Funding boost for small-scale renewables

Sensemaking / Funding boost for small-scale renewables

Reforms in carbon counting mean more investments in pro-poor projects.

24 Nov 2011

Reforms in carbon counting mean more investments in pro-poor projects.

Simple, small-scale green technologies, such as clean cookstoves for poor households, could soon find it easier to get carbon funding, thanks to changes in the UN’s Clean Development Mechanism (CDM).

Set up under the Kyoto Protocol, the CDM allows industrialised governments and businesses to meet their carbon reduction commitments by buying credits from schemes in developing countries which have been proven to cut carbon, while also providing some social benefit.

The lion’s share of the funding has gone to large scale projects, such as those reducing emissions from factories, or investing in huge new wind farms. Many such schemes are in major emerging economies, such as China, India or Brazil. These provide substantial, easy-to-calculate carbon savings. Critics point out that smaller, household or community level projects – including cookstoves and biogas plants – might actually be more effective at delivering both lasting carbon savings and lifting people out of poverty. But the administrative and technical challenge of calculating precise savings in each case often proves prohibitive.

Now, however, the CDM Board has announced two new guidelines which should go some way to overcoming these barriers. The first allows for the use of ‘standardised baselines’ in calculating emissions levels for particular technologies, such as a given type of cookstove, based on laboratory and field tests. The second provides for the use of a broad ‘business as usual’ approach to estimate how much CO2 would have been produced in the absence of the low-carbon alternative under consideration. (For example, how much carbon would be emitted by a typical ‘dirty’ traditional cookstove – the sort that could be replaced by a clean burning version.)

This should make it easier for small-scale schemes to apply for and win CDM funding. And it could make them more appealing to governments and companies, too, many of whom would prefer to buy credits from projects which help African women enjoy healthier lives than ones which make marginal reductions to pollution from vast Chinese power plants.

Edward Hanrahan, Executive Director at carbon offset providers ClimateCare, says the CDM’s new guidelines could save small-scale schemes “weeks of man hours” in research and administration, and encourage investment from industrialised countries.

But not everyone is convinced. Ben Garside, researcher at the International Institute for Environment and Development, is more sceptical. He’s concerned that standardised baselines place too much emphasis on estimates of future carbon savings, which may turn out to be too optimistic. He would prefer to see funding directed to helping poorer countries adapt to climate change by developing resilient agriculture, as well as clean energy. – Nick Huber

Photo: Martin Wright

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