EDITORIAL: We know the VCM is in need of reform, but what about processes that feed into the market?

Quantum Commodity Intelligence – The cleaner cookstoves sector is once again a focus of market attention, following the release last week by the UN Framework Convention on Climate Change (UNFCCC) secretariat of recommendations for updating a key metric used to determine emissions reductions.

A UNFCCC consultation is open until November 3 on a revised, more dynamic approach to measuring and applying the fraction of non-renewable biomass (fNRB) for cleaner cookstoves projects, which aims to measure the volume of firewood collection in project areas above what can be sustainably harvested.

Controversy about the fNRB calculation has dogged cookstove projects ever since they were widely adopted under the Kyoto Protocol's Clean Development Mechanism in the late 2000s. Several analyses claim that flawed assumptions about fNRB, as well as other metrics, has led to many cookstoves projects having been hugely over-credited.

Out-of-date assumptions

The UNFCCC secretariat's note added that many project developers are still using the most out-of-date, and therefore least conservative assumptions, despite what it said have been effective attempts to improve the metric through various reboots.

Scepticism this year has deterred corporate buyers and weakened prices. Recent analysis by Quantum of cleaner cookstove carbon credit prices showed some credits have dropped by about 30% from mid-September to mid-October. For example, Vintage 2020 Gold Standard (GS)-certified African clean cookstove credits were assessed at $4.60 a tonne of carbon dioxide equivalent (tCO2e) on October 12, down from $6.60/tCO2e on September 12, for a transactional volume of 20,000t.

The price of these credits has since recovered slightly to $4.90/tCO2e, but this is still less than half the price of the same offsets at the start of the year, when the Quantum assessment was $10.45/tCO2e. Current global economic uncertainty has been a factor in the price falls, but market participants also cite a drop in demand because of buyers' reluctancy to invest in the wake of negative media coverage.

A lot of media and NGO attention, including reports in the business press in India and even in a story in Taiwan in late October as I write this, was drawn to an academic paper released in February on the Research Square website, which is a pre-print platform that aims to make "research communication faster, fairer, and more useful". The paper by academics from University of California Berkeley alleges that on average clean cookstoves projects have been over-credited 6.3 times.

At present, this paper has yet to be officially published in an academic journal. It has been confirmed to Quantum that one journal has decided not to publish the paper, while another has asked for revisions and a resubmission after a peer review. I'm not an academic and I assume this is a familiar process for academics wishing to get research published.

However, this research has been available to anyone since February, and still is in the name of "faster, fairer, and more useful" communication. It has been viewed more than 3,400 times and downloaded over 350 times, according to Research Square. In the same period, the price of V2020 Gold Standard (GS)-certified African clean cookstove credits has dropped by almost 46%.

Critics in the Global South

Several experts from the Global South openly criticised the paper in a letter published at the start of last month. They said it has unsubstantiated assumptions, incomplete and selective review of existing academic literature, an unrepresentative sample of cookstove projects, and conflict of interest. Perhaps the revised version of the paper will address these concerns. Only an updated version will tell us, as one clear thing about the peer review process is that it lacks transparency, which I guess brings us full circle to why Research Gate exists.

Academic assessment is integral to a functioning carbon market that has the integrity to deliver real emissions reductions and positive change to communities. Reform is clearly needed and I think all in the carbon market accept this, but maybe some of the processes on the outside that carry out assessments and shape peoples' opinions are themselves also in need of oversight and reform.