Winding down of the Credible Carbon relationship with the Kuyasa Project
Author: Anton Cartwright
The end of an era
“It is a house now, you can see, it is a house”….the words of Kuyasa resident after a ceilings had been installed.
Good things come to an end, and even good carbon market projects should have finite lifetimes. Credible Carbon is winding down its support for the Kuyasa Project after an incredible 14 years. We will not be re-auditing the project or issuing new credits.
The day in 2002 that I heard about the Kuyasa Clean Development Mechanism project while sitting in SouthSouthNorth’s offices in Cape Town is seared in my memory. The idea – and it was just an idea back then – that a carbon offset could be used to make low-cost housing more dignified and functional, seemed endlessly enticing, slightly subversive and deeply progressive all at the same time. Detailed work by SouthSouthNorth’s Steve Thorne, Shirene Rosenberg, Lwandle Mqadi, Stef Raubenheimer and Lester Malgas calculated the carbon dioxide emission savings from household solar water heaters, compact fluorescent lightbulbs (CFLs – it was the early 2000s and LEDs were not a thing yet!) and insulated ceilings in one of the poorest wards of Khayelitsha in Cape Town, South Africa, and then sought to be compensated for the saving.
Unlike most carbon projects at the time, SouthSouthNorth then went about implementation. This included the Herculean task of getting the project registered, codifying the climate justice idea of “supressed demand” (carbon markets should not punish poor people for not being able to afford the basic energy they need), issuing credits through the UNFCCC’s Clean Development Mechanism and becoming the world’s first Gold Standard CDM project and the first CDM project in Africa.
The initial SWHs and ceiling were fitted between 2007 and 2010 by a local team of artisans. The intention was for carbon financer to sustain the rollout by the CDM Gold Standard process proved to be expensive to sustain, creating the need for Credible Carbon’s processes
Learning by doing
Between 2008 and 2010 2 309 houses (none bigger than 30m2) were retrofitted by Carl Wesselink working with over 100 local artisans. It was fairytale stuff, supported by the City of Cape Town. Pioneering is never easy, however, and the early days of the carbon and renewable energy markets were particularly tough on ‘first movers’. The Kuyasa project generated lessons that we now take for granted: some of the early SWHs imported were low quality and difficult to maintain; the constant evolution of low-income human settlements and the associated explosion of backyard dwellers required ongoing recalculation of carbon savings; new ceiling installations were required to plug insulation leaks; the ongoing costs of registering and verifying carbon projects under both CDM and the Gold Standard was prohibitive for smaller projects. Despite benefitting households and saving over 6 000 tons of carbon savings a year in the initial years, Kuyasa was too small to justify the transaction costs of a CDM or Gold Standard project.
There were more subtle learnings for South Africa’s early adopters regarding who stood to gain from carbon market transactions. For carbon projects involving poor communities, the task of complying with the shifting and at-times-crass demands of carbon market ‘integrity’ as defined by institutions in the Global North, saw protracted process and large sums being paid to verifying and registering companies.
In this sense everyone involved in carbon projects in South Africa (and beyond) is indebted to the Kuyasa CDM. I lost count (after 18) of how many Masters and PhD theses used Kuyasa as a reference, and data from the project enabled a detailed reference in South Africa’s Just Urban Transition document for the Presidential Climate Commission.
Credible Carbon is particularly indebted to the Kuyasa Project because it defined the market failure that we set out to address – access for small, highly developmental projects that can’t afford the upfront transaction costs of global standards or the fees of verifiers. It was our great privilege to be asked to take the project on by the City of Cape Town and SouthSouthNorth as they began to understand, and pull back from, from the costs and demands of retaining CDM and Gold Standard status.
Locally manufactured SWHs account for a third of all installations and were the most robust and the easiest to maintain at Kuyasa.
An impactful track-record
The Credible Carbon registry shows that Kuyasa has sold 34 448 tons of carbon at an average price of just under R79.92 per ton (when the project first registered with Credible Carbon, prices had collapsed to R30 per ton). The project has 2 220 tons of issued carbon left from a 2017 vintage which remain in the market. Since 2014, the project has completed two audits and issuances and received R2,75 million from its Credible Carbon trades. 2024 was the project’s best year at R609 869. Carbon money could have been used to repay the initial investors but instead was spent to support the local team, undertake critical maintenance of the technology and ceilings and establish food gardens during Covid lockdown. Despite this, the carbon market revenue was not enough to expand the project or retain a full-time team. In recent years contracted staff spent a lot of time taking ageing SWHs off roofs. This was a necessary safety precaution, but reduced the carbon savings and ran counter to the expectations of people purchasing carbon credits. Whilst the historical carbon saved by the project has been calculated and repeatedly verified, it is always better when carbon revenue is used to expand access to renewable energy. The carbon revenue at Kuyasa was insufficient to sustain this expansion at the project.
As part of the wind-down Alice Gwynne-Evans conducted a study that found while carbon savings had declined as SWH’s had been taken off roofs, Credible Carbon’s estimates for the issuing periods remained below the actual carbon savings from the SWHs that remained.
Food gardens started during Covid lockdowns with carbon money continue to provide produce
Reflections on our partnership
In many ways Credible Carbon grew up with Kuyasa, and identifying the right moment to conclude the partnership has not been easy. Kuyasa’s carbon project has been a typically South African intervention: experimental, brave, innovative, precedent setting and driven by social justice while all the while ensuring conservative quantification of carbon reductions and social impacts. The project can claim documented reductions in respiratory illness (thanks to the ceilings), heightened energy security, reduced paraffin use, fire risk and indoor air pollution, and enhanced food security. On top of this, the project has delivered unbelievable learning that will continue to serve South Africa’s carbon markets under the country’s Article 6 framework. Most importantly of all, the Kuyasa carbon project delivered agency and dignity.
Had Kuyasa been launched 15 years later I have no doubt it would have achieved financial security, but then it would not have delivered the social impact it did, at the time that it did. I plan to continue visiting Zuko Ndamane and the community at Kuyasa who in many ways have been my teachers. I will remain grateful for the partnership we have enjoyed. I also look forward to a more mature South African carbon market, in which carbon taxes and associated offsets are valued more highly, so the Kuyasa project and projects like it across the country can benefit from carbon market revenue and the installation of renewable, safe and affordable energy. For now, thank you, it has been Credible Carbon’s immense privilege to be part of the Kuyasa story.