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Featured Conversation: Carbon and Climate Change

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)

Leading the Conversation

Pablo Benitez, moderator, from the World Bank Institute on climate change and low-emissions development

Pablo Benitez, World Bank InstituteClimate 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.

Timothy Hassett, Director of Sustainable Finance, World Wildlife Fund, on crowdfunding for renewable energy

Timothy Hassett, World Wildlife FundOrganizations 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.

Bill Farmer, Chairman, Uganda Carbon Bureau, on carbon finance programs for development

Bill Farmer, Uganda Carbon BureauThe 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

Estomih SaweIn 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.

Conversation Summary

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.

Comments

PabloBenitez's picture

Hello Estomih, Bill, Timothy and all the participants of the Striking Poverty dialogues,

Welcome to the panel on Low Emission Development! It is a great opportunity for us to count with your expertise. We are eager to learn from your experiences on climate finance and innovative solutions for development. We have a world-wide audience on-line, also joining us in this conversation. To kick-start the dialogue, can you share examples of how Low Emission Development strategies can contribute to short-term poverty alleviation objectives?

EstomihSawe's picture

Low emission strategies can help alleviate poverty in several ways, including to enhance energy security for consumptive and productive needs at the local and national levels. By improving efficiency (improved stoves, charcoal production) or switching to renewable/ alternatives fuels such as briquettes, 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.

EstomihSawe's picture

This is especially important considering the changing socio-economic trends, including growing population and urbanization which are expected to exacerbate these existing energy access issues and associated impacts.

Charcoal is used for cooking by ormore than 85 percent of urban dwellers, annual consumption is estimated at 1.6 million tones requiring approximately 15 million cubic meters of wood. Since Charcoal is harvested unsustainably, it results in significant degradation of forest land with loss of more than 100, 000 hectares annually with impacts on biodiversity and ecosystem services as well as net GHG emission from deforestation and other combustion emissions of more than 10 million tons of carbon dioxide. The revenue from charcoal industry is estimated at more than USD 650 million annually.

Nate Hultman's picture

Thanks to WBI and Striking Poverty for initiating this important conversation. I think there’s a great amount of work on this and I too am looking forward to hearing what the other participants can share in terms of their experience.

I am writing from the COP in Doha where there has been a great deal of conversation on this. One approach to sharing ideas that I find promising is the LEDS-Global Partnership where people can upload ideas to a common database:
http://en.openei.org/wiki/LEDSGP

One interesting example takes the form of a different "LED" -- Light-emitting diodes, which certainly can be seen as a small part of part of low-emissions development. These are the LED-lighting programs that integrate LEDs and inexpensive solar panels into robust rechargeable lanterns. These approaches provide immediate benefits for lighting services and can enable improvements in quality of life and, presumably, educational outcomes. They also are clean and do not contribute to negative health outcomes. As such they contribute to MDGs and also the Sustainable Energy for All goals. Lighting Africa and Lighting a Billion Lives in India are two complementary examples of models to encourage deployment of this technology.

Nate

University of Maryland &
Brookings Institution

xiaochen's picture

Thank you, Pablo and Nate. Poverty alleviation is not a new topic in international development. However, if we put it into the context of 21st century, poverty alleviation is a new challenge humans have never experienced. Economic growth related poverty, climate change/disaster related poverty, social equality related poverty, political stability related poverty and human development related poverty are all contributing to the problem. A poverty alleviation solution has to, at least, deal with the problem matrix listed above. A conventional poverty alleviation solution which only addresses one issue of the matrix may not be effective at all. In the worst cases, the benefits gained from one solution may contribute to a much bigger environmental/ social/ economic loss in the future.
The World Bank's latest report: Turn Down the Heat (Nov.2012) warns the world is on track to a “4°C world” marked by extreme heat-waves and life-threatening sea level rise. Adverse effects of global warming are “tilted against many of the world's poorest regions” and likely to undermine development efforts and goals. A poverty alleviation plan has to, at least, provide guidance for adaptation, mitigation, inclusive green growth and climate-smart development. When one takes a closer look at the structure and main components of a low emissions development strategy, one may find that a LEDS plan can be regarded as a blueprint designed specifically for the 21st century poverty alleviation problem.
http://climatechange.worldbank.org/content/climate-change-report-warns-d...
However, it is never easy to move a theoretical concept to real world actions. Here are some LEDs related questions that all actors in international development community need to answer:
Are we in consensus? If not yet, what need to be done?
What are the relationships between LEDS and other poverty alleviation solutions?
What are the main barriers in developing a LEDS in developing countries?
Can we find some innovative ways to blend different resources to finance LEDS activities?
Considering the unique challenges the least developing countries are facing, can we design some special solutions/approaches/ mechanisms/ arrangements to accommodate the special need of these countries in LEDs?
I would be grateful for those who can shed some lights on these questions in the following days.
Best regards
Xiaochen

