Request for Proposals: Responsible Carbon Finance Landscape Research
The Clean Cooking Alliance (CCA) works with a global network of partners to build an inclusive industry that makes clean cooking accessible to the three billion people who live each day without it. Established in 2010, CCA is driving consumer demand, mobilizing investment to build a pipeline of scalable businesses, and fostering an enabling environment that allows the sector to thrive. Clean cooking transforms lives by improving health, protecting the climate and environment, empowering women, and helping consumers save time and money. In alignment with the Sustainable Development Goals, CCA is working to achieve universal access to clean cooking by 2030.
CCA seeks to make high-impact clean cooking solutions desirable, affordable, and accessible for consumers and viable for businesses to provide sustainably at scale. It supports companies that design, manufacture, distribute, and retail electric, biomass, ethanol, biogas, and LPG-based clean cooking solutions in addition to more efficient wood and charcoal cookstoves. It also supports technology innovation with the aim to commercialize new technologies such as highly energy-efficient electric cookers for off-grid/mini-grid communities.
CCA’s Clean Cooking Systems Strategy highlighted that at least US$10 billion per year is required to achieve universal access to clean cooking, yet the current level of funding lags far behind at about $130 million annually. In response, CCA has established the Catalytic Finance Accelerator. Its mission is to catalyze significant growth in funding and investment in the sector within three years. It will do so by addressing challenges that lie in the way of high-growth catalytic capital (most notably carbon finance and public funded results-based finance); by leveraging these pools of funding to catalyze larger pools of traditional capital (e.g., guarantees, debt, equity, early-stage equity); and by laying the groundwork to unlock future pools of capital (e.g., social value finance at scale).
The Catalytic Finance Accelerator is organized according to its role in the financing ecosystem:
- Instilling smarter policies, standards, and principles that govern the conduct of actors in clean cooking markets and their adjacent sectors, bridging information gaps and providing certainty and confidence to investors, outcome buyers, and funders.
- Building improved market information, tools, and infrastructure to improve decision-making, reduce transaction costs and increase productivity for investors, outcome buyers, and funders.
- Improving capacity of clean cooking solutions providers to meet the expectations of investors, outcome buyers, and funders for reliability, predictability, and scalability, and impact.
- Attracting and enabling new pools of capital from adjacent sector investors, traditional official development assistance providers and philanthropic funders.
The role of the Catalytic Finance Accelerator in CCA is to position the Clean Cooking Alliance as an influential voice and market facilitator for innovative finance in clean cooking markets.
Clean Cooking Alliance and Carbon Markets
Carbon markets can be game-changer for clean cooking given a 21-fold increase in the volume of carbon finance over the last four years when compared with an annual growth of around 5 percent for commercial capital and negative growth in traditional public funding. Carbon finance is enabling companies to lower cost curves to the consumer, aligning prices of clean cooking solutions to the purchasing power of consumers. These are driving growth in sales, enabling companies can reach scale economies and viability faster. The impact on carbon finance on the top and bottom lines of companies can make clean cooking companies more attractive for traditional banks and investors. Besides its direct role in driving growth in sales (and thus access to clean cooking) and its catalytic role in crowding in other forms of finance, it can also drive improvements above companies and in the sector as a whole. Demands of buyers in carbon markets for high quality carbon credits can incentivize investments in improving the quality of cooking solutions, as well as in the testing and verification regimes to assure confidence among buyers. Similarly, the linking of long-term carbon revenue with sustained use of improved cooking solutions can incentivize companies to invest in constantly improving the value proposition of cooking solutions to the users and in improving policies and services around customer satisfaction and care. Carbon finance can potentially do for clean cooking access what digital money did for financial inclusion, namely disrupting markets, crowding in investors, and transforming markets from single-digit to exponential growth.
Despite the many opportunities of carbon markets potentially offer clean cooking market, it is not altogether certain that these opportunities will necessarily materialize if left on auto-pilot. Lessons from other early-stage markets suggest a need to take a proactive approach to manage risks inherent in fledging, fragmented and thin markets such as the interlinked markets for carbon and clean cooking.
