The Charcoal Project

LONDON, July 21 (Reuters) – The Kyoto Protocol’s clean development mechanism (CDM) may end from 2013 unless the world can agree and put into force a new round of carbon emissions targets before then, a U.N. paper has said.

The CDM enabled a $20.6 billion trade in carbon emissions rights between rich and poor countries in 2009, to help developed countries meet their carbon emissions caps under Kyoto from 2008-2012.

The world has so far failed to agree a new round of commitments, in faltering U.N. talks. Countries which are party to the Kyoto Protocol asked the U.N. climate change secretariat in June to report back on legal options to avoid a political vacuum, or gap, at the end of 2012. (More)

OPINION

I almost cut myself shaving this morning while listening to a BBC News story about The Hartwell Paper, which I’d only heard about en passant.

The Hartwell Paper was drafted by a group of academics in an attempt to offer a radically different way of framing the issues raised by climate change, and hence a different set of approaches for tackling them.

I’m writing about this now because, if the ideas put forward gain traction, they have the potential to place energy poverty and unsustainable biomass dependence where it belongs: out of the sustainable development wilderness and into the center of the human development policy debate.

The Nut Graph

Via BBC News, I give you, verbatim, Professor Mike Hulme, School of Environmental Sciences, University of East Anglia, England.

On Emissions Cut

“To move forward, we believe a startling proposition must be understood and accepted.

“It is not possible to have a “climate policy” that has emissions reduction as the all-encompassing and driving goal.

“We advocate inverting and fragmenting the conventional approach: accepting that taming climate change will only be achieved successfully as a benefit contingent upon other goals that are politically attractive and relentlessly pragmatic.

“Without a fundamental re-framing of the issue, new mandates will not be granted for any fresh courses of action, even good ones.

“The paper’s first primary goal focuses on access; to ensure that the basic needs, especially the energy demands, of the world’s growing population are adequately met.

“The second is a sustainability goal; to ensure that we develop in a manner that balances social, economic and ecological goals.

“Third is a resilience goal; to ensure that our societies are adequately equipped to withstand the risks and dangers that come from all the vagaries of climate, whatever their cause.

Now to the biomass and energy-efficiency part that concerns us:

On Energy Access

“If energy access is to be expanded to include those without access today while meeting expected growth in global energy demand in the rest of the world, the unit costs of energy will necessarily have to come down.

“But the higher quality fossil fuels are in already tight markets. If the attempt is made to satisfy new demand using these fuels, then costs will rise.

“Alternatives to fossil fuels must be made cheaper. In short, we need to ignite efforts to achieve an energy technology revolution in all the currently active areas: for example, solar panels, biofuels, batteries, and nuclear plants.

“Very large investments in energy technology innovation will be necessary.”

So, Kim, what does this really mean?

With two significant exceptions, I worry that The Hartwell Paper’s vision fits a little too neatly with the discussion we had last week about “Energy for a Sustainable Future,” the UN’s white paper that basically calls for similar action.

The first major difference is about funding this beast, so kudos go to the (courageously tenured?) Hartwellian professors for actually uttering the words “carbon tax.”

To wit: “We propose that nations fund innovation aimed at direct decarbonisation through a very modest (initially) hypothecated carbon tax. The proposed tax would not be designed to change consumer behavior; it would be used to conceive, develop and demonstrate, and even purchase, low-carbon or carbon-free technologies.”

The good news is that I think the Copenhagen fiasco is forcing everyone to rethink and reframe the debate. This can be a valuable exercise if it helps generate the attention and funding need to address global energy poverty.

The bad news is that any such watershed development will require political backbone and leadership.

I just find it very difficult to understand The Hartwell Paper’s assertion that politicians will find energy poverty alleviation a politically attractive and relentlessly pragmatic goal. Honestly, how politically attractive is it to a politician’s career to give money to a developing country?  And what to make of “relentlessly pragmatic?” Yes, efficient cookstoves are pragmatic solutions. But they don’t pay for themselves unless someone’s putting up some serious change to roll them out.

Plus, how many times has the developing world been promised development aid only to see pledges go unfulfilled? What’s the figure again, 0.7 percent of GDP should go to development according to the MDG. I haven’t checked recently but I suspect we’re nowhere near the sum. Not in this economy.

Not in today’s financial atmosphere.

I’m afraid I think there’s as much courage and foresight right now to tackle this issue the way the Hartwellians propose as there is an addressing the systemic problems at the heart of the global financial crisis.

So, as far as I can see, it’s still CDM and VRS that’s going to pay for continued stove rollout. But guess what guys? The Hartwellians want to do away with the carbon market, REDD, and Kyoto, so there goes that funding source.

Dude, you’re such a downer!