Xiaochen Zhang

BillFarmer's picture

We have seen so many examples of how the adoption of improved cook stoves in East Africa marries reduced emissions with the immediate household benefits of lower fuel costs, better indoor air quality and fewer accidents - plus of course taking pressure off the local environment from a reduced demand for fuelwood and charcoal.

Over the past two weeks I've attended the launch of the World Bank's African Clean Cooking Energy Solutions initiative in Dakar (along with Estomih), and the ACCES team has since been with us in Kampala in joint planning meetings with the Global Alliance for Clean Cookstoves. Uganda features in both the ACCES and GACC programmes, and it's great to see these two major programmes linking up to support a Uganda country action plan that has been developed by a wide range of local participants. This really gives us the opportunity to demonstrate how a coordinated and well resourced action plan can deliver results.

By a remarkable coincidence, we received the news about the CDM registration of our multi-country Programme of Activities for improved cookstoves a few hours before we started last week's planning meeting. That gave us something concrete to share with participants about how our fair trade approach to using carbon finance can deliver emission reductions and poverty alleviation. It's the women who use the improved stoves that create the emission reductions, so we ensure that they are the key beneficiaries of the carbon finance. I'm happy to share more thoughts on this in subsequent posts.

TimothyHassett's picture

Low emission household energy applications such as improved cookstoves, solar lighting and biodigesters provide numerous advantages to low income households and their environments. Improved cookstoves reduce harmful indoor smoke and local deforestation by improving fuel efficiency. Solar lighting and biodigesters can replace the use of paraffin and kerosene, which reduces smoke and fire hazard.

In addition to these benefits, low emission energy applications can support short-term poverty alleviation. Improved cookstoves reduce the amount of wood or charcoal needed to prepare food, thereby improving a househod's budget. The cost of solar lighting kits and biodigesters can be repaid through the avoided cost of kerosene or paraffin and then improve a household's budget. Solar lighting can also increase the number of hours household members can be involved in study or other productive activities.

MicroEnergy Credits (www.microenergycredits.com) has done work linking microfinance institutions to carbon markets to provide financing for the development and scale-up of low emission household energy products. It uses carbon markets to support the growth of low emission household energy applications that could benefit from crowdfunding. MicroEnergy Credits also benefits from crowdfunding through its website Yurtcozy (www.yurtcozy.org), where individuals can calculate their carbon footprint and purchase carbon credits in support of investment in low emission household energy applications.

EstomihSawe's picture

Productive uses of low emission energy sources are important to economic growth. Low carbon energy fuels and electricity could boost household income by providing lighting that extends livelihoods activities beyond daylight hours. They could power machines that generate valuable time savings and increase output and value added. Low emission options provide opportunities for employment, they enable rural people to diversify their income sources, thus reduce dependence on agriculture.

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. The use of more efficient fuels can reduce the large share of households income spent on cooking, lighting, thus saving families with much needed income for food, education, health services and other basic needs, thus significantly contribute to poverty reduction.

PabloBenitez's picture

Thanks to All for sharing your ideas. Indeed, cookstoves, solar lighting, LED, and biodigesters are excellent examples of climate smart programs that contribute to both poverty alleviation and greenhouse gas mitigation. They are also great examples of how technologies have been adapted (and adopted) to local circumstances in Africa. But, can we talk more about financing? Can you tell us about the key elements for a successful business model that supports low-emission development initiatives? In your examples, who pays for the investments and who bears the risks? Bill mentioned a fair trade approach to carbon finance, how does it work and how can fair trade attract additional financing for projects? Timothy talked about linking micro finance institutions to carbon markets. How did you get the "buy-in" of micro finance institutions into the carbon market business?