CCA has identified four key risk-areas that need to be managed if opportunities in carbon markets are to be realized. These have been identified based on CCA’s collaboration with standard bodies and registries in both CDM and voluntary markets, it’s selective support to clean cooking companies through project registration and the carbon learning community initiative, and its engagement with key stakeholders through the Catalytic Finance Accelerator and the Clean Cooking Forum. They risk-areas include:
- Integrity and coherence to build market confidence through more transparent and coherent policies, standards and methodologies, especially in narrowing methodological differences across standard bodies in estimating carbon-offset volumes, emissions reductions and co-benefits across different stove/fuel technologies;
- Fairness to enable transparent and equitable distribution of the proceeds of carbon revenue along the carbon value chain;
- Additionality and complementarity to enable carbon finance to complement and catalyze other efforts and forms of finance or at least ‘do no harm’ to these, including optimizing public subsidies that enable the sustainable development of clean cooking markets;
- Level playing field to enable many clean cooking companies to access carbon markets by lowering the costs of market entry and of doing business, which include better integration with the digital economy and improved access to finance for project development, capital investment, and operating expense.
Objectives of the Landscape Research
The landscape research will seek to:
- Develop a framework and methodology to assess risks perceived by carbon and clean cooking market actors, which can be used to generate an annual ‘temperature’ check on state of the carbon market in expanding clean cooking access.
- Test/use the framework and methodology to validate and refine CCA’s assumptions about key risk-areas, including key contributors to risk within these areas.
- Identify assess, and clarify the key issues driving the risk-areas and potential impact, disaggregating the spread of the risk across different levels (e.g. at the level of users of clean cooking solutions, institutional buyers and sellers in clean cooking and carbon value chains, the across the system as a whole).
- Map the actors in the ecosystem around the risk-areas, identifying their active and passive roles they play in the risk management process (e.g. creating, amplifying, influencing, exploiting, absorbing, resolving, and regulating), and the incentives that drive their behaviour.
- Generate a targeted, actionable recommendations that can lead to solutions within short (6-12 months), medium (within 36-months), and longer time horizons (within 60 months) covering a range of areas including supporting development of policies and standards, market infrastructure, research and market information, business and financial models.
In pursuit of these objectives, four key themes of research questions underpin this assessment:
- Integrity and coherence: a major set of concerns centre around methodological differences between registries and standard setting bodies, leading to seemingly different outcomes (e.g. projects with same/similar characteristics receive certification under one regime and not under another, generate more carbon credits are one and less in another etc). These can sometimes create confusion among buyers about the quality of credits emerging from clean cooking markets.
- How do major standard bodies differ in their standards and methodologies? This includes but not be restricted to:
- Emissions reduction differences of different stove/fuel technologies;
- Differences in use of inputs (ie e. baseline values, fNRB, usage, intervention efficiency) within a single methodology
- Co-benefits associated with transition and how that varies across stove/fuel technologies;
- Differences in the definition and use of additionality;
- Methodological differences in MRVs;
- Obligations on replacement of decaying technology.
- What are the risks and likely impacts associated with these differences? How do these influence perceptions of credit ‘quality’ and consequently confidence in the market? Are there initiatives to resolve these risks (e.g. ICVCM), and what remain unresolved?
- How do major standard bodies differ in their standards and methodologies? This includes but not be restricted to:
- Fairness: a set of concerns centre around how proceeds of carbon credits are equitably shared across the carbon value chain. There is currently limited visibility in the pricing and process of transferring rights of carbon offsets across the clean cooking and carbon market value chains. This is particularly the case vis-à-vis customers who have limited information and understanding of how the system functions, and their ability to negotiate terms. Perceptions of credit quality and potential unfairness in the sharing of proceeds from the sale of carbon offsets can potentially drive carbon offset buyers out of the market, particularly when many are motivated by Environmental, Social, and Governance (ESG) objectives. Moreover, limited carbon revenue- sharing with customers can potentially decreases incentives for sustained use and limits the credibility of the credit.
- How are the revenues of carbon credits applied along the value chain of players involved in cookstove projects (e.g., implementing partners, manufacturers, last mile distributors, retailers, project developers, households, etc.)? Are there discernible archetypes?
- What are the models promoted by existing frameworks (e.g., FairTrade Climate Standard) to increase the inclusivity and fairness on carbon revenues and is it compatible with financial models applied currently by project developers?
- What is the impact of market prices changes on revenues generated by projects and how are the revenues shared among project participants (e.g., financial sponsor vs implementing partners vs stove manufacturer vs households?
