With the current pipeline of clean cooking activities showing potential to leverage USD 800 million between 2023 to 2030 through carbon finance, the voluntary carbon market (VCM) offers a real chance for advancing progress towards modern energy access. Globally, an estimated 4 billion people are without access to modern energy cooking services. Shifting to clean cooking solutions has potential to both improve and save lives. Access to finance to scale implementation remains a leading barrier, however. Achieving universal access to clean cooking by 2030 is estimated to cost up to USD 4.5 billion annually, but finance flows over the past decade have peaked at only 2 percent of this.
Carbon finance offers a real opportunity to make clean cooking more accessible. With the current pipeline of clean cooking activities showing potential to leverage USD 800 million between 2023 to 2030 through carbon finance, the voluntary carbon market (VCM) offers a real chance for advancing progress towards modern energy access. By helping to de-risk investments and provide an alternative source of income, carbon finance can contribute to scaling up clean cooking ventures.
However, the voluntary carbon market finds itself at a crossroad. Without a stable source of compliance demand, the market depends on a positive reputation to foster growth. In this report, we explore the key trends likely to impact the flow of carbon finance to clean cooking in the near-term. We reflect on how this is likely to play out for the clean cooking sector, and what the role of project developers, carbon credit buyers and carbon standards are in influencing these outcomes. The market’s ability to retain investor and buyer confidence, combined with clarity on the impact of the Paris Agreement, is what will ultimately shape its future.
This report is part of a series of publications developed with the UKAid-funded Modern Energy Cooking Services programme, exploring voluntary carbon markets and clean cooking. In addition to this report, two briefing papers will be published; one exploring how clean cooking projects track their impact on the Sustainable Development Goals, and the other outlining business models through which clean cooking industry actors can engage in carbon markets.