Yeah, ok, my post about the UN’s white paper and this one are a bit of a downer. The truth is we do need political courage to address these serious social, economic, and environmental issues. I’m just not sure we’ve struck the right formula yet

But don’t despair, we have several good, positive stories in the works, so stay tuned!

OPINION

In forging ahead this week with our research to discover the cost to society of global biomass consumption using traditional technology (aka “three stones and a pot” or “open fire”), I spoke with Professor Lakshman Guruswamy at the University of Colorado. Guruswamy, a jovial Sri-Lankan native is Professor of International Environmental Law and Director of the University’s Center for Energy & Environmental Security (CEES).

Guruswamy is also one of the world’s leading experts in the field of Energy Justice in relation to the Energy Oppressed People (EOP) (his terms). Both concepts were, until recently, novel ideas to me.

In a recent white paper, Professor Guruswamny makes the point that, “between 2 and 2.5 billion people, amounting to nearly a third of the world, rely upon bio-mass generated fire as their principal source of energy. Unlike the rest of the world, they live without access to energy generated lighting, space heating, cooking, and mechanical power. The plight of these energy oppressed peoples (EOP), who face almost insuperable human, social, and economic development, cries out for energy justice. (My emphasis)

Unfortunately, world attention has almost exclusively been focused on problems of global warming arising from the use and misuse of fossil fuel energy. The world’s decision makers, demonstrated once again, at the climate change conference in Copenhagen, that they are almost obsessively concerned with the emissions of carbon dioxide. They remained oblivious to the lament of disease, problems of public health, lack of safe drinking water, non access to education, sickness, death, and economic deprivation, not attributable to carbon dioxide. In keeping with this approach, they continued to ignore the energy-based problems, afflicting a third of the world’s population, caused by the absence of modern sustainable energy. While some slight attention was paid to the poor who generated carbon dioxide emissions, the plight of the non carbon dioxide generating EOP was totally ignored.”

Whether or not you agree with the Professor, it’s clear that industrialized and emerging nations are poised to leap into the clean fuel and green technology era, leaving behind nearly a third of the world’s population who is destined to continue burning wood, charcoal, and animal dung using noxious technologies that have remained unevolved for the last 3000 years.

So, what gives?

In his paper, Guruswamy says that “the situation of the EOP is intolerable under any canon of justice, and cries out for redress.[4] Geopolitically, developing peoples[5] have the right to develop, and developed countries have a duty to help them do so. Energy is a prerequisite to sustainable development and to addressing issues of poverty, hunger, education, gender equality, child and maternal health, sanitation, and environmental protection.”

Regardless of any emotions elicited by the use of the terms “energy justice,” or “energy oppressed people,” Guruswamy makes an irrefutable and compelling philosophical and practical case for the urgent need to address this issue, and it boils down to this:

1. A developing country has a right to develop and to do so requires energy, and lots of it.

2. There are no plans in the horizon designed to solve the energy problems of developing countries that don’t involve massive investments in fossil fuels

3. The call for reduction in CO2 emissions by the climate change movement puts it at odds with the right of developing countries to build their economies and improve their people’s lot.

Happily, Professor Guruswamy provides us with important strategy to address this conundrum.

He calls it the ASETs program.

ASETs stands for Appropriate Sustainable Energy Technologies. Guruswamy describes “ASETs as low-cost, clean, non-hydrocarbon energy sources from mundane technologies, adapted to the culture of the users, to supply the unmet needs of the EOP. For example, cleaner burning cook-stoves and cooking fuels can alleviate indoor air pollution from black soot while also reducing global warming. (Yes!) Many other mundane technologies already exist to promote better agriculture and encourage women, now freed from illness and hours of fuel gathering, to start small local businesses.” (Yes! Yes!)

from The Need for Energy Justice by Lakshman Guruswamy, Director CEES

Under Guruswamy’s leadership, the Center for Energy and Environmental Security (CEES) at Colorado Law has launched a critical new initiative they call The World Energy Justice Project (WEJP). WEJP’s mission is to mainstream safe, clean, and efficient energy for the world’s Energy Oppressed Poor (EOP), the two and a half billion people living on less than $1-2 a day who have no access to modern energy services.

Starting this summer Guruswamy and his team will set up camp in the remote Andean hamlet of Ayaviri, just above the tree-line at 13,000 feet, where the people eek out the barest of existance. Their first step is to carry out a needs assessment based on careful listening and in close collaboration with the village leaders and its people. What is it they desire most? Clean water? Schools for the children? Better fuels? More nutritious food? Once completed, the needs assessment should point the way to the ASETs to be used that will best address the people’s need using low carbon technology.

If all goes well, The World Energy Justice Project will scale up and help bring energy relief to 2.5 billion of the world’s energy poor.

Low carbon + energy alleviation, now that’s something we can all get behind!

We will keep you posted on the progress of The World’s Energy Justice Project!

