Cleaner cooking projects in the UN carbon market will have to set aside a share of their credits to insure against the risk that the trees they save are lost to fire, drought or logging, after the market’s regulator rejected calls to exempt the sector.
The requirement is part of a new rulebook that the Paris Agreement carbon market regulator – the Article 6.4 Supervisory Body – approved last Friday for programmes that aim to cut emissions by distributing new and cleaner cookstoves in regions that still burn wood or charcoal for cooking.
These are the UN mechanism’s first rulebooks for cookstoves, one of the carbon market’s most popular credit types and also one of its most criticised for overstating climate benefits.
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Cleaner cooking projects in the UN carbon market will have to set aside a share of their credits to insure against the risk that the trees they save are lost to fire, drought or logging, after the market’s regulator rejected calls to exempt the sector.
The requirement is part of a new rulebook that the Paris Agreement carbon market regulator – the Article 6.4 Supervisory Body – approved last Friday for programmes that aim to cut emissions by distributing new and cleaner cookstoves in regions that still burn wood or charcoal for cooking.
These are the UN mechanism’s first rulebooks for cookstoves, one of the carbon market’s most popular credit types and also one of its most criticised for overstating climate benefits.
They consist of two methodologies: one for programmes that aim to cut greenhouse gas emissions by distributing more efficient cookstoves that burn less wood or charcoal, and a separate methodology for projects shifting households to lower-emissions cookers running on electricity or liquid petroleum gas (LPG).
Mkhuthazi Steleki, the South African chair of the Supervisory Body, said “this decision gives cleaner cooking projects a new pathway under the UN carbon market, with clear rules to ensure that each credit represents a real and credible emission reduction”.
Exemption push rejected
More efficient cookstove projects earn credits based on the amount of carbon they save by preserving trees that would have otherwise been cut down and burned for fuel. But if those trees later burn in a wildfire or are logged, the carbon stored would be released anyway, erasing the climate benefits of the credits.
Several carbon credit developers, conservation NGOs and the UN Environment Programme (UNEP) disputed that cookstove projects face this risk, in what critics described as a “coordinated lobbying campaign”.
They argued that, unlike forest protection schemes, this type of credit represents a “flow” of avoided emissions rather than a “stock” of stored carbon that can be released. They also warned that requiring a buffer would impose disproportionate costs and undermine the financial viability of these activities.
But the UN carbon market regulator was not persuaded by the argument. It decided that projects would have to protect against this reversal risk by handing over a percentage of credits to a so-called “buffer pool” instead of selling them.
‘New paradigm’
The amount of credits to be given up is calculated by applying different methods for natural risks, like wildfires, droughts or hurricanes, and human-caused ones, such as logging or land clearing.
For natural risks, project developers will need to apply local risk values derived from new modelling published by a group of independent scientists.
Campaigners have broadly welcomed the decision. Federica Dossi, an expert at Brussels-based advocacy group Carbon Market Watch, said it sets a new paradigm for calculating reversal risk based on empirical data. “This approach is grounded in science and we hope to see this now being adopted by other carbon crediting mechanisms in the voluntary market,” she added.
Backers claim this method is more rigorous than current practice in the voluntary carbon market, which largely relies on expert guesswork.
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Pushback over science
As Climate Home News previously revealed, the same industry and NGO groups that sought an exemption from the “buffer pool”, along with some corporate buyers, criticised the use of a study backed by the UN carbon market’s experts that recommended the new risk assessment approach.
The groups pushed for more flexible rules that would have allowed natural risk values drawn from other sources, including national databases, or from the project developers themselves.
While the Supervisory Body rejected this approach, it gave project developers and countries the option to propose alternative values that would first need to be vetted by the mechanism’s expert panel and then approved by the regulator.
A carbon market expert told Climate Home News that, while it is too early to say how this provision will be used, they expect requests will have to be backed up with solid scientific evidence, lowering the risk of unfounded claims.
Policy discounts questioned
To guard against human-caused risks, projects will need to apply a flat 20% value set by the Supervisory Body, at the bottom of the 20-45% range recommended by its technical experts ahead of last week’s meeting.
That value can be further reduced by up to two-thirds if the host country has an emission-reduction plan covering forests, a long-term climate strategy and a framework for the UN’s REDD+ forest protection scheme.
Injy Johnstone, senior research fellow at the Munich-based Max Planck Institute, said that, while these are important governance measures, their existence does not necessarily demonstrate that the underlying risk of forest carbon loss has been reduced.
“It is important to distinguish between evidence of actual risk reduction and assumptions about the effectiveness of policy commitments,” she added.
Moving target
A UN source told Climate Home News that, under the approved formula, improved cookstove projects must set aside at least 9% of credits linked to saved wood if they operate in the lowest-risk areas and the host country can claim all available discounts. The share of credits rises significantly in regions with high natural risk values, such as Guyana, Sri Lanka and Timor Leste, or that do not have REDD+ programmes.
These factors could change in the future as the Supervisory Body asked its technical experts to recommend revisiting the risk values “should credible new evidence arise”.
Climate change is likely to make forest destruction events, such as wildfires or hurricanes, more frequent and more severe in certain regions. Meanwhile, national policies on forest protection can shift significantly depending on government changes.
Johnstone said the UN carbon market needs periodic reassessment to respond to new evidence showing that previously assumed levels of risk were too low.
“The integrity of credits is not guaranteed simply because a reversal risk tool exists,” she added. “The real test will be whether the mechanism provides equivalent atmospheric protection over time, rather than simply introducing another layer of accounting requirements”.
