12.1 Introduction
Efforts to provide clean cooking and water filtration facilities to the poor have been
pursued in earnest by aid agencies, government ministries and the
non-governmental sector for decades, though many initiatives have been stymied
by inadequate and inconsistent funding, the introduction of inappropriate technologies, and a lack of follow-up (Clasen et al. 2004; Baumgartner et al. 2007;
Lantagne et al. 2008).
In 2005, the international carbon market was launched under the Kyoto Protocol
and the concept of “carbon finance” entered the world stage. Carbon finance
marked an innovative approach to development finance in that it was designed to
harness the motor of private finance to goals for the public good by awarding
fungible “carbon offsets” for the delivery of development services that displaced
activities that would otherwise generate greenhouse gas emissions (UNFCCC
1997). Two years later, the voluntary carbon market was launched and remained
a viable channel for financing low-carbon projects even as support for the Kyoto
Protocol’s market mechanisms waned (Peters-Stanley 2013) The projects analysed
in this chapter draw from both the Kyoto Protocol’s market mechanism for developing countries, the “Clean Development Mechanism” (CDM) and the similarly
structured voluntary carbon market. While the CDM and the voluntary market are
both undergoing transformation as the Kyoto Protocol’s implementation period
draws to a close, consensus on the Paris Agreement at the 21st Conference of the
Parties to the UNFCCC in December 2015 indicates that market mechanisms will
continue to play a role in the upcoming climate regime. As such, lessons derived
from the first generation of carbon market efforts under the Kyoto Protocol are
relevant towards the design of the next generation of market-oriented climate
finance tools.
Projects that aim for a high social and local development component are called
“pro-poor carbon projects” (Verles and Santini 2012), “charismatic carbon projects” (Cohen 2011), “premium carbon” (The Gold Standard 2010) or “carbon with
a human face” (World Bank 2002). These terms encompass carbon projects
targeting the least well-off, either by introducing technological innovations to
underserved households or by being physically located in Least Developed Countries where the emissions footprint is already low and investment risks are high (and
therefore the incentive to invest in carbon reductions is minimal).
The majority of pro-poor projects are household-level interventions for
responding to basic needs, such as fuel-efficient cook stoves, water filtration
devices, and mini biodigesters that convert livestock and organic household waste
into gas for cooking and household lighting. Significantly, pro-poor projects
emphasize “co-benefits,” or sustainable development deliverables, to the project
recipients beyond offsetting emissions alone: they promise the creation of skilled
job opportunities, increased household income, improved health outcomes, etc.
Premium certification schemes, such as the Gold Standard for both the CDM and
the voluntary carbon market, specialize in verifying that both emissions reductions
214
J. Hyman
Efforts to provide clean cooking and water filtration facilities to the poor have been
pursued in earnest by aid agencies, government ministries and the
non-governmental sector for decades, though many initiatives have been stymied
by inadequate and inconsistent funding, the introduction of inappropriate technologies, and a lack of follow-up (Clasen et al. 2004; Baumgartner et al. 2007;
Lantagne et al. 2008).
In 2005, the international carbon market was launched under the Kyoto Protocol
and the concept of “carbon finance” entered the world stage. Carbon finance
marked an innovative approach to development finance in that it was designed to
harness the motor of private finance to goals for the public good by awarding
fungible “carbon offsets” for the delivery of development services that displaced
activities that would otherwise generate greenhouse gas emissions (UNFCCC
1997). Two years later, the voluntary carbon market was launched and remained
a viable channel for financing low-carbon projects even as support for the Kyoto
Protocol’s market mechanisms waned (Peters-Stanley 2013) The projects analysed
in this chapter draw from both the Kyoto Protocol’s market mechanism for developing countries, the “Clean Development Mechanism” (CDM) and the similarly
structured voluntary carbon market. While the CDM and the voluntary market are
both undergoing transformation as the Kyoto Protocol’s implementation period
draws to a close, consensus on the Paris Agreement at the 21st Conference of the
Parties to the UNFCCC in December 2015 indicates that market mechanisms will
continue to play a role in the upcoming climate regime. As such, lessons derived
from the first generation of carbon market efforts under the Kyoto Protocol are
relevant towards the design of the next generation of market-oriented climate
finance tools.
Projects that aim for a high social and local development component are called
“pro-poor carbon projects” (Verles and Santini 2012), “charismatic carbon projects” (Cohen 2011), “premium carbon” (The Gold Standard 2010) or “carbon with
a human face” (World Bank 2002). These terms encompass carbon projects
targeting the least well-off, either by introducing technological innovations to
underserved households or by being physically located in Least Developed Countries where the emissions footprint is already low and investment risks are high (and
therefore the incentive to invest in carbon reductions is minimal).
The majority of pro-poor projects are household-level interventions for
responding to basic needs, such as fuel-efficient cook stoves, water filtration
devices, and mini biodigesters that convert livestock and organic household waste
into gas for cooking and household lighting. Significantly, pro-poor projects
emphasize “co-benefits,” or sustainable development deliverables, to the project
recipients beyond offsetting emissions alone: they promise the creation of skilled
job opportunities, increased household income, improved health outcomes, etc.
Premium certification schemes, such as the Gold Standard for both the CDM and
the voluntary carbon market, specialize in verifying that both emissions reductions
214
J. Hyman