By Pilar Pedrinelli, Innovative Financing Officer, UNHCR, the UN Refugee Agency
Following tighter CORSIA eligibility criteria and recent market failures, scrutiny around cookstove credits is intensifying. Much of that scrutiny is necessary. But there is a risk that the market draws the wrong conclusion. The problem is not clean cooking as a project type. It is that project design assumes adoption and scale, rather than building for it.
That distinction matters, particularly in displacement settings – areas where refugees, asylum seekers and other forcibly displaced people live – where cooking fuel remains one of the primary drivers of deforestation and where few other climate measures can be deployed affordably and rapidly across entire settlements.
In and around refugee settlements, an estimated 20-25 million trees are cut down each year, largely for cooking fuel. In these contexts, clean cooking is not simply a household energy intervention. It is part of the environmental infrastructure needed to reduce pressure on forests, improve daily living conditions, and protect already fragile ecosystems. Without viable alternatives, families will continue relying on firewood, fuelling the risk of deforestation.
Timing matters. Early-stage investment into carbon markets reached an all-time high last year, with $22 billion flowing into the sector as buyers sought to lock in carbon credit supply, quality, and pricing. Investors are looking for scalable, high-integrity climate projects. However, the real question is whether projects are being designed around how communities actually live. This is what determines lasting, measurable climate outcomes.
The bigger challenge is that too many carbon projects are still designed around technical assumptions or short-term funding priorities, rather than in partnership with the communities that would host them. Projects built on this logic are inherently exposed to long-term delivery risk. If projects do not reflect how people live, engagement weakens – and with it, the credibility of their carbon credits.
Research published by the International Institute for Environment and Development (IIED) last year found that fewer than a third of climate finance projects explicitly mention local communities in their design. That disconnect is significant. Local communities are not secondary beneficiaries: they are the people who ultimately decide whether projects succeed or fail.
Walk through many refugee settlements and the consequences of the gap between design and reality is immediately visible. Signs mark the presence of donor-funded pilots and short-term interventions – many no longer operational. This is the physical footprint of fragmented finance: short cycles, high visibility, and limited lifespan.
During a recent visit to one of Uganda’s oldest refugee settlements, I saw this dynamic first-hand. An initiative designed to provide clean energy access had partially evolved into a mobile phone charging service because the available energy systems were too limited to meet household needs at scale. Families continued to rely on firewood for cooking, while deforestation in surrounding areas intensified.
This is not a marginal implementation issue. It goes to the heart of carbon market integrity.
In displacement settings, communities are not peripheral stakeholders or social ‘co-benefits’. They are part of the delivery infrastructure that determines whether emissions reductions are real. Affordability, usability, maintenance, local supply chains, trusted delivery structures, and benefit sharing are not secondary design features. They are a foundation for credible climate outcomes.
This is the approach behind newer financing models like UNHCR’s Refugee Environmental Protection (REP) Fund, the world’s first large-scale carbon finance facility designed for refugee and host communities. The Fund supports large-scale clean cooking and ecosystem restoration through community-led implementation, local partnerships, and long-term benefit-sharing structures designed to support durable usage.
In its initial phase, the initiative aims to reach more than 50,000 households with cleaner cooking solutions and restore around 7,000 hectares of degraded land, with verified voluntary carbon credits expected to be issued from 2027.
The model reflects a broader shift the market needs to make: recognising that community design is not a social add-on to carbon quality. It is an essential condition that makes quality carbon credits possible.
This matters because displacement-affected regions remain among the least financed areas globally for climate action, despite sitting on the frontlines for both climate vulnerability and environmental degradation. UNHCR research shows these areas receive just $2 per person per year  for climate adaptation, compared to $161 per person in non-fragile areas.
At the same time, clean cooking remains one of the few interventions capable of being deployed across entire settlements to simultaneously reduce pressure on forests, lower household fuel demand, and support broader nature restoration efforts. When paired up with reforestation and ecosystem management, these projects can help rein in one of the main drivers of deforestation while rebuilding degraded landscapes.
Stronger scrutiny and accountability are both necessary and welcome in carbon markets. But the sector should be careful not to signal that cookstove projects are fundamentally non-credible.
The real distinction is not between cookstoves and other project types. It is between projects designed around real-world adoption and those built primarily around theoretical delivery models.
Carbon markets are not validated through methodology documents or project plans. They are validated in homes, in forests, and in whether the solutions behind the credits continue to be used long after the original funding cycle has ended.
Pilar Pedrinelli is Innovative Financing Officer at UNHCR, the UN Refugee Agency.
Any opinions expressed in this commentary reflect the views of the authors and not of Carbon Pulse.
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