Climate change is one of the major developmental concerns of this century. In the absence of global mitigation efforts, climate change can have significant effects in the global economy — and poorer nations face disproportionate impacts. Join us in discussing how developing countries are using innovations in low-emission development to solve immediate poverty alleviation needs while contributing to long-term sustainability goals. (Photo by Solar Sister)
Climate change is expected to hit developing countries the hardest. Its effects — higher temperatures, changes in precipitation patterns, rising sea levels, and more frequent weather-related disasters — pose major risks to all sectors of the economy and especially for agriculture, food, infrastructure and water supplies.
As countries seek to enhance global greenhouse gas (GHG) mitigation efforts, countries are exploring innovative and cost-effective ways to scale-up emission reductions as part of their low-emission development strategies (LEDS). LEDS encompass a set of policies that are consistent with a country's sustainable development priorities and that promote a long-term transformation towards a low-carbon economy.
In the short term, LED strategies support key domestic priorities, such as increasing energy and food security, achieving industrial efficiency and productivity goals, reducing air pollution and creating new economic opportunities and ‘green’ jobs.
How can LED strategies support short-term poverty alleviation goals? What kind of innovations and best practices have we seen so far in Africa, Latin America and Asia? Our discussion kicks off with crowdfunding for renewable energy by Timothy Hasset from the World Wildlife Fund; new financing models and marketplaces as explained by Bill Farmer of the Uganda Carbon Bureau; and product developments, including new stoves and lighting options, from Estomih Sawe of TaTEDO.
Join our panel of experts in exploring how climate-smart initiatives can contribute to both the short-term goals of poverty alleviation and the long-term objectives of a low-carbon world.
Organizations such as Kiva, MyC4 and Babyloan have shown the viability of crowdfunding in support of financial inclusion. These organizations and others like them allow individuals to participate for small amounts in loans to borrowers for many different purposes. A paper prepared for the 2011 Microcredit Summit entitled Indirect P2P Platforms provides an overview of the sector.
Household renewable energy products, including solar lighting kits and biodigesters, are becoming more important in microfinance, since loans can often be repaid by the borrower’s avoided cost of alternative energy such as kerosene. Crowdsourcing funds for such microfinance loans can provide numerous advantages, including cost and risk tolerance.
Certain crowdsourcing sites do not charge interest to their local microfinance field partners, who source and vet borrowers and handle loan processing. Crowdsourcing sites may, in certain cases, link the repayment of loans to the actual repayment by the local borrower, thereby providing a form of credit insurance to their field partners. The cost advantage and risk tolerance provided by certain crowdsourcing platforms can allow for greater innovation by microfinance field partners who seek to expand their relationship with borrowers through new products such as renewable energy applications.
While the actual crowdsourced capital is a clear benefit to renewable energy access, an even more significant impact could be that this form of capital is used to demonstrate the effectiveness and credit profile for these products so that more traditional forms of capital are applied to scale renewable energy access.
The Uganda Carbon Bureau is pioneering the use of East Africa-wide Programmes of Activities ("PoA") for low emissions development using the United Nations' Clean Development Mechanism. Once each PoA 'umbrella' is registered, we can help an unlimited number of individual projects to earn carbon finance to supplement their income stream. The first PoA was registered 26 November and will support improved cookstove suppliers. Others following shortly will cover domestic and institutional biogas suppliers, renewable energy projects and tree planting.
Our special interest is to ensure that these PoAs are operated in a fair trade, open access way, so that, for example, as many different stove suppliers as possible can benefit from this income. In the stoves case, we insist on the recognition that the carbon dioxide emission reductions originate with, and are owned by, the women using the improved stoves — so they should be treated fairly when it comes to sharing benefits from the sale of the Certified Emission Reductions (carbon credits) that they have created. These benefits could be a lower, more affordable stove price, or an annual maintenance to keep it in 'as new' condition, or a cash share of the carbon income for the women or their community.
Each project registered under a PoA umbrella can enjoy this stream of carbon income for up to 21 years — this is a timescale of support way beyond donor or even domestic budgets, and transforms access to long-term funding that is actually a payment for an environmental service — clean, less polluting cooking by African households. But it depends on a sustained demand for these carbon credits at fair prices — something that the current Doha climate change meeting must address.
Estomih Sawe, TaTEDO, on low-carbon innovations
In Tanzania, forests provide over 90 percent of national energy supply through wood fuel and charcoal, and this wood-fuel usage is unsustainable. TaTEDO has developed an innovative small scale retort technology for carbonizing crop residues from agro-processing industries where huge heaps of residues are an environmental challenge. The technology has several other advantages, such as the use of pyrolysis gases for carbonization and the use of extra heat for bread and cakes baking, since the technology is also fitted with an oven.
The high-quality powdered charcoal produced from the low cost retort has more than 90 percent fixed carbon content and could be used to produce high-quality briquettes to substitute the use of charcoal in urban areas. Charcoal briquettes offer an economical solution to the rising costs of charcoal from forest and other cooking fuel in cities. The powdered charcoal could also be used by farmers as bio-char to improve soil fertility, thus improving agricultural productivity.
The innovative package, technology, products and businesses, has multiple opportunities of contributing to poverty alleviation: first, by converting agro-residues into valuable feedstock for powdered charcoal production. Second, during the carbonization process, which uses a limited amount of wood, the use of extra heat for baking enables potential entrepreneurs to produce and sell baked products. The use of bio-char as soil improver can help farmers to increase crop productivity several times. Third, briquette production and marketing is an important source of income and contributes significantly to reducing deforestation, since it could substitute for charcoal produced from cutting trees from the forest. Finally, emissions of huge amounts of carbon dioxide will be mitigated, since no trees will be cut to produce charcoal.
The adverse effects of global warming are tilted against many of the world's poorest regions and likely to undermine development efforts and goals. And while energy is not itself a Millennium Development Goal (MDG), access to modern forms of energy is key to alleviating poverty. This conversation examined the technology, financing, and policies needed to scale low-emission development as a near-term solution to poverty and long-term solution to climate change.
Low-emission development, such as the adoption of improved cook stoves in East Africa, marries reduced emissions with the immediate household benefits, such as lower fuel costs and better air quality. Currently, due to the inefficiency of the commonly used low-quality technologies, stoves, candles, kerosene, and charcoal kilns, the poor pay higher unit costs for energy than the well-off. Addressing this inequity could pay dividends on both the national and the local levels.
Nationally, by improving efficiency or switching to renewable/alternative fuels such as briquettes and biogas, reliance on oil imports can be reduced, improving energy security and reducing foreign exchange payments. The saved funds could be invested in productive economic activities or in social services. Implementation of carbon capture and storage (CCS) can help prevent future damage from climate change and reduce the risk of a “poverty relapse."
On the individual family level, reducing energy costs helps families allocate more of their income for needed food, education, health services, and other basic needs, thus significantly contributing to poverty reduction. Clean stoves and technologies like LEDs also provide clean energy that do not contribute to negative health outcomes as many traditional energy sources do.
This conversation covered several factors needed for successful low-emission development. Read the full summary.