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Sweden scales up CO2 credit buying to fund cleaner cooking in Africa

Source: Reuters - Wed, 9 Apr 2014 09:57 GMT
Author: Ben Garside
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A woman fries beancakes on a street before the break of fast on the second day of the holy month of Ramadan in Nigeria's northern city of Kano, July 21, 2012. REUTERS/Akintunde Akinleye
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LONDON, April 9 (Reuters) - Sweden has agreed to buy at least 4 million U.N.-backed carbon credits at above market rates from projects that will distribute more than half a million household cookers across African nations, the government said on Wednesday.

The deals are the latest in a series of purchases by Sweden to keep alive the ailing Clean Development Mechanism (CDM), foster sustainable development and improve public health in poorer nations and help meet the country’s greenhouse-gas targets more cheaply than by cutting emissions at home.

The government will fund schemes in Cameroon, Ethiopia, Ivory Coast, Malawi, Nigeria, Togo and Zambia, adding to previously announced deals to buy 500,000 Certified Emission Reduction (CER) credits each from schemes in Uganda and Ghana.

Users will be able to cut wood or charcoal fuel use by around half "by introducing simple low-cost cookstoves with vastly improved efficiency compared to traditional methods of cooking,” Christian Sommer, programme manager at the Swedish Energy Agency, said in a statement.

Sommer declined to say how much Sweden was paying per CER, adding that each contract was negotiated individually to ensure the schemes could be implemented.

The nine cookstove projects had been selected from 30 proposals it received last year and were separate from an ongoing Swedish tender to buy 10 million credits, Sommer said.

The CDM allows companies and governments to buy CERs generated in developing nations to help meet emission targets, and has helped channel almost $400 billion to project developers.

But investment has dried up as nations wrangle over a new pact to rein in global emissions of heat-trapping gases that could spur demand, pushing CER prices below 0.20 euro per tonne from over 20 euros five years ago.

Sweden is among a handful of European nations willing to pay up to 25 times the market rate for the credits to keep investment flowing and avert the collapse of a scheme that has saved rich countries and firms $3.6 billion.

Last year, it announced plans to purchase 21 million credits by the end of the decade to add to the 19 million it has bought since 2002.

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