The Economics of Clean Cooking Projects

2024-01-16 16:02

We describe below the (simplified) economics of clean cooking projects:

A clean cooking stove can cost anywhere between $2 per stove to over $100 per stove, depending on the technology used and thermal efficiency characteristics of the stove. Additional costs exist for distributing the stoves to target audiences, as well as for monitoring and impact reporting.

Each stove can yield between 3 tCO2e and up to 9 tCO2e carbon emission reductions per stove per year, depending on the baseline emissions assumed (with more frontier markets such as Somalia or Burundi having a higher emissions starting point), and based on thermal efficiency of the stoves (with more thermal efficient stoves having lower project emissions).

The carbon crediting period is between five and 10 years (seven years under Gold Standard’s methodology, and 10 years allowed under Verra’s Verified Carbon Standard).

Usage rate of stoves over the carbon crediting period varies widely, and is often expected to come down over time. The longer the verification period, the lower usage rates are expected over time. A donation-led model (where the cookstove is fully subsidised and donated by the carbon project developer) and a sales-led model (where the stove is paid in full or partially by the end user) can yield largely different usage rates. Donation-led models have on average lower utilisation rates and higher leakage risks than sales-led models, as in some cases recipients decide to re-sell the stoves in the secondary market.

Current prices of carbon credits in the market range between $7 to over $10 per carbon credit, depending on vintage, project and developer quality.

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