Thanks for this really interesting discussion. I have a question/comment on the efficacy of cookstoves as a successful climate smart intervention. A recent rigorous evaluation of cookstoves in India by J-PAL found that cookstoves did not have an impact on any of the desirable outcomes: the cookstoves were not used regularly by women, consequently cookstoves did not have an impact on reducing household's smoke exposure, or improving health outcomes or reducing fuel use (http://www.povertyactionlab.org/publication/up-in-smoke) . I am interested in learning about how the experiences of other projects have been different and what have been the "conditions of success" of implementing a cookstove program. A program where cookstoves are adopted by households. Abt Associates, where I work, had had a successful improved cookstoves program in Bolivia (http://www.abtassociates.com/Noteworthy/2010/Cooking-for-Life--Energy-Ef...). In this case, we hypothesize that adoption was high because cookstoves also provided the dual benefit of heating the homes. This was not the case in the Orissa program that J-PAL evaluated. In other's experiences are dual (and immediate) benefits to households important in improving the adoption of cookstoves? Have any of these efforts been evaluated to answer these questions? In my view the question of adoption, and the conditions of success, are really important so that limited carbon financing is deployed for programs that are designed well to have an impact.
Tulika Narayan, Abt Associates Inc.

BillFarmer's picture

Pablo asks how a fair trade approach with carbon finance can help.

Even with the current low carbon prices, if the bulk of the carbon revenue is retained by the supplier organisations of the respective stoves, biodigesters etc for use in providing price, maintenance and other incentives to the users, this still has a powerful long-term effect in stimulating their adoption. When a large percentage of the carbon revenue is retained by other intermediaries, then of course there's less available for these incentives.

We've also seen that all financiers appreciate the intensive monitoring that carbon projects undergo. This contrasts with earlier shorter-term stove projects that fairly rapidy lost interest in monitoring follow-up. So, we believe that both soft and commercial finance flows are encouraged by projects being registered under any of the major carbon standards. And the multi-faceted support that we are able to provide to our member projects under our regional CDM Programme of Activities means that financiers know that we are around in the critical early days of new projects when they most need help.

TimothyHassett's picture

I would like to consider Pablo’s question from the perspective of how to get microfinance institutions involved in low emission household energy deployment and what is the potential role of carbon markets.

Microfinance organizations are generally risk averse in nature. They are financial intermediaries whose financial sustainability depends on having a strong loan portfolio with good repayment patterns. Microfinance borrowers can also be risk averse and uncomfortable borrowing for new products, whose track record is unknown to them. Successfully growing low emission household energy products requires that microfinance borrowers and lenders become comfortable with such products. There are examples where this has been accomplished. Grameen Shakti has had great success in growing the number of solar home systems in Bangladesh since their introduction over 10 years ago.

Crowdfunding can help microfinance borrowers and lenders become comfortable with low emission household energy products. As noted in my initial post, certain crowdfunding platforms do not charge interest, which can generate cost savings for a microfinance institution. Such cost savings could be used to create demonstration installations of low emission products in communities that have not had experience with them. This would allow potential microfinance borrowers to see a product in use and become more comfortable borrowing for its acquisition.

My initial post also noted that certain crowdfunding platforms provide a type of credit insurance, where their lenders are only repaid if the microfinance borrower funded by the platform repays. This reduces a microfinance institution’s risk in offering new products to their borrowers and could serve to motivate them to innovate by offering low emission household energy products.

Carbon markets can be valuable to help finance low emission products. Given the complexity of carbon markets, only the largest and most sophisticated microfinance institutions will be able to access the markets directly, however. Organizations such as MicroEnergy Credits, mentioned in my previous post, helps microfinance institutions access carbon markets so they do not have to develop this specialty themselves.

EstomihSawe's picture

The choice of financial options and their effectiveness for low emissions/renewable energy initiatives depends on a number of factors including whether energy services are for households basic needs or for productive uses. Some of the available options include: public finance from National budgets (mostly from taxes), official Development assistance (ODA), grants, public private partnerships and specially designed funds such as rural energy funds.

