Carbon offsets are helping to reduce poverty – report

www.environmental-finance.com/
London, 26 June:

Finance from carbon offsets has an important role in helping improve the lives of poor people, according to a UK government report on the winners of the annual Ashden Awards for sustainable energy. "Well-designed carbon finance is an opportunity to improve energy access," the report says, noting that seven of the 10 winning projects were already using carbon finance or negotiating deals.

Around 1.6 billion people still rely of fuelwood and open fires for cooking, and 2 billion have no access to electricity, according to the report, and having access to energy "plays a crucial role in improving the lives of poor people." Four winners tap the voluntary carbon market, while three use, or are seeking to use, the Kyoto Protocol's Clean Development Mechanism to finance their projects. The activities include distributing wood-burning stoves to replace open fires, installing biodigester systems to provide gas for cooking and providing stand-alone solar electricity systems for homes.

This high take-up suggests that carbon finance could have a significant impact on access to low-carbon energy, concludes the report, commissioned by the UK's Department for International Development and written by the International Institute for Environment and Development. But the report notes: "There is sometimes a trade-off between reducing carbon emissions and reaching the poorest households. Carbon finance might therefore encourage SMEs [small and medium-sized enterprises] to target middle-income households where larger carbon benefits can be quickly achieved, rather than to prioritise the poor.

"It is encouraging that the socially-focused SMEs in this survey have taken a different approach, and are seeing the new carbon revenue stream as an opportunity to reduce end-user costs and thus bring energy services to poorer households." The report says the findings "highlight the need for further research into how carbon finance can best be designed to benefit the poor." The Ashden Awards were founded in 2001 by the Ashden Trust, one of the Sainsbury Family Charitable Trusts, to recognise sustainable energy solutions in the UK and developing world.