- Are there emerging good practices when it comes to carbon revenue sharing, why have these been adopted and at what scale, and what are the early outcomes? How can current good/best practices be used to develop principles/policies to guide carbon revenue sharing across different fuel/tool technologies or market contexts?
- Additionality and complementarity: a set of concerns center around the question of how carbon revenue is used. In particular, there are debates around carbon-revenue based subsidies and their potential distortionary effect on the overall clean cooking market (e.g. pricing out companies operating on market-based principles or those selling potentially higher performing cooking solutions, or disincentivizing clean cooking companies from maintaining a link with customers to help them progressively move up to higher tiers of cooking solutions). There are similar concern among public funders that carbon revenue can result in inefficient use of public funding when clean cooking companies “double dip”, claiming revenue for the same product from both carbon buyers and RBF providers.
- What is the range of financial models currently applied for cookstove carbon projects (e.g., fully subsidized stoves, partially subsidized stoves, micro-finance, expansion of marketing channel and market building) and how does the use of subsidies vary over projects lifespan?
- What are the potential risks and trade-offs of the various carbon market financial models on clean cooking markets (e.g. potential market distortion of fully subsidized fuel/stove technologies vs pace and scale of access to solutions by end-consumer) based on the evidence of similar such models in other markets? Are there any emerging evidence or insights in other markets from which to draw plausible inferences? Is there anything distinctive about clean cooking markets that make evidence and lessons from other markets less relevant?
- What are the risks that cookstoves benefits from carbon finance program while they would have been distributed and sold anyway (e.g., issue around portion of stoves sold in the baseline situation but counted in cookstoves project activities benefiting from carbon finance) How do major certification standards define and apply additionality and what are the various models and argument cookstove projects use to demonstrate additionality? Does the type of technology promoted have an impact on additionality and carbon business models applied?
- What are the potential risks, trade-offs, and complementarities between the financial models of various carbon market projects and publicly funded results-based finance projects? How to best combine, coordinate and/or align the various tools in a smarter way so it does not create rent capture and distortion?
- Levelling the playing field and inclusiveness: a final set of concerns focus around the potential exclusionary effects of carbon markets, favoring incumbent market leaders who are able to entrench their market position and power, potentially choking off market competition and innovation, reducing bargaining power of both end-consumers of cooking solutions as well as buyers of carbon credits, and ultimately affecting sustainability of market growth and clean cooking access.
- What are the major demand, supply, and regulatory requirements of clean cooking companies to enter and operate in carbon markets, and of carbon market players for entering into particular countries and in clean cooking sector? How do these requirements translate into costs, time, and effort?
- Do these requirements act to exclude certain categories of clean cooking market actors by design and by self-exclusion?
- What risks do exclusionary requirements mean for market development based on evidence and insights on key features of effective functioning markers at different stages of development?
- Are there potential areas of public good and technological and business model innovations that can significantly lower the cost of entering and operating in markets, making carbon markets more inclusive? (e.g. standardized baselines on emissions and unit economics of various fuel/tool technologies in different markets, adoption of digital MRV tools, access to project pre-finance etc.)
Scope of Work
CCA is seeking a qualified consulting firm/consortium to carry out the research and produce a report focused on developing a shared agenda for action for the sustainable development of carbon markets for clean cooking. The approach taken is through the lens of developing a shared approach to understanding and managing risks associated with carbon market expansion across various clean fuel/tool technology markets. The research will explore several evidence and knowledge gaps to answer the research questions identified above.
This research will draw on publicly available research, information, analysis of carbon market activity in clean cooking markets. It will also heavily draw on interviews with stakeholders from across carbon and clean cooking markets, including from within CCA.
CCA will also be organizing steering groups composed of key industry stakeholders, organized around the main themes of the research, namely integrity and coherence, fairness, additionality and complementarity, and levelling up and inclusiveness. This will offer additional substantive reference points for consultants to test hypothesis and assumption, and validate conclusions and recommendations.
- Deliverable 1: Inception report outlining the final research framework and methodology, research questions organized around the key themes of the research, quantitative data sources, and list of interviews, and work-plan.
- Deliverable 2: Interim risk assessment framework and methodology for annual/biannual temperature check on state of the carbon markets in clean cooking.