Also private finance, from different financial institutions, i.e. Micro financial institutions, savings and credit cooperative societies, end users upfront payments. Foreign and local investors are other potential options. Carbon credit markets i.e. Certified emission reduction credits, from CDM or voluntary carbon market credits. Experience has shown that, there is no single kind of finance that can meet the full range of needs for the low emission or renewable energy sector. It is important to have a diversity of financial institutions and finance mechanisms. Indeed, currently available financing options are inadequate especially for the poor.

xiaochen's picture

Timothy's post on crowdfuding is very interesting. Micro finance has been tested in many developing countreis as useful fincial innovation to address the problems of financial inclusion and social protection. Crowdfunding could possibility leverage financing resources from non-insititutional lenders to finance low emissions actions in poor countries. The combination of the two could possibility become an important part of a 21th century solution for poverty reduction and climate change. The role of private sectors are pretty clear in the model Tim hasdescribed, my question is: what is public sector's role in incubating/ scaling up such solutions? Are you aware of any business models/ practices that could possibility get both public sectors and private sectors engaged in crowdfunding?

Xiaochen Zhang

Jessica Morton's picture

I think this is a great initiative and I am pleased to have been invited to participate. My name is Jessica and upfront I should declare that I work in the carbon capture and storage space (CCS) so I suppose my thoughts on this issue are coming from a slightly different angle. However, I am really keen to share my thoughts and hear yours as to whether CCS can operate productively in this space and directly influence poverty alleviation. In fact, this conversation is coming at an opportune time for me because I am preparing some work which is looking at if/how CCS can operate within achieving the Millennium Development Goals (MDGs).
The point I have come to is that whilst energy is not itself a MDG, access to modern forms of energy is key. However, as some countries increase access to energy the reliance on fossil fuels grows. How then can we ensure that there is increased access to energy for schools, hospitals and so on, whilst remaining environmentally responsible? To date there has not been a lot of academic literature on the social benefits of CCS such as job creation and poverty alleviation. But it is an interesting space because if these justifications could be made then huge gains in CO2 mitigation could be achieved as it may become a convincing argument for increased access to CCS funding. In this case, crowdfunding would have to be astronomical :) to get a CCS project off the ground BUT with crowdfunding, microfinancing and grassroots projects on one hand, and huge mitigation energy projects happening on the other, my hope is that solutions to climate change and poverty will meet somewhere in the middle. We are not just talking about changing peoples lives, but we are talking about changing attitudes and perspectives, about making environmental protection the core of all political and social issues. Without this, the impacts of climate change will have devastating effects on people and resources that are already stretched.

So, to tie that all into the discussion. Do people think there a balance can be achieved between supporting microfinance projects AND large low-emission technology projects? Is one better than the other?

Jessica Morton

PabloBenitez's picture

Hi Jessica, welcome to the forum! You have posted a very interesting question. The IPCC says that CCS is one important technology to consider - as part of a mix of other technological solutions – for stabilizing GHG concentrations at a safety level. In the long-term, implementation of CCS can help us to prevent future damages of climate change and reduce the risk of a “poverty relapse”. In the short-term, poverty alleviation effects may need to be evaluated case-by case. Some questions you would need to consider: is CCS enabling energy access in a cost-effective manner in comparison to other energy supply alternatives? What are the domestic job impacts of CCS? What spillover effects can be attained through innovation in CCS? What are the development/social effects of diverting investment from other activities into large-scale CCS?, and so on. I will be delighted to learn more about what comes from your assessment on CCS and links to MDG.

jfinlayson's picture

For those who want to learn more about these organizations and issues:

IPCC: Intergovernmental Panel on Climate Change http://www.ipcc.ch/ - a scientific body that "reviews and assesses the most recent scientific, technical and socio-economic information produced worldwide relevant to the understanding of climate change"
CCS: carbon capture and storage space (a simple primer on how it works: http://edition.cnn.com/2008/TECH/science/07/29/carbon.capture/index.html)
GHC: Greenhouse Gas http://topics.nytimes.com/top/news/science/topics/globalwarming/index.html "an increasing body of science points to rising dangers from the ongoing buildup of human-related greenhouse gases — produced mainly by the burning of fossil fuels and forests. Global emissions of carbon dioxide were at a record high in 2011..."

