Can carbon revenues help transform household energy markets? A scoping study with cookstove programmes in India and Kenya

Efforts to bring cleaner, more efficient stoves to the billions of people who use traditional biomass for cooking and heating have gained new momentum in recent years, driven both by longstanding health and environmental concerns, and by a growing recognition of the importance of modern energy access for development. In this context, carbon finance is emerging as an attractive option to help scale-up cookstove projects, through the Clean Development Mechanism (CDM) and through voluntary markets, where demand for credits from cookstove projects has been rising rapidly.

However, little research has been done on how cookstove projects are using carbon finance. In order to address this gap, the authors conducted an in-depth review of the project design documents (PDDs) for 75 carbon-financed cookstove projects in India and Kenya. They also interviewed 49 stakeholders along the value chain, including cookstove project implementers (both carbon-financed and not), households, NGOs and cookstove and carbon market experts.

A consensus is emerging among policy-makers and donors that a market-based approach is needed to scaleup cookstove initiatives and ensure their long-term sustainability. The literature on cookstove initiatives and prior SEI research suggest that projects face two key challenges: motivating households to adopt and use the new stoves, and securing adequate resources for project implementation, including startup costs, market research, product development, outreach and promotion, finance for users (e.g. microloans), and after-sales support and monitoring. The analysis presented in this report focuses on how carbon finance might help or hinder projects in meeting those challenges.

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