of people working on CDM, carbon and stoves (feel free to add to the following - it is a 'work in progress'):

• HEDON has established a special interest group on Household Energy and GHG emission reductions called CarbonSIG. This is the meeting point for people working in the Cooking and Carbon sector.
• User: Jonathan Avis has done extensive research on household level and cooking stove projects in the carbon market at the Environmental Change Institute, University of Oxford, and now works for EcoSecurities Ltd, a UK based carbon trading company. Contact jonathan@...
• Phillip Mann, Senior Researcher - Energy in Developing Countries, Environmental Change Institute, University of Oxford is working actively on this issue. Contact: philip.mann@...
• Roger Samson, Executive Director, Resource Efficient Agricultural Production (R.E.A.P.) - Canada, Canada, Contact rsamson@... - Roger Samson and R.E.A.P are working on the development of a CDM stove project using the Mayon Turbo Stove.
• Claude Tournellec (contact claudetour@...) and Jean-Francois Rozis (contact rozisjf@...) are currently working on CDM procedures concerning an ICS in Cambodia within the structure CFSP (Cambodia Fuelwood Saving Project - Website: http://www.cfsp.org.kh).
• User: Grant Ballard-Tremeer - is working on the development of improved institutional and SME stove projects for funding by the Global Environment Facility. Medium Scale Projects for Kenya and the Southern African Development Community are currently being reviewed by the GEF. Contact: grant@...
• Climate Care is a voluntary carbon market which invests in CDM-like projects. They have been working on carbon reduction stove and biogas projects in India, Bangladesh, and Madagascar - see www.climatecare.org/Projects for details.