See helpful resources suggested by our moderator here: https://strikingpoverty.worldbank.org/resources

Nate Hultman's picture

I've been happy to read the many contributions on LED, so thank you to all of the earlier posters. Jessica brings an important question, which is the potential role of larger, low-emissions projects to the overall development agenda. In this sense I think both she and Pablo have addressed the primary element here, which is that it is likely a technology that we will have to see implemented at a broader scale. A subsequent question is whether it would come "at the expense of" other kinds of technologies, such as distributed RE; For this evaluation, maybe it's helpful to view CCS as primarily an infrastructure-type industrial project, where the benefits would accrue primarily from new jobs and technical capacity within the industry, but maybe not provide a lot of direct energy service benefits. In this sense too, the financing would probably be quite different, as Jessica alluded to. But overall it's going to likely be present in some countries, so now is a good time to start evaluating how it fits into overall national LED strategies.

I look forward to more discussion on this and other topics.

University of Maryland &
Brookings Institution

xiaochen's picture

It is interesting to see that the discussions have covered both technology and financing side of the equation. Surely, innovative technological and financing solutions are extremely important in addressing both climate change and poverty reduction. Hopefully, more ideas will come soon. But I would like to use this post to invite/open a discussion on how innovations in climate related polity/policy instruments could contribute to the poverty redution. GET FIT, as an example, is now tested in Africa. It brings both pullic and private sectors in supporting mitigation related policy in the low income countries which contribute to the solution to rural electrification/energy access. The policy designed for scaling up RE agricultrual pumping in India is another good example to hit two targets with one stone (I don't like to kill birds:)). Any thoughts/ good practices on this?

Xiaochen Zhang

BillFarmer's picture

I'm interested in Xiaochen's mention of GETFIT. Besides our work of using CDM regional Programmes of Activities for improved cook stoves and biogas systems, we're also close to registering another regional one covering grid-connected renewable energy projects - wind, solar, geothermal and hydro.

When we recently read the design details about the proposed Uganda GETFIT activity (that offers a feed-in tariff premium to such renewable energy (RE) projects) we were surprised to discover that the British, Norwegian and German governments' contributions to it effectively prevent the supported projects from being registered under the CDM - they are actually blocked from selling any resulting Certified Emission Reduction carbon credits into "official markets" – this is in contradiction to some carefully misleading language in the GETFIT design document that says that “RE projects are encouraged to seek accreditation under the Clean Development Mechanism (CDM)”.

The reason for this block is that these European governments wish to claim the greenhouse gas emission reductions for their own account in their national reporting of emission reductions. So it's tough luck for the Ugandan projects that actually generate these reductions - no CDM carbon credit issuance for them, because the donors are laying claim to the reductions for themselves. The lesson here is that it's essential to read all the small print about donor-supported initiatives such as GETFIT.

Part of what we are trying to do with our regional PoAs is to generate innovative - but fair and transparent - financing solutions for projects in Africa that question such practices.

PabloBenitez's picture

We’ve talked about financing and technology. Let’s talk a bit about policies that create new domestic markets for carbon and support a transition towards a low carbon economy. We have seen enthusiasm with new Emission Trading Schemes (ETS) underway in California, New Zealand, Australia, Quebec and Korea and also with seven ETS pilots underway in China. How can these policies benefit the poor? Will they encourage investment in more efficient technologies that will result in job creation and increased productivity?

EstomihSawe's picture

Investment in efficient energy technologies which cut out waste and ensure more is done with the same amount of energy can ensure that available energy services are optimally utilized, and that negative impacts of energy production, transmission and use on health, environment and economy are minimized.

In most cases energy efficient technologies have not been given adequate priority in developing countries. Yet, investing and adopting more efficient energy technologies could increase productivity, reduce unit costs of production, create economic growth opportunities with local job creation.

EstomihSawe's picture

For example, assessment of wood fuels projects (www.tatedo.org) in Tanzania has shown that households, SMEs and institutions using efficient wood fuel technologies can significantly reduce the costs of production and use of wood fuels and hence improve their economic situation.

Up to 60 percent wood and cost savings have been achieved accounting for savings of US$ 900 per institution per year. Households have been able to save up to 70 percent on firewood and charcoal use, respectively. In monetary terms this refers to cost reductions of about US$ 80 for firewood users and about US$130 for charcoal users per household per year.

