MEC Response To Down To Earth Article on Household Projects in Voluntary Carbon Market in India

Author:
Posted: October 29, 2023

Recently, Down To Earth magazine published an article based on a report by the Centre for Science and Environment on the state of the Voluntary Carbon Market in India. The article was well intentioned in that it calls for transparency and community centricity in the industry and shines light on the scope for improvement which is a valuable gift to the sector. However, it omits important context that requires a deeper dive into several factors, the absence of which may predispose readers to an erroneous or misleading set of conclusions.

MicroEnergy Credits (MEC) is a social enterprise that has become a leading developer of high quality carbon projects in India. MEC was not contacted by DTE or CSE for information or comments on its projects. The report does not discuss any of MEC’s projects. However, it mentions MEC’s name, and it discusses activities adjacent to MEC’s carbon programs. Since it strives to preserve sector expertise and transparency, MEC would like to provide some additional clarification.

Community Centricity

MEC is a social enterprise that empowers rural and low income women by connecting them to affordable clean energy products. MEC raises carbon funding from international corporations and sends that funding into India, directly to local community based financial inclusion organizations. MEC works with these organizations to develop sustainable clean energy lending programs.  So far, MEC has channelled over $18M from abroad to support local community organizations in India, including nearly 8M households. The MEC model encourages local economic development by enabling households to access microloans for clean energy rather than giving away products outright. Decades of best practice show that giveaway programs result in products which are not valued and are discarded or remain unused. The vast majority of MEC’s funding to local partners is earmarked for training of community energy officers, client education, last mile distribution, and after sales and customer service to support continued usage of the products. 

Maintaining a sustained relationship with the client and regular monitoring of product usage is an important part of MEC’s carbon program. MEC works with microfinance institutions which typically meet with clients every week or two weeks. These meetings serve the purpose of reinforcing the behaviour change needed for sustained efficient stove adoption. Moreover, these meetings create a timely opportunity for clients to access aftersales service for their products. 

Rural cooking behaviour is a nuanced topic. One way to think about it is that it is a ladder. Ten years ago, most rural households in India used traditional chulhas for cooking. Since then, many of these households have been able to access improved cookstoves that reduce smoke and reduce the amount of wood needed — much of this progress has been achieved with the help of climate finance, and this is one of the successes of the carbon market. Going a step ahead on the ladder, many households have been able to access LPG as a result of successful government policies. In the future these people will be able to use induction stoves powered by electricity. It is MEC’s objective to empower our women clients to climb up this clean cooking ladder by accessing the clean energy technology that works best for them and maximizes their health, wealth, education and resilience. 

Robust Methodology & Transparency

The article alleges that the industry is shrouded in secrecy, and that there are no rules in the voluntary carbon market. However, the carbon market sector has developed a vast set of  methodologies and standards:

  • The carbon credit calculation mechanism includes international standards, detailed methodologies and stringent third party audits which ensure that climate action matches the claims made by corporations. MEC has extensive experience working with these mechanisms. For the past seven years, MEC has also worked with the Governments of Switzerland (Climate Cent Foundation) and Sweden (Swedish Energy Agency)  to develop its model. 
  • Achieving a carbon issuance requires adhering to an extensive and  detailed set of rules, methodologies, and audits. MEC posts significant transparent information about its programs on its website and for standards and auditors. 
  • Carbon price information is kept private in order to negotiate with offtakers to maximize the funding to be achieved for the local communities. To date, MEC has transferred over 95% of revenue generated from carbon funding to carbon issuance requirements, carbon fund raising, clean energy R&D, and field activities. 
  • End user information, however, is not shared because of privacy compliance.
  • MEC maintains detailed budgets for partner clean energy programs and receives utilization reports of the funds received to ensure that the carbon finance generated from carbon-related activities is reinvested back into the clean energy programs and thereby directly into communities.

An important part of MEC’s program is communicating through the microfinance partners with the end-client that they are a part of the local organizations’ carbon program. This conversation happens at the time the product is purchased and MEC maintains meticulous accounting records of this.

Conservative Emission Reduction Calculations

A significant claim made by the article is regarding the over estimation of emission reduction as the main problem with cookstove projects. 

Even if a household has multiple cooking technologies, that will not create an over estimation of the carbon credits generated. The GS and Verra methodologies are aware of this practice, and therefore require that if the household is using LPG in addition to their improved cookstove, the carbon project must deduct that portion of usage from the emission reduction. This is verified by the auditor at the beginning of the project and in annual third party verifications. Thus, even if a project design document estimates a high emission factor, that does not mean that that full factor can be claimed in issued credits each year. These final annual calculations are publicly available in documents called Emission Reduction sheets.  

Compared to the carbon programs mentioned in the article, MEC’s program is much more conservative. The carbon programs in the article used emission reductions of 2.3 tonnes/year (GGI/ Gold Standard)  and 5.7 tonnes/year (Enking/ Verra) respectively. Meanwhile MEC calculates a more conservative total potential annual emission reduction of 1.2 tonnes/year under the CDM and 2.3 tonnes/year under the Gold Standard. MEC’s carbon credits are more trustworthy than many other project developers, and international companies that fund clean energy through MEC’s program can make a stronger claim on their carbon emission reduction impact.  

MEC’s monitoring parameters are also in line with the sector science. A recent article from the University of California at Berkeley examined overcrediting in the Voluntary Carbon Markets. MEC’s program falls well within the 2-4 MJ/capita/day of useful energy for cooking as identified in that article. 

A wake up call and scope for improvement

While the woman interviewed in the article was not from MEC’s program, her voice is important. It is clear that she was able to access an improved cookstove, and that she was able to have it repaired. However, she did not have a robust awareness that she was part of a carbon program. She was also not satisfied with the aftersales service. MEC believes that it is a sign of progress that she would use both an LPG and an improved stove, as this combination is a common step on the energy ladder and an improvement over improved cookstoves alone. However, she also said she continues to use the traditional chulha, which may indicate a lapse in awareness of the harmful health impacts of smoke. MEC and all players that are committed to accessing carbon funding to create truly sustainable social impact can and must continuously reform our programs to improve awareness and long term behaviour change within our communities. 

MicroEnergy Credits is the most trusted name in social impact carbon credits.

Our mission is to empower every microfinance community with access to affordable and innovative clean energy solutions, while moving towards a world free of both poverty and climate change.