Saša Eichberger (MBA;MSE; CMVP®) WEEC 2014, Washington DC, October 2014

More than 84% of East African households rely on traditional biomass cooking methods - being either an inefficient metal or clay charcoal stove, while the ‘three stone’ fire is

the choice of most wood users.

These practices are the source of major anthropogenic Greenhouse Gas (GHG) emissions. They have led to severe deforestation in the region. Household air pollution caused by smoke from cooking in poorly ventilated houses has negative health impacts,

especially on women and children.

Energy saving projects that distribute improved cook stoves (ICS) are providing affordable ICS across the continent. They improve household air quality and provide a

safer cooking environment. They are a vital part of the African solution of reducing GHG emissions and mitigating climate change. By tapping into finance from the Clean

Development Mechanism (CDM) and other opportunities, they are catalyzing changes in harmful cooking practices. The manufacture, distribution and maintenance of ICS is helping to spur local development and lowering the pressure on dwindling forestry

resources. The widespread use of non-renewable biomass as an energy source creates major carbon dioxide emissions and environmental destruction on a massive scale.

What is a carbon credit?

It is an emission “permit” or “reduction” (of one of 6 Greenhouse Gases) It is equivalent to 1 tonne of CO2 (tCO2e) It is either traded as an allowance or as a project offset The UN’s CDM is largely responsible for the growth in carbon credit trading The CDM has two aims: GHG emission reductions and the promotion of sustainable development

What is a CDM Programme of Activities (PoA)?

It is a carbon finance ‘umbrella’ that can cover multiple countries and an unlimited number of individual projects (CDM Project Activities - CPAs)

CDM PoAs are very appropriate for least developed countries (LDCs) in Africa, where the usual situation of many small projects can be covered by a single PoA

There are special rules (dealing with leakage, additionality, permanence, etc) and standard methodologies for calculating GHG emissions reductions

How to achieve GHG emission reductions and produce carbon credits by replacing polluting traditional stoves with ICS

ICS lower CO2

emissions which = carbon credits

Carbon credits are traded on the carbon markets:

Compliance & voluntary markets, with different demands for carbon credits Different standards for carbon credits exist (CDM, Gold Standard, etc) The European Trading Scheme as a major source of demand for compliance grade credits has been in distress since 2013; prices and volumes have dropped

Community and environmental benefits from ICS projects are important, and there are still good prices for carbon credits from ICS projects in Africa

Fairtrade International is likely to soon certify carbon credits

How do ICS PoAs support sustainable development?

ICS PoAs result in:

Reduced GHG emissions Affordable and maintained stoves

Reduced deforestation Reduction of respiratory illnesses caused by household air pollution

Improving people’s lives Reduction of time/money spent obtaining fuel wood

Reduction of burns and scalds Employment opportunities in the stoves industry

By providing stove suppliers with access to carbon finance, the

lower prices of ICS make them affordable to low-income

households. Additional benefits may include free stove

maintenance, community development projects, etc.

ICS PoAs support the

achievement of country-specific

sustainable development goals

(e.g. in Uganda - reducing

household air pollution,

increasing access to affordable

and clean energy, reducing

deforestation)

Developed and implemented by the UGANDA CARBON BUREAU, Kampala, Uganda

CDM registration in 2012, as the world’s first multi-country PoA (there are now 62), and Gold Standard registration in 2014

ICSEA covers Uganda, Kenya, Rwanda, Burundi, Lesotho and South Africa, with plans to include Tanzania, Malawi, Ethiopia and South Sudan

It is a demand-side energy efficiency PoA: the carbon credits are generated through energy savings by the more efficient use of wood fuel. The PoA currently uses the CDM methodology AMS-II.G, “Energy Efficiency Measures in Thermal Applications of Non-Renewable Biomass” for calculating the achieved GHG emission reductions and carbon credits. A Post Registration Change will shortly add the methodology AMS-I.E: “Switch from non-renewable biomass for thermal applications by the user” to permit the inclusion of projects that use renewable biomass – this will allow for a significant expansion of the ICSEA PoA’s reach.

All CPA projects keep 100% of their carbon credits. ICSEA Ltd is not a broker of its members’ carbon credits, but may support them with their carbon credit sales contracts. Members pay cost-reflective fees to join the PoA and for the services that they subsequently use. A fair trade ethos is a key feature of the PoA, which recognizes that the ownership of the carbon credits starts with the stove users. The PoA is ‘stove neutral’, with each stove supplier organization making its own decisions regarding the choice of the stoves that it supplies.

Monitoring Period September 2012 - March 2013

CPAs included/monitored 1 (International Lifeline Fund)

ICS in use 3000

Energy savings 19 GWh

GHG emission reductions 4,000 tCO2e

Since March 2013:

ICS in use in CPA1: 6200

Five more CPA projects in the process of inclusion

Goal until 2017: 18 CPAs with the potential of 1m ICS

The cost of accessing the carbon market via the ICSEA PoA is a fraction of the cost of developing a standalone ICS carbon project; ICSEA members just pay joining and annual fees

An unlimited number of ICS projects can be included, even if they are not currently identified. It is much quicker for stove supplier organizations to access the carbon market via the ICSEA PoA, compared to being registered separately with the CDM

The PoA managers know the carbon market rules – there is no longer a need for ICS supplier organizations to be experts in carbon finance. The negotiating strength of the PoA can get higher carbon credit prices for project owners who choose to join the PoA’s grouped sales facility, although this is not mandatory

Monitoring and verification services to earn the carbon credits are done on the PoA level, using a Salesforce database thereby reducing transaction costs

Fairtrade certification and the addition of projects that use renewable biomass Further improvement of M/E systems on the Salesforce database (e.g. GPS, mobile data collection on Android/iOS)

Improvements in the cost efficiency of ICSEA’s operations

The introduction of structured risk management processes, thereby reducing risks for investors and gaining more support for the inclusion of new members

Accessing carbon finance is still woefully difficult to achieve.

The ICSEA PoA is a practical way for African ICS projects to access long-term climate finance. This helps projects that get right to ‘the base of the pyramid’ (the very women

who use traditional cooking methods, with negative consequences for their lives).

The PoA umbrella structure was made for Africa, hence the number of registered PoAs – but the difficulties of achieving the issuance of carbon credits, and securing a fair price

for them, are still daunting.

Regional center of excellence for fair trade, open-access carbon market services based on the PoA project structure

Two regional PoAs registered (cook stoves – ICSEA and domestic biogas – ACES Biogas) The innovative combined adaptation/mitigation and

resilience-enhancing tree planting PoA (Forestry for Climate Adaptation & Carbon Storage in Africa - FOCASA) is in its final phase of development

Two renewable energy PoAs (the on-grid Sustainable Promotion of East African Renewables – SPEAR (which is in advanced registration) and a complementary follow-up one for off-grid projects)

PoA Support Initiatives: A Stoves Support Facility to help aspiring suppliers to

comply with the PoA’s requirements An Ignition Fund: a mechanism to obtain up-front money for

PoA members that helps to ensure that stove prices can be made affordable Capacity building and education through the not-for-profit

Carbon Foundation for East Africa (CAFEA) with its Climate Sense information program

A UCB Carbon Neutral service creating local demand for carbon credits

www.ugandacarbon.org

UCB’s Mission: “To make carbon market access available to projects on an affordable and fair trade basis via a regional PoA hub approach”