Also, more than 10,000 artisans and technicians have had the opportunity to be employed in the production and marketing of efficient wood fuels technologies.

The African Union (AU) Convention for the Protection and Assistance of Internally Displaced Persons (IDPs) in Africa (also known as the Kampala Convention) which entered into force on 6th December, 2012, will likely create new domestic markets in Africa for carbon and support a transition towards low carbon economies. The treaty aims to protect those displaced within their own countries through violence, natural disaster and other forces.
Under the Convention, States are obliged to allocate resources, adopt national policies and strategies and enact legislation to prevent displacement. States parties are also to take measures to protect and assist persons who have been internally displaced due to natural or human made disasters, including climate change. The Kampala Convention among other things is aimed to promote and strengthen regional and national measures to prevent, mitigate and eliminate causes of internal displacement; establish legal frameworks for sustainable solutions and mutual support between States to combat displacement and address its consequences. Africa has a myriad of IDPs not only because of conflicts but also because of the effects of climate change. This policy signed by thirty-seven (37) African states will likely boost the activities of both public and the private sectors of African economies to create new domestic markets in the continent.

Alhaji Sulley

TimothyHassett's picture

Xiaochen posts a great question regarding whether there are public sector initiatives that could support the growth of crowdfunding mechanisms to finance low emission household energy.

There are numerous ways the public sector can support microfinance activities. Regulations that assist the development of savings alternatives for microfinance clients are one example. The creation and maintenance of credit bureaus covering microfinance borrowers is another example. Such public sector initiatives, which support microfinance, indirectly help crowdfunding alternatives that use microfinance institutions as intermediaries.

In addition to initiatives that support a strong microfinance sector, public sector assistance is sometimes required to deal with a unique challenge in working with many crowdfunding platforms. Numerous crowdfunding platforms fund loans in hard currency (USD or Euro) and require repayment when the microfinance borrower repays. Therefore, the crowdfunding sector would benefit from any public support making it easier for crowdfunding websites to move currency in to and out of a country when restrictions would otherwise be operative.

Bo Hoier's picture

Pablo you write: Let’s talk a bit about policies that create new domestic markets for carbon and support a transition towards a low carbon economy. To make these carbon markets have effects for the poor needs a removal of burocracy. Qualified manpower that can make valid proposals and reporting looses their time on fulfilling wordings and removes their vital forces from the implementations. The relative few capabel persons must be put to implement and free from making long aplications and reports. The so called transparancy has become a web of obstacles hindering and poor from benefitting what was ment for them.
If for instance a 1 kW 5kWh 230V solar panel, inverte and battery system have a fix suportive loan available in the rural banks then a rural farmer, who may be analfabet can benefit.
It can have the form of a purchase department that negosiate the best posible price, durability and quality for a set of standard size making it cheap. This to avoid the 200 to 500% expences on top of the production price until the equipment reaches the end consumer. The end consumer pays more to all the links in the supplychain than for the actual production price! It would be interesting to see a breakdown of the organic costs of the different sections in the supply chain including mounting and eg 5 years of functioning at site in a rural village in Africa.
Inteligent grids linking solar power, small local battery storage and micro hydropower can become more cost efficient and relyable with thin networks that exchanges power at low rates.

Bo

Good afternoon everyone, sorry for joining the discussion so late. However I would like to share with you the experience we had in Bolivia on creating an internal mechanism of emissions neutralization before this discussion ends.

This emission neutralization mechanism was created from a project funded by the Development Bank for Latin America (CAF), and mainly consists of:

Following the guidelines of the International Standard ISO 14064:1 "Greenhouse Gases inventory reporting" the project assessed the carbon footprint of companies in the private sector (including hotels, banks, factories, etc..), After having made these measurements and identified reduction actions within their operations, these companies were encouraged to neutralize the remaining emissions under the Corporate Socio Responsibility (CSR) framework from investing in local emissions reduction projects . To do this, we followed the requirements of Part 2 of the standard ”requirements for quantification and monitoring of emissions reduction projects”, to measure emissions reductions of three local projects consisting of: Installation of solar cookers in rural areas, forest area protection in the Chore Reserve and energy efficiency in the brickmaker sector .