The road to Ayaviri, Peru

Malawi

So you think you can’t reduce energy poverty, cut greenhouse emissions, create jobs, and turn a profit at the same time in one of the world’s poorest countries?

Conor Fox thinks otherwise.

It takes a great vision — and probably nerves of steel — for foreign investors to find a business opportunity in a country like Malawi, where about 85% of the population lives in rural areas, more than 50% of the people live below the poverty line, and per capita GDP hovers around $900.

What’s more, Malawi has suffered 57% deforestation from 1972 to 1992 and is carrying an ongoing annual deforestation rate of 2.8%.

Conor Fox is the country representative for Hestian Innovation, an eco-securities firm who sees a business opportunity in the country’s heavy dependence on biomass for home and commercial use.

Stoves are sold at a modest price. Photo: Jeff Barbee

The business premise makes sense on paper: introduce energy efficient technology – mainly in the form of stoves and kilns that reduce woodfuel consumption by up to 80% and 70% respectively — and then sell the Voluntary Carbon Standards-certified carbon credits on the world’s  carbon market. Sounds simple, no?

Maybe. But how does that square with the reality on the ground?

We caught up with Conor Fox in Malawi to find out how the business is doing.

The Charcoal Project: How did Hestian Innovation settle on Malawi as a test market?

Conor Fox: We wanted to develop a project in an African country that had not yet accessed funding through the carbon market and for various reasons Malawi was the best fit. We’ve been involved in this project for over two years now.

TCP: What is your background and what’s your relationship to Malawi?

CF: I worked as a consultant on climate change in South Africa and Malawi on a short-term basis. Apart from that, we had been advised by friends and colleagues that Malawi would be a good place to have a base. Professionally I am an environmental economist and have worked with civil society and government in Latin America and the Caribbean and more recently in Africa.

The Project:

TCP: What has surprised you most between what you planned on paper and the reality on the ground?

CF: What we are doing on the ground is surprisingly close to what is reflected in the PDD (Project Design Document, which is the business plan, essentially), albeit in a more technical matter-of-fact way. One nice piece of feedback we got from a validator was that our project on the ground is better than how it is reflected in the PDD, something that is very often the opposite way around, in his experience.

TCP: Where are you in terms of your projected roll-out? Are you on target?

CF: In general we are on target, although with more investment we could surpass our target and bring more sustainable development benefits to more people.

Hestian's projections for Malawi

TCP: How difficult or easy has it been to get people to adapt and adopt the new technology? With regard to the cookstoves or the tobacco curing barns/kilns?

CF: Early adopters tend to be our best source of marketing via word and mouth and now our challenge is to up-scale operations to meet very high demand. The technologies we are promoting have evolved over time and are now at a stage where we believe they have reached a happy medium between price and performance.

A tobacco curing barn financed by Hestian. Photo: Jeff Barbee

The Technology

TCP: Let’s talk about the stoves. Who designed or advised you on the types of stoves and kilns to be used?

CF: The stoves and barns have evolved over years and many people have been involved at various stages, not least the end-users who give us important feedback. Perhaps it is best not to list those involved for fear of omitting important actors along the way. Suffice to say that the design of both the stoves and barns take into consideration the availability of materials, tools and skills at a village-level and the preferences of the people that use the technologies on a day-to-day basis.

Hestian's range of products

TCP: How are the stoves performing?

CF: The stoves are performing well. The proof is in the pudding – the feedback we are getting throughout the country is really positive.

Only after proving that the technologies are accepted and demanded on the ground have we disseminated them. Their design takes into consideration realities on the ground.

All of our tests are field-based, as this is where we believe it counts. Where lab tests can help at the initial stages in the research and development, it is only in people’s homes and farms can the meaningful results come in.

Moulding the clay stoves the old fashioned way. Photo: Jeff Barbee

Our tests are based on kitchen and barn performance tests in people’s homes and farms before and after the adoption of the improved technologies over extended periods of time. In the case of stoves the tests are based on two 72-hour periods before and after adoption, while the barns are tested over a three-month curing season.

The results of our tests are likely to be conservative as tests are often conducted soon after adoption. With time it is likely that the users will master how their new technologies perform best, resulting in improved efficiencies and lower fuelwood consumption.

TCP: You settled on a five-year working life for the Esperanza stoves, two years for the portable ceramic, and ten years for the rocket barns. Why?

CF: Again these estimations are based on feedback from users. An independent assessment of portable stove users estimated that they can last between two and three years, so we have estimated two year although we have developed a replacement system for stove that may not last that long.

The Esperanza stove has a longer life as it is fixed and built into the kitchen and it can be maintained indefinitely. A spare parts and maintenance component has been set up to enhance the durability of the Esperanza.