- Deliverable 3: Interim reports on findings in each thematic area presented to respective steering groups, and an annotated table of contents of an overall synthesis report of findings presented to CCA.
- Deliverable 4: Final draft reports, including 1 section providing a synthesis of key findings and recommendations, 4 thematic sections key findings and recommendations against the themes of the research,
- Deliverable 5: Final risk assessment framework and methodology for annual/biannual temperature check on state of the carbon markets in clean cooking. This deliverable will be accompanied by a concept note and budget to facilitate fundraising efforts.
All deliverables to be presented in PowerPoint and in Word, including one single A4 page of key messages and talking points for CCA leadership.
Project Period of Performance
This assignment will be performed between April 2023 – August 2023. All final deliverables must be submitted by August 31st, 2023.
Firms should have the following qualifications to complete this work:
- Deep knowledge and experience of climate finance, and carbon and clean cooking markets including Article 6.2 and 6.4, voluntary carbon markets, standards and methodologies, project development, and financial models.
- Deep knowledge and experience with use of institutional economics, political-economy, power, and ‘Making Markets for the Poor’ (M4P) analytical frameworks/tools and approaches to make sense of the incentives that drive benign or hazardous behaviors among market actors.
- Substantial experience in developing methodological tools to survey, assess and produce ‘state of the market’ situation reports.
- Demonstrated global impact of research performed including mentions in top tier publications, media outlets and social media platforms.
- Demonstrated high level network in carbon markets; similar networks in clean cooking markets will be an advance.
|03/09/2023||Proposal review and scoring|
|03/23/2023||Consultant(s) selected and notified via email|
|04/01/2023||Kickoff meeting with selected Consultant(s)|
A detailed budget in US Dollars must be submitted with the proposal. Budget should include both pre-tax and net of tax values. The budget should include direct costs (Personnel, Fringe Benefits, Travel, Sub-Agreements, Equipment, Supplies, etc.), as well as indirect costs (overhead). For indirect costs, please indicate a list of expenses covered by the indirect rate. For all direct cost, please include assumptions that were made to arrive at line item costs (e.g. 2 trips @ $1,500/trip = $3,000 or 20 staff hours @ $40/hour = $800).
If a bid has a mathematical discrepancy, CCA may correct the discrepancy and notify the Consultant of the adjustment. In such circumstances, the Consultant may choose to withdraw their bid.
The budget should not exceed USD 100,000.
The Clean Cooking Alliance will review all written proposals and may request a phone or in-person interview and/or updated submission to address questions or provide clarification. CCA will use the following criteria in its evaluation.
|Evaluation criteria||Weight||Score (1-5)|
|Approach: e.g the analytical framework and methodology answering the project’s key questions and deliverables||25%|
|Subject matter expertise: e.g Staff demonstrates qualifications in terms of years of experience, projects implemented, and publications in the sector of interest to the study.||25%|
|Project management: e.g achievable action plan that will deliver the project on time and on budget||25%|
|Capabilities and experience: e.g demonstrated firm experience with similar projects||25%|
Intent and Disclaimer
This RFP is made with the intent to identify a Consultant to deliver results as described in this RFP. UNF/the Clean Cooking Alliance will rely on the Consultant’s representations to be truthful and as described. The Clean Cooking Alliance assumes it can be confident in the Consultant’s ability to deliver the product(s) and/or service(s) proposed in response to this RFP.
If the Clean Cooking Alliance amends the RFP, copies of any such amendments will be sent to all respondents to the proposal.
Proposal Guidelines and Requirements
- This RFP is open to multiple partners and is a competitive process.
- Proposals received after 5 pm EST on March 5, 2023 will not be considered.
- The price provided should be in US dollars, and should contain both pre-tax and net of tax values. If the process excludes certain fees or charges, the applicant must provide a detailed list of excluded fees with a complete explanation of the nature of those fees.
- CCA prefers a single point of contact who manages deliverables. If the execution of work to be performed by the Consultant requires the hiring of sub-contractors, the Consultant must clearly state this in the proposal. Sub-contractors must be identified and the work they will perform must be defined. Subcontractors are subject to vetting and approval of UNF/CCA
- CCA will not refuse a proposal based upon the use of subcontractors; however, we retain the right to refuse the sub-contractors you have selected.
- Provisions of this RFP and the contents of the successful responses are considered available for inclusion in final contractual obligations.