Companies that have measured their carbon footprint and implemented reduction actions in their facilities, in addition of benefiting with the reduction in their operation costs, have the option to take responsibility for the rest of their emissions under this financing scheme, strengthening their CSR strategies. These emissions reductions projects in most cases also generate important social benefits in the communities where they are implemented, so that investments in emissions reduction projects become not only a way to offset the carbon footprint of businesses but also a significant contribution to the country sustainable development.

Valeria Revilla
Servicios Ambientales S.A.

PabloBenitez's picture

Hi Valeria and welcome to the forum! Your experience brings an excellent example of how a voluntary approach for reducing GHG emissions can result in projects that benefit communities living in rural areas. It also shows how this voluntary framework helps companies to be more efficient.

jamal01962's picture

why not new invester invest in soller energy items and promote these items all asian countres are very big market welcome

if that items are economicals problem is that these kind of items are very costly only purchasing power 5 percent people are

afoard from muhammad jamal pakistan muhmmad.jamal@yahoo.com

muhammad jamal

BillFarmer's picture

I enjoyed reading Valeria's post as we've been running a carbon neutral service here in Uganda for the past few years. A couple of embassies, some safari companies and eco-lodges and various projects and enterprises with a green focus have offset their carbon footprints by buying Plan Vivo forestry credits that are generated by Ugandan smallholder growers.

The exercise has been a local proof of concept that we can establish a well organised domestic carbon market to international best practice standards (Greenhouse Gas Protocol, properly certified credits with external auditing and a transparent registry, etc) and secure a good price for the credits. The volumes are tiny, but show what can be achieved if we get more organisations to make this part of their CSR programme. A local aviation company recently became fully carbon neutral after we showed them what Nature Air did in Costa Rica. So we don't have to hang around and wait for the EU-ETS to sort out the mess of CDM CER prices - we can take local action to provide a market for local projects that generate carbon credits, and use this as an education tool to explain about climate change, local mitigation actions and simple actions to reduce carbon footprints. And it's also a very positive practical exercise, compared to sitting all day endlessly compiling CDM PDD documents and jousting with CDM DOEs.

I totally agree estimated Bill

Valeria Revilla
Servicios Ambientales S.A.

PabloBenitez's picture

We are entering the last week of this forum. We talked about policy, technology and financing innovations that can support Low Emission Development and short-term poverty alleviation. Let's focus now on networks and collaboration. How do we collaborate with other practitioners on these themes? Are we learning and gaining from each others' experiences? Can we collaborate more, and more efficiently? Can you share good experiences in terms of partnerships and networks that worked for you?

BillFarmer's picture

If you have a bunch of competing commercial enterprises, you have to work pretty hard to get them to collaborate. When there's an alignment of business interests it can work, but when it involves sharing a business advantage - that's something different.

The best example of good networking and collaboration that we are currently involved in (that I mentioned in an earlier post above) is the World Bank's new African Clean Cooking Energy Solutions (ACCES) and the Global Alliance for Clean Cookstoves programme.

In our East Africa region, country action plans are being jointly developed, and there's a genuine effort being made to bring all interested parties together. So far there's a good spirit of cooperation regarding topics of mutual interest. Many enterprises are still competitors when it comes to marketing their products, but it already seems clear that quality standards and support will improve not just by the network's efforts, but also from a virtuous cycle of better quality at affordable prices prompting others to follow the leaders' example. Fingers crossed that this will continue.

Even in our field of carbon finance, there's now a growing acceptance in the networks that the Certified Emission Reductions are created by the users of the stoves, and are therefore owned by them, as opposed to the stove makers who previously claimed the 'carbon asset' as theirs. So this means that stove owners now have to be properly shown what benefits they are going to receive in exchange for their carbon credit stream. It'll be interesting to see how this becomes a mainstream feature of the carbon markets to boost low emission developments.

With our multi-country Programmes of Activities we hope that these cross-border initiatives will also stimulate greater collaboration.

