Aid agencies plan CO2 offsets that also help poor

From fuel-efficient stoves for displaced Congolese families to drought-resistant cashew trees in Brazil, some aid agencies offering carbon offset schemes want to marry emissions savings with help for people living with climate change.

A London-based coalition is launching a new funding scheme to address concerns about existing trade in carbon credits - primarily that this excludes the world's poorest communities, which are most at risk from the impact of global warming.

"This is very much not a minor absolution for your carbon sins, but is honestly a compensation payment for the impact you know your personal carbon emissions will have," said Andrew Simms, policy director at the New Economics Foundation (NEF), coordinating the initiative with the International Institute for Environment and Development (IIED).

The consortium says its scheme differs from conventional carbon offsetting - which has focused mostly on promoting renewable energy - because it will also help vulnerable people cope with phenomena such as more severe droughts and floods.

Over the coming year, the approach will be tested in regions expected to be worst and soonest hit by climate change in Africa, Asia and Latin America.

Pilot projects will prioritise adaptation: For example, teaching Indian children to swim so they can survive floods, and planting the drought-resistant cashew trees whose fruit pulp families plan to sell to schools for income.

But they will also include mitigation steps such as providing solar-powered lighting for girls in Mauritania to do their homework after dark, and solar-powered freezers to store the Brazilian cashew apple pulp which makes juice.

The partners - including the UN Children's Fund (Unicef), Greenpeace, CARE International and Trocaire - describe the scheme as a way for charities, business and individuals to take responsibility for the damage caused by their carbon emissions in the short term.

Some existing projects backed with money from unregulated or so-called voluntary carbon emissions trading have been accused of not delivering promised environmental and social benefits. Critics also say carbon credits offer polluters a guilt-free way to carry on emitting damaging greenhouse gases.

The United Nations has called for around €60 billion in new financing by 2015 to help the world's poor cope with climate change. But so far, funds from governments and a levy on UN-regulated carbon trading amount to a fraction of what aid agencies say is needed. Charities have found it difficult to access buyers in the voluntary market, partly because offset companies, which act as brokers, prefer large projects that deliver high volumes of emissions savings.

"The transaction costs are quite high for small projects," said Andrew Scott, policy director at Practical Action, which is planning to raise around €541,000 over five years by selling carbon credits from four energy projects in Sudan, Peru, Sri Lanka and Bangladesh.