COP29, Article 6 and Cooking Transitions - The Year Ahead

By Dr Samir Thapa

This blog aims to highlight the progress achieved related to the operationalisation of Article 6 (A6) of the 2015 Paris Agreement (PA) at COP29. While some excellent reporting on its achievements is in place, this blog takes a step further to analyse these in relation to the cooking sector methodologies¹ and financing in 2025. The blog highlights the work required on some important parameters and concepts given the need for integrity, and the ambitions and aspirations related to PA. While this is expected to be complex, it offers an opportunity to develop accurate, robust and holistic methodologies, for which existing and ongoing innovations and techniques could be useful. The blog however distils better if the reader is familiar with the relevant previous and ongoing works, particularly that of Article 6.4 PA crediting mechanism.

COP29 was seen as a finance COP but was unable to agree on the aspirational financing commitment of 1.3 trillion, and only a 300 billion per year was agreed. However, the New Collective Quantified Goal (NCQG) on Climate Finance set in motion a “Baku to Belem Roadmap to 1.3T”² with aims to close the gap to $1.3 trillion by 2035. This NCQG is to be mobilised from a wide variety of resources, both public and private, bilateral and multilateral, including alternative finance sources, recognising climate related outflows from and finance mobilised by the MDBs as well as the South-South voluntary contributions. While financing through the carbon market is not specifically mentioned, a similar amount to the current pledge (circa USD 250 billion per year) is expected to be mobilised under A6 transactions towards the cost of implementing the national NDCs. 

Agreement on A6 was one of the top COP29 priorities to be sorted out, not only as one of the last outstanding items of the PA, but also as a key tool for 1.5°C ambition. The technical and political negotiations during UNFCCC intersessional and the A6.4 Supervisory Body (SB) meetings were crucial in ironing out the major issues holding back this agreement and adoption of the full implementation of CMA3 Decision 2 (A6.2Guidance) and Decision 3 (A6.4RMPs). COP29 agreed in principle the A6.4 operationalisation on the first day with a breakthrough on the remaining issues (A6.2 and A6.4) around authorisation³, interoperability of registries, standards for mechanism methodologies and activities on removals, and the mandatory SD tools.

The A6.4 agreement now allows participants to prepare for its activities, for which the available activity cycle standards and procedures, especially the pre-registration requirements (e.g. prior consideration), and the mandatory SD Tools can be used. Such developments can also benefit from additional tools e.g. the A6 Toolbox prepared by the Supporting Preparedness for Article 6 Cooperation (SPAR6C) project. More definitive understanding around A6 and carbon market related subjects can be found as part of the knowledge base of the  WB led Climate Warehouse project. Similarly, information on the pipeline of A6.2 and the potential CDM projects eligible for A6.4 transitions are maintained by the Copenhagen Climate Centre. However, a major requirement for project development is the PA aligned A6.4 sectoral methodologies, which could also be used by the A6.2 cooperative approaches, and the independent standards. This is important because participating parties and host countries, whilst being required to establish national infrastructures for the authorisations including the transfer of ITMOs and A6.4ERs – clearly lack the capacity to develop the required methodologies.

Planning related to A6.4 plan includes revisions of the CDM methodologies AMS II.G and AMS I.E as well as the development of new baselines, methodologies and related tools⁴. These new methodologies must adhere to new procedures, most importantly to new principles, elaborated in the approved standard on development and assessment of methodologies. Methodologies are expected to propose appropriate downward adjustment provisions to achieve crediting baselines below Business and Usual (BAU) scenarios to align with the host party NDCs and LT-LEDS, but importantly it also encourages ambitions to ensure the PA long-term temperature goal. For this, timely submissions of the Biennial Transparency Reports going forward and revisions to NDC 3.0 (and LT-LEDS) in 2025 with sectoral cooking targets are crucial in supporting the estimation of these downward adjustments. The provisions for setting the crediting baseline would also need to consider possible suppressed demand scenarios⁵, especially with counterfactuals that are higher than the BAU scenarios, for example using traditional firewood-based stoves. This is because such stoves do not realistically provide the required level of energy for cooking which the project level modern cooking solutions are expected to provide, often at reduced costs.

Further, since many cooking activities save forest biomass stock which either balances, and most likely also contributes to enhancing the carbon, eco-system and biodiversity, methodologies may address the possible additional longer-term increases in the removals including the associated reversal risks as per the standard for activities involving removals. Such consideration should perhaps be part of the provisions while estimating the fraction of non-renewable biomass (fNRB) parameter being considered, among others based on the marginality for the biomass saved particular to the cooking activities. This then could be an improvement to the earlier practice of using average aggregated fNRB values, but which is found to be the largest source of over crediting relative to the other parameters.

Another principal requirement is to consider contributions to the equitable sharing of mitigation benefits among the participating Parties. This is important because of its linkages to the potential financing structure of the clean cooking activities. In this, mechanism methodologies must include provisions that ensure benefits sharing tangibly supports host Parties’ SD, primarily with the SD Tool. This requires estimating the mitigation benefits – for example, in terms of time saved and improved health benefits. Here, ongoing experiences suggest that clean cooking can result in several direct and indirect benefits, both private and public leading to enhanced welfare. However, a major issue, particularly with cooking transition projects is in sharing the revenues, especially with end-users – because revenues are tied to continued cookstove usage and linked to safeguards against unfair and impractical distribution of benefits. Several host Parties have already approved sharing requirements as part of their carbon financing regulations, which the participating Parties can apply and/or adapt to share the revenues.

