Publication - MAKING CARBON FINANCE WORK FOR CLEAN COOKING
has increased six-fold since 2018, surpassing a total value of USD 2 billion for the first time in 2021 due to a combination of increasing transactions and rising carbon credit prices. The average price of carbon credits generated by clean cooking activities has more than doubled as a result of this recent market surge, further cementing the business case for carbon finance.
Since the inception of the voluntary carbon market, clean cooking activities have issued 25 million carbon credits as of early 2023. This represents one-third of all cooking industry issuances to date, with the remainder being attributed to improved cooking programs. Based on this historical carbon credit issuance volume and historical pricing data, an estimated USD 150 million in aggregate carbon finance value is estimated to have been generated by clean cooking activities worldwide over the past decade, with annual transactions reaching USD 35 million by 2020.
Not all of these financial flows are trickling down to activities on the ground. With carbon projectdevelopers finding it challenging to gain direct access to end-users of their carbon credits, transactions are often facilitated through intermediaries. These span from middlemen such as brokerage firms and traders that connect buyers with sellers, to more sophisticated project aggregators and specialized investment funds that can offer upfront funding and assist with the entire carbon project development process. Though data is scarce, intermediaries can charge transaction fees for these services, with margins on transactions typically falling between 10 to 30 percent.