PabloBenitez's picture

As we are getting close to the year's end, I would like to thank to all of you who participated in “Striking Poverty” and contributed to very rich discussions related to Low Emission Development and Poverty Alleviation. Estomih, Bill, Thimothy and Nathan have shared diverse experiences and innovative examples on technology, financing and business models; which certainly contribute to the dual goals of poverty alleviation and low emission development. We have learned about clean cookstoves, switching to alternative fuels (such as briquettes, biogas), energy efficient lighting, renewable energy and others. We also spoke and identified good examples of policy instruments for LED, including crowdfunding and emission neutralization mechanisms (thanks to Valeria, Xiaochen). And, Bill has given us excellent examples about networks and collaboration, including the Global Alliance for Clean Cookstoves: http://www.cleancookstoves.org/

I hope to continue to be in contact with all of you and I wish you success in your ongoing initiatives.

Pablo

RenewableX's picture

Finally! most circles realize the correlation between poverty reduction and renewable energy. The increased uptick of affordable home solar system use has been like a double edge sword into the side of negative health, environmental and family money expenditures. So as we look at a diversity of poverty reduction solutions, renewables should be considered a solution to complement this diversity.

In addition to this growing consensus and concord, the development community now has ways to combine, align and communicate strategy, in-field implementation and overall interactions through massively scalable and affordable social technology.

But how do we get the market penetration of Facebook proportions throughout Africa and drive this limitless digital opportunity into the next billion homes or hands of the developing world? Obviously, the for-profit social tech companies seem to have got the penetration idea down pretty well. So what ways can we align with a slightly similar model that is slightly for-profit, yet impacts poverty, renewable energy and the environment.

First off, all of the stakeholders from the social tech companies to the rural communities need to be shareholders in what ever exchange is developed. There cannot be this one-sided conundrum that we see throughout society, where its either the profiteers monopolizing or the NGOs saturating local markets with free products and services that kill any chance of localized economic development.

Secondly, a structure has to be in place where by an economic development component is integrated into the infusion of capital, goods and services so that the local rural economies have some ownership and financial opportunity in the process.

So now that the stage is set, lets discuss social gaming potential for rural electrification and poverty reduction. The quickest ways for adaption in social tech are also the funnest, most entertaining and addictive. At the same time these types of digital communities and games are also some of the most profitable.

What social gaming can do is bring gaming design tastemakers together with the low-carbon development circles, rural communities and educational institutions in a way that allows the developed world to interact socially in creative gaming environments. Meanwhile, ad & game revenues partly benefit all stakeholders from investors, to revolving MFI structures and educational capacity funds for SHS systems and entrepreneurial rural initiatives. As gaming generates billions of dollars annually a hybrid structure, could channel those part of those funds to the dilemmas we’re trying to solve.

As the world is in dire need for quickly scalable means to solve the worlds’ environmental, energy and poverty crisis, this social gaming suggestion is one attempt at a resolution. The Solar Games.

Cheers,

Bradley Bulifant

President
Renewable Exploits, LLC
3710 Sutton Dr.
Orlando, FL 32810
O: 407.575.0533
F: 888.224.2084
bradley@renewableexploits.com
www.renewableexploits.com
RENEWABLE EXPLOITS, LLC

IGES's picture

One of the major sources (and growing) of Co2 is transport emissions. Mobilisation is essential for economic growth and industry, yet it is probably the most problematic sector to resolve. There is also a significant by-product of transport- Black carbon (Particulate matter) that has in june 2012 been confirmed as carcinogenic by the World Health Organisation, leading to probably the worlds current largest cause of death and illness, especially susceptible are infants and under 5,s.

Impact Global emission solutions provide a solution to reduce waste soot (Particulate matter, Black Carbon) and simultaneously reduce emissions from transport and convert this into additional energy in the combustustion process using the most natural combustion catalyst available, hydrogen and oxygen. Reducing operators costs and significantly reducing black carbon by up to 85% using some of the most advanced technology available, as a low cost simple retrofit option which reduces also significant lifecycle emissions compared to replacement vehicles and engines.

We are currently seeking project participants and Governmental partners from developing countries, with a minimum of 500 vehicles to become part of wider transport based energy efficiency projects, initially with letters of intent, followed over the next 6-12 months with pilot projects in your region.

For more details about projects please see Port of Antwerp Baseline project: www.impactglobalemissionsolutions.com or email projects@impactglobalemissionsolutions.com for more details

Really the climate change is an alarming problem for all the creatures but as per my view we human beings are the main responsible for this, for our benefit we have disturbed the total ecosystem and now we are suffering. As a matter of reform we should plant as much as trees as we can before it is too late.

Sksajwan