The Rocket Barn is built with locally available materials without any exotic or hard to find parts. We believe that it can last as long as a house, as it is built with brick and has a corrugated iron roof. The estimated ten-year life span is likely to be conservative and maintenance and repairs offered by the project can extend the life span of the barn.

Carbon Finance

TCP: How important is the carbon finance component to the project?

CF: The products on offer would in most cases be beyond the reach of our customers in the absence of the project, which is only viable with carbon finance. In other words without carbon finance, we would not be able to bring improved technologies to thousands of households.

TCP: How hard or easy is it to sell these eco-securities on the voluntary emissions reduction market?

CF: The major challenge of monetizing emission reductions is the speed of the certification process. Prior to validation and registration, interested investors are wary of the risks. But once a project is registered it becomes increasingly attractive for investors.

TCP: Have the sales of the offsets generated the kind of revenue you anticipated? How is this working on your bottom line? How is it affecting the scope and timetable of the rollout of the project?

CF: The challenge of many carbon projects is that many of the costs are felt up-front while the revenues start at zero and activities are financed from initial investment. As our project progresses more and more people will be benefiting from the technologies and revenues are likely to be significant but during the start-up period the cash-flow management is challenging. All going well for our next project we will be in a better position to invest in a system that has been tried and tested and we can hit the ground running.

TCP: How are you doing in terms of hitting your targets w regards to stoves and barns sold?

CF: We have set ourselves very ambitious targets. For the barns we are playing catch-up at the moment but are comfortably doubling our annual productivity and targets are very much reachable. For the stoves, we had a late start but are firmly on target. In our first 7 years we are targeting up to 150,000 customers, but we know there are at least 2 million potential customers in Malawi alone.

TCP: Is the cost of the stove subsidized to the consumers? What is the cost? How was this cost basis arrived at?

CF: All our technologies are subsidized, with levels varying from technology to technology. Where micro-financed, payback periods are usually under one year as interest rates are high.

Sustainability Analysis Assessment

TCP: How many people are directly and indirectly employed by the project on the ground?

CF: The project has a network of implementers that generate income for well over 400 people including staff, stove production groups, stove promoters, builders, carpenters and metalworkers.Over half are women.

Carbon Emissions Reductions

TCP: You have projected a reduction of almost 200,000 tons of CO2 for the seven years ending November 2015. Are you still sticking to that figure?

CF: Our projections are estimates, but we can surpass targets.

Kicking the tires of the Carbon Market.

The Kyoto Protocol-sponsored CDM (Clean Development Mechanism) and the VCS (Voluntary Carbon Standard) represent the two most widely accepted certification programs for carbon offset projects that generate credits for sale on the carbon market. Each scheme has its supporters and detractors.

(For a primer about the Carbon Market Overview, check out this presentation prepared by the World Bank and presented at the March 2009 PCIA meeting in Uganda.)

Either way, foreign investors continue to invest in carbon credits generated from energy efficient stove and kiln programs located in Africa in places like Ghana, Mali, Senegal, Kenya, Tanzania, and Rwanda, among others.

But although the prices of various types of carbon credits have seen a decline on the international carbon market as a result of the logjam in Copenhagen in December, investors are still betting on the emergence of legally biding international treaty that will lay the financial foundations for a robust carbon market.

Finding a sustainable and reliable funding stream for energy efficient programs in Africa and elsewhere around the world will be critical to the accelerated adoption of energy efficient technologies by the world’s energy poor.

We wish the folks at Hestian the best of luck!

In no particular order, here are my top ten predictions for the year.

1. The US Senate will consider levying taxes against India and China in an effort to “level” the playing field with these top CO2 polluters.

2. In the absence of a binding agreement on curbing global greenhouse gas emissions, governments will look inward at more aggressive actions that will independently reduce the various “wedges” that make up the global emissions pie.

3. There will be a major push to implement more aggressive energy efficiency measures in developing countries

4.  After all the posturing and politicking of Copenhagen, progress will be made to establish a framework outside the UN context to protect the CO2-sequestering capacity of tropical forests through compensation mechanisms.

5. The US will lead in alleviating energy poverty in developing countries, which is why The Charcoal Project will work hard this year to put on the agenda a crash program in energy efficiency for stoves, kilns, and alternative biomass fuels.

6. The US Congress will pass meaningful legislation designed to curb emissions

7. The US will embrace the development of green technology/clean energy challenge against competitors like China, Japan, and Europe.

8. A series of countries, mostly in Sub-Saharan Africa, will begin to consider large-scale biomass energy-efficiency programs.

9. In the context of forest protection, ideas will be floated designed to regulate the commercial trade of charcoal across borders. (See our post)

10. By December 31st, The Charcoal Project will have solidly established itself as an actor in the field of biomass energy-efficiency!

Yes, 2010 will be better than 2009.

Kim