Many households in Pakistan’s underserved communities use minimal electricity, not out of frugality, but because the nearest grid connection lies miles away. Women cook over smoky woodfires, knowing the toll it takes on their health, but lacking alternatives such as the available of a LPG or connection to any gas supply network.  Of course, the carbon footprint of such communities may be negligible. Yet, these are not examples of low-carbon living—they are cases of suppressed demand.

Suppressed demand occurs when people’s needs for basic services, such as electricity, clean water, or safe cooking solutions, remain unmet due to barriers like poverty, infrastructure gaps, or systemic inequality. It is not a voluntary reduction but a consequence of limitations​​. Suppressed demand, if not addressed proactively, will translate into higher emissions down the road of development, as these communities transition to meet their latent needs, often through carbon-intensive solutions​​.

The concept of suppressed demand gained prominence under the Clean Development Mechanism (CDM) of the Kyoto Protocol. The CDM initially focused on reducing existing emissions, but its reliance on historical data overlooked regions with low emissions due to inadequate services. The result? Least Developed Countries (LDCs), including Pakistan, saw little participation in carbon markets​​. To bridge this gap, the CDM later incorporated suppressed demand into methodologies. This allows projects to claim credits not just for reducing emissions but for avoiding potential future emissions by addressing unmet needs sustainably. For instance, a project providing solar lamps to off-grid communities can claim carbon credits based on the emissions averted by displacing kerosene lamps, even if those kerosene lamps were not yet in widespread use​. Suppressed demand is now also acknowledged by the verification and validation bodies under the current voluntary carbon market.

Barriers to Meeting Suppressed Demand

Understanding what perpetuates suppressed demand requires a closer examination of the underlying factors. These barriers are often interconnected, creating a cycle of unmet needs and limited opportunities for improvement. Here are the key categories of barriers that drive suppressed demand:

    1. Infrastructure Barriers
      A lack of physical infrastructure prevents access to essential services. For instance, remote areas may lack electricity grids, forcing households to rely on biomass for energy​​.
    2. Economic Barriers
      Low-income communities prioritize immediate survival needs, such as food and health, over long-term investments in energy-efficient technologies or clean water​.
    3. High Costs of Technology
      The initial investment required for clean technologies, such as electric cookstoves or solar panels, is often prohibitive for low-income households​.
    4. Data and Capacity Gaps
      Inadequate data on energy usage and lack of technical expertise hinder effective project planning and implementation​.
    5. Systemic Inequalities
      Geographic and political marginalization mean that certain regions or communities are overlooked in national development planning, perpetuating cycles of poverty and unmet demand​.

Integrating Suppressed Demand into Carbon Credit Projects

Suppressed demand represents a unique opportunity for carbon markets to align development and climate goals. Traditional carbon credit methodologies calculate baselines using historical emissions. However, suppressed demand projects set baselines by estimating the emissions that would occur if communities gained equitable access to services​​.

For example, a clean cooking project in northern Pakistan could calculate emissions avoided by displacing traditional biomass stoves with efficient electric stoves. The methodology might involve parameters like:

  1. fNRB (Fraction of Non-Renewable Biomass): Estimating the proportion of biomass harvested unsustainably.
  2. Baseline Emissions: Projecting emissions from kerosene or biomass use under a business-as-usual scenario.
  3. Additionality: Demonstrating that the project enables access to services that would not exist otherwise​​.

Technical Challenges in Addressing Suppressed Demand

Implementing suppressed demand projects may involve overcoming several technical hurdles, such as

  • Baseline Setting
    Defining accurate baselines is complex, as it requires modeling future energy systems under different development scenarios. Tools like dynamic simulation models can help refine these estimates​​.
  • Monitoring and Verification
    Parameters like stove efficiency, fuel usage, and seasonal variations must be monitored over time. Advanced techniques like geospatial analysis or remote sensing can improve accuracy.
  • Incorporating Social Metrics
    Projects must balance emission reductions with broader co-benefits, such as health improvements or reduced gender inequality, to maximize their impact​.

To conclude…

As Pakistan navigates its development trajectory, suppressed demand offers a powerful lens for integrating climate and social equity goals. Key questions remain:

  • How can suppressed demand be mainstreamed into national climate strategies?
  • Should Pakistan’s NDCs prioritize areas that address both mitigation and socio-economic development for such communities?
  • How can we tap international funding mechanisms to better support suppressed demand projects in countries like Pakistan?

Addressing suppressed demand is about creating a just and inclusive framework for sustainable development and can prevent a carbon lock-in if the correct climate action is taken. In particular, employing the latest methodologies for carbon credit projects that address suppressed demand, communities can essentially “leapfrog” traditional high-carbon development pathways. By proactively addressing latent needs with clean and efficient solutions, these projects can prevent the emissions that would arise under business-as-usual scenarios.