Monitoring the Efficacy of Carbon Credit Cookstove Projects

A fascinating article on carbon credits from cookstove projects ran in the print edition of the Washington Post today. Generally, cooking over open wood or charcoal fires is dangerous and environmentally harmful, and so facilitating upgrades to domestic cookstoves has been viewed as beneficial. Because of the environmental harm, selling carbon credits based on these upgrades has been viewed as a source of funding for cookstove projects designed to accomplish this goal. The majority of the article describes the failures of a specific cookstove project in Mozambique, apparently because of the faulty design of the stove itself, which was designed to be cheap and easy to repair, but was just too cheap to be functional in the area investigated.

The article is full of interesting information, not just for people interested in carbon credits, but for anyone interested in attempts to improve the world. While I don’t know much about the carbon credit market, the article caught my eye partially because I wrote an article back in 2015 about joint ventures between for-profit and nonprofit firms, and the example I chose to illustrate the risks and potential benefits was a (fictional) cookstove project in Mozambique. The article in the Post almost seems like a parable designed to illustrate the core idea behind the economic justification for the non-profit form: that when the quality of services is hard for a funder to monitor, the for-profit business form may be inefficient. Here, the funder is the purchaser of a carbon credit, and the “service” is the replacement of an inefficient cookstove with a more efficient one. Unless there is robust monitoring of the effectiveness of the replacement, the business is incentivized to cut corners. That’s not some evil greedy perversion of human relations, it’s how competition works. The article quotes the CEO of a “cookstove sensor company” as saying, “The most cynical way to think about it is, as long as I shove a stove into a lady’s house, I’m going to get the carbon credit.” If the funder just wants the credit, its going to want the least expensive credit.

One solution to that is for carbon credit purchasers to require better monitoring, for example through cookstove sensors, recognizing that a credit based on false information has no actual value. Another solution, of course, is for government(s) to regulate the carbon credit market to require a greater level of monitoring. Another solution is monitoring by charitable nonprofits, which is discussed in the article. Significant information in the article comes from Verra, a 501(c)(3) organization devoted to verifying carbon credit programs. But, of course, as in any certification program, the question of the quality of the certification, and the monitoring on which it depends, is key to understanding how much trust can be placed in its efforts. Someone has to believe that high-enough quality monitoring is worth its price to someone. And, as always, detailed reporting by trustworthy media, like the Post, can have an important role to play as well, but someone’s got to pay for that too.

--Benjamin Leff