Format for Proposals
Proposals must include applicant signature as well as a signed declaration form. Proposals must include the full legal name of applicant, as well as legal formation and ownership structure (e.g. incorporation certification, tax status and ID, etc.).
Contracting and Compliance
CCA will negotiate contract terms upon selection. A copy of the contract terms and conditions will be provided upon selection. All contracts are subject to review by the UN Foundation’s Business Services and Budget Reporting team. The project will start upon the complete execution of the contract. The contract will outline terms and conditions, scope, budget, and applicable flow down terms. Selected recipient(s) must comply with CCA, United Nations Foundation, and funder compliance requirements. The selected recipient(s) must also undergo detailed legal, financial, and commercial due diligence.
The Consultant understands that the Clean Cooking Alliance has chosen to solicit an RFP for consulting services, and that the Consultant’s response does not guarantee that the Clean Cooking Alliance will enter into a new contract with the Consultant or continue any current contract(s) with the Consultant.
The Consultant agrees that Clean Cooking Alliance may, at its sole discretion:
- Amend or cancel the RFP, in whole or in part, at any time
- Extend the deadline for submitting responses
- Determine whether a response does or does not substantially comply with the requirements of the RFP
- Waive any minor irregularity, informality or nonconformance with the provisions or procedures of the RFP
- Negotiate with all Consultants UNF deems acceptable
- Issue multiple awards
- Photocopy the responses for evaluation/review
This RFP is not an offer to contract. The Clean Cooking Alliance assumes no responsibility for Consultant’s cost to respond to this RFP. All responses become the property of the Clean Cooking Alliance.
The Consultant, by submitting a response to this RFP, waives all right to protest or seek any legal remedies whatsoever regarding any aspect of this RFP.
The Consultant represents that it has responded to the RFP with complete honesty and accuracy. If facts provided in the Consultant’s response change, the Consultant agrees to supplement its response in writing with any deletions, additions, or changes within ten (10) days of the changes. The Consultant will do this, as necessary, throughout the selection process.
The Consultant understands it may receive proprietary and confidential information from the Clean Cooking Alliance during the RFP process (“Confidential Information”). The Consultant and CCA agree to not use Confidential Information for any purpose other than the Consultant’s participation in the RFP process, and to not reveal Confidential Information directly or indirectly to any other person, entity, or organization without the prior written consent of the other party. The Consultant and CCA further agree to exercise all reasonable precautions to maintain the proprietary and confidential nature of Confidential Information where it can best demonstrate its value and capacity to delivery ecosystem-wide, meaningful value.
Grounds for Exclusion
Material misrepresentations, including omissions, may disqualify the Consultant from a contract award.
Submissions will be rejected in the Clean Cooking Alliance’s sole discretion if it finds that the Consultant has engaged in any illegal or corrupt practices in connection with the award.
The Consultant will be excluded from participation for the reasons below. By submitting a proposal in response to the RFP, the Consultant confirms that none of the below circumstances apply:
- The Consultant is bankrupt or being wound up, is having their affairs administered by the courts, has entered into an arrangement with creditors, has suspended business activities, is subject of proceedings concerning those matters, or is in any analogous situation arising from a similar procedure provided for in national legislation or regulations.
- The Consultant or persons having powers of representation, decision-making or control over them have been convicted of an offence concerning their professional conduct by a final judgment.
- The Consultant has been found guilty of grave professional misconduct; proven by any means which CCA can justify.
- The Consultant has not fulfilled obligations relating to the payment of social security contributions or taxes in accordance with the legal provisions of the country in which they are established, or within the United States of America, or those of the country where the contract is to be performed.
- The Consultant or persons having powers of representation, decision-making or control over them have been convicted for fraud, corruption, involvement in a criminal organization or money laundering by a final judgment.
- The Consultant makes use of child labor or forced labor and/or practice discrimination, and/or do not respect the right to freedom of association and the right to organize and engage in collective bargaining pursuant to the core conventions of the International Labour Organization (ILO).
Principal Point of Contact
Feisal Hussain is the primary point of contact for this assignment. Please reach out to email@example.com email address with any questions.
Please submit any questions and/or proposal materials related to the Request for Proposals to firstname.lastname@example.org with the subject line “Proposals for Outcome Seller Research.”
The deadline for submission is March 5, 2023 at 5 pm EST.