For sectors like clean cooking, with previous experiences of carbon financing, and improved focus in country level strategies including the NDCs and emerging low-cost technologies, traditional climate/development finance perhaps can be replaced with carbon and co-benefit financing linked to cookstove usage and impacts. Such financing together with the sharing of revenues can be linked to demonstrating financial additionality, but importantly, incorporating fair trade and distributive tenets, mostly lacking in earlier projects.  It is however important to consider new sustainable mechanisms and vehicles to efficiently share the financing, particularly those that leverages access to mainstream debt and equity e.g. through micro-credits and PAYG (or other fee for service) models as per the context and country-level infrastructures. Such consideration aligns with the NCQG requirements of:

• 1) Creating fiscal spaces (e.g. subsidies with carbon revenues)
• 2) Effectively addressing systemic inequities and barriers (e.g. reducing capital costs) and thus,
• 3) Promoting inclusion and access to low-income/vulnerable groups (e.g. targeted interest rate subsidies).

Such revenue sharing can then influence both the public and private (e.g. A6.2 bilateral or A6.4 ERs) approaches, also through major facilities e.g. Climate Action Catalyst Fund and Carbon Transaction Facility (CTF)⁶, both with respect to their support for market readiness, and importantly prices, including the Corresponding Adjustment (CA) costs⁷ required to achieve ambitious and transparent NDCs.

Going forward, the inclusion of these requirements in new methodologies, although complex in technical and operational terms, is expected to enhance broad sectoral and geographic coverage, and participation, ownership and inclusivity across stakeholders. Complexity is expected with respect to, among others, 1) the level of downward adjustment vis a vis the host Party NDCs and their ambitions, and if required (e.g. Bhutan) 2) the benchmark values for suppressed demand in energy units under different scenarios of non-linear income and energy cost effect, 3) the renewed approaches to fNRB estimations given the new understanding of woodfuel consumption on deforestation, and 3) their increasing linkages to use of life-cycle assessment approaches to account for leakage and material emissions embodied in parts, products and services used and/or provided by the activity considering all possible scenarios (e.g. below ground biomass). It is also expected that benefit and revenue sharing arrangements which haven’t been included earlier and attract normative references to concepts of human rights, could result in contested discussions. These provisions therefore call for new methodologies to consider relevant contexts and developments already introduced e.g. MMECD, VM0050, CLEAR⁸.

The quest for new holistic methodologies is expected to result in innovations in the scientific rigour and understanding towards accuracy including fairness and transparency in credit development and distribution. Conservative approaches will nonetheless continue due to uncertainties in processes and estimations mainly to avoid over-crediting and locking in emission levels (e.g. with LPG and its transportation), technologies and/or carbon-intensive practices. The solutions and provisions to these complexities need to be simple, clear and inclusive to be applicable across participants and Parties irrespective of their circumstances, to result in real and credible reductions and removals.

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Endnotes:

¹Methodologies here refers to associated standards, procedures, tools and notes as well e.g. leakage standards, fNRB Tool, Concept Note – Sharing of mitigation benefits.

²The roadmap offers a year-long escape clause for the COP 29 and 30 presidencies to produce a report by 2025– which should include solutions to bridge the finance gap.

³The World Bank guaranteed Multilateral Investment Guarantee Agency, released a Letter of Authorisation template, to enable standardisation across authorised ITMOs under A6.2, which could be used for issued A6.4ERs as well.

⁴The required forms released on 18/12/2024 for the development of new baseline, monitoring methodology and their tools including their assessments.

⁵Suppressed demand is the unmet minimum level of cooking energy/service – which can be recognised by including standardised baselines (benchmarks and default factors). The estimation of the rebound, income and energy cost effect can indicate the minimum level of energy services. Stacking can be interpreted as a way of meeting the suppressed demand with various technology/fuel combinations.

⁶A6.2 saw further progress with several new MoUs and bilateral agreements. Singapore signed a MoU with Zambia and an implementation agreement with Peru. Sweden signed implementation agreements with Zambia and Nepal. Norway announced the Norwegian A6 Climate Action (NACA) Fund, pledging up to USD 100 million via the CTF. 

⁷The Global Change Analysis Model suggests that many or most host countries would need to charge CA fees well above US$25/ tCO₂e in addition to the cost/quality of the ITMOs. Each country can derive its own CA costs through modelling, and the more ambitious the host country’s NDC, the higher the cost.

⁸This could include use of 1) specific energy consumption ratios (based on Controlled Cooking Tests) to account for additional characteristics that affect cooking energy consumption, e.g. pressure with the EPCs and cooking behaviours in induction stoves, which are unaccounted using the thermal efficiency or useful energy e.g. through Water Boiling Tests. 2) Innovative backward calculation technique to estimate baseline emissions and sidestep stacking and suppressed demand. 3) renewed KPT protocols that also perhaps integrate CCT to measure fuel consumptions and specific energy consumptions – to understand context specific stacking, suppressed demand scenarios and emission factors as well, and 4) location specific baseline fuels and their emission factors instead of projected fossil fuel emission factors given misplaced interpretation of ‘energy ladder’ theory.