Photo: Josh Estey

About Carbon Finance

Carbon finance is a payment system to reward climate change mitigation. It pays for the reduction of carbon dioxide (CO2) emissions and other greenhouse gases (GHG) through the use of clean technologies in production, transport, trade and consumption. Those who pay are polluting countries and industries, as well as any companies or individuals wanting to compensate for their GHG emissions caused mainly by transportation and fossil fuel based energy use. These emission reductions are priced and traded as a commodity called carbon credits. One carbon credit equals the right to emit one ton of CO2 equivalent.

Hivos focuses on pro-poor benefiting renewable energy projects, such as domestic biogas and clean cookstoves, and sustainable agricultural practices. We connect programmes to buyers willing to pay prices that include a contribution to pro-poor sustainable development. Hivos carbon programmes promote co-benefits regarding biodiversity, livelihood, health impacts and employment. All our carbon credits are registered under the Gold Standard. Income from carbon credit sales is used for biodigester purchase subsidies, as well as programme activities, such as aftersales services, quality management, staff capacity building and end-user training.

Domestic biogas provides a sustainable way for individual households with livestock to reduce dependence on firewood and expensive fossil fuels: a biogas digester converts dung into biogas that can be used for cooking and lightning. Hivos has registered biogas carbon finance projects in Indonesia, Nicaragua, Cambodia, Kenya, Tanzania and Uganda. Hivos is working together with the Gold Standard to develop a framework and methodologies for sustainable agriculture. With partners we are implementing pilot projects in Indonesia, Nicaragua and Kenya to verify emission reductions and carbon sequestration by organic and low external input agriculture.

This programme is an excellent example of the latest vision on international cooperation, as it combines
investment, trade and to a smaller extent grants, enabling improved standard of living.

L. Ploumen, Dutch Minister for Foreign Trade and Development Cooperation