The UN Foundation estimates that more than 3 billion people are unable to access modern energy services for basic heating and cooking needs and that 1.5 billion people live without reliable access to electricity. Household air pollution (HAP) is a leading risk factor for acute respiratory infection, the leading  cause of mortality among children under five, as well as cardiovascular and circulatory diseases, chronic lung disease. Addressing the energy needs of the poor while promoting environmental sustainability and improving health outcomes presides at the top of the  development and public health agendas. Governmental and philanthropic preferences for market-led  approaches implies that lessons from the Kyoto Protocol’s carbon market remain relevant for other policy approaches which aim to join poverty reduction with clean energy goals. How and under what conditions do market-led approaches for sustainable development effectively deliver energy services to the poor? This paper evaluates the effectiveness of household energy interventions for poverty alleviation and climate-friendly development in Cambodia, Laos and Vietnam. In particular, the paper disentangles the role of carbon finance and other features of the project design to determine how market-friendly policies can both hinder and help development goals. The study finds that the projects most likely to achieve financial sustainability and long-term local development benefits in the post-intervention period had to misrepresent or creatively justify their project model in order to qualify for carbon-market funding. It follows that the requirements for accessing the carbon-market may in fact hinder or obstruct the possibility for long-term market-friendly development.