Understanding Suppressed Demand in Safe Water Supply Carbon Projects

In the realm of carbon markets, safe water supply projects offer a unique opportunity to generate carbon credits while delivering life-changing benefits to communities. One key concept that enhances the viability of these projects is suppressed demand — a mechanism that acknowledges the latent, unmet need for cleaner, more sustainable water access in underserved populations. Understanding how suppressed demand works is essential to appreciating the full impact of these projects on both carbon emissions and human well-being.

Suppressed demand refers to a situation where people do not currently consume a service or product considered as basic Human need, typically due to financial, infrastructural, or technological limitations (poverty context). In the context of water supply, many communities rely on unsafe water sources, which often necessitate energy-intensive water boiling for purification — a practice limited by access to fuel and resources.

The carbon market recognizes suppressed demand by allowing projects to account for potential emissions reductions that would occur if communities had access to clean water without the need for boiling. This means that even if communities are not boiling all their water due to lack of fuel (meaning they are consuming unsafe or contaminated water), a project can still claim carbon credits based on the assumption that, in a more equitable scenario, people would purify their water to meet basic health standards.

Safe water projects, such as the installation of water filtration systems or boreholes, prevent the need for burning biomass to sterilize water. In regions where wood or charcoal is the primary fuel, boiling water contributes significantly to deforestation and greenhouse gas emissions. By installing sustainable water sources, these projects effectively avoid emissions that would otherwise occur, even if communities had not been boiling all their water previously.

For example, under a suppressed demand approach, carbon credits can be issued based on the assumption that every litre of safe water provided displaces emissions from boiling, even if historically only a portion of households boiled their water. This approach acknowledges the right to safe drinking water and aligns carbon accounting with the principle of climate justice, recognizing that lack of resources should not penalize communities in terms of carbon credit generation.

Despite its advantages, the concept of suppressed demand has sparked debates within the carbon market. Critics argue that it involves hypothetical baselines that can lead to over-crediting, as emissions reductions are based on assumed, rather than actual, avoided emissions. Some also express concerns about the verification of these projects, questioning whether they genuinely lead to additional and measurable climate benefits.

To address these concerns, major carbon standards such as the Gold Standard have established rigorous methodologies for suppressed demand projects and updated them to guarantee conservativeness and high integrity. These standards require strong baseline assessments, conservative crediting approaches, and robust monitoring to ensure that projects deliver real and verifiable benefits. Transparency and community engagement are also emphasized to align climate finance with local development needs.

Incorporating suppressed demand in project methodologies broadens the potential for safe water initiatives to attract carbon finance. It makes projects more financially sustainable, enabling the scaling of infrastructure and long-term maintenance. For project developers, understanding and correctly applying suppressed demand calculations ensures accurate credit issuance while demonstrating the full environmental and social benefits of the intervention.

Furthermore, this approach encourages a holistic view of impact: beyond emission reductions, safe water access improves public health, reduces time spent collecting and boiling water, and alleviates pressure on local ecosystems.