Tuesday, February 2, 2010

Market Solutions to Combat Indoor Air Pollution

A recent GVEP International report titled Cookstoves and Markets: Experiences, Successes and Opportunities of December 2009 takes a look at the full horizon of cookstoves, ranging from development, marketing and commercializing of efficient cookstoves to reducing Indoor Air Pollution that leads to one death every 20 seconds. Market Solutions to Combat Indoor Air Pollution
In a comprehensive overview of Shell Foundation’s efforts to develop enterprise based solutions to the challenge of Indoor Air Pollution, Richard Gomes from Shell Foundation says that 80,000 cookstoves sold by program partner Envirofit would improve the livelihood, health, social and economic status of over 300,000 people in Southern Indian states. In addition, these stoves would, over their 5-year lifetime, add up to over Rs 500 million of savings for India’s lowest-income consumers and save over 10 million hours not spent gathering fuel. This, says Gomes, is money kept in the hands of the poor and hours saved that can be better spent on education, family time or personal enterprise efforts.
The 80,000 cookstoves alone could keep over 580,000 tons of CO2 and over 114,000 kg of black carbon from entering the atmosphere. Envirofit cookstoves’ combustion technology reduces 1 ton of greenhouse gasses per stove annually and requires 50% less biomass fuel. According to Gomes, one of the challenges is to make the stoves affordable to users at the bottom of the socioeconomic pyramid with incomes as low as US $2 a day. The key to overcoming this problem is in the stoves design. The latest range of Envirofit cookstoves reduce smoke and toxic emissions by up to 80%, but importantly the improved stoves also use up to 60% less fuel compared with traditional stoves. With each base unit costing ~1399 Indian Rupees (US$28), users are able to pay for the stove within six to eight months through fuel savings alone. This self-financing loop makes it possible to scale-up the initiative over time impacting millions across the globe.
According to Richard Gomes, the most effective, internationally-recognised way to tackle IAP and reduce carbon output is through affordable ‘clean cookstoves’ that reduce emissions and fuel use. Shell Foundation realises that in order to tackle this wide spread, a market-oriented approach is required, one which works along the entire improved stove supply-chain – from research & development through to the end-user, creating a viable large scale stove industry.
Gomes writes: “From 2002 to 2007, the Foundation committed more than US$10million to nine pilot schemes to test sustainable, commercially focused cookstoves. The pilots operated across seven countries (in South East Asia, Latin America and East Africa) and involved partners with significant experience in the field, aimed to learn what worked, what didn’t and then expand the best approach. This resulted in the sale of more than a quarter of a million stoves.
Envirofit launched their cookstoves business in India in May 2008. Since then the Foundation has helped them to develop market strategies which focus on rural villages across South West India and to ensure the sustainability of their supply chain.
Envirofit now plans to leverage Shell Foundation’s investment to secure $25 million in funding which will enable them to expand their operations. The current aim is to sell at least 10 million stoves into emerging markets over the next five years. This achievement is the result of a long journey which began in the research laboratories of Colorado State University.
Shell Foundation provided continuous business development support to help get the business off the ground and to find the right strategic model to reach poor communities at greatest risk from IAP. The Foundation also used its links with Shell Group offices in India to build in-house expertise within the new venture by advising on recruitment, stakeholder engagement, safety guidelines, local business practices and the manufacturing and distribution landscape.
The Foundation recently began a social-marketing awareness campaign in the rural villages of southwest India, explaining the dangers of IAP and promoting the clean cookstoves solution. The campaign is set to go nationwide in 2010. To reach consumers in lower income brackets, the partners are working with several microfinance groups to extend credit to consumers that don’t have access to formal financial services.
This issue of Indoor Air Pollution has moved to the forefront of the news agenda in the past few months, particularly in the United States of America. Envirofit and Shell Foundation are achieving radical reductions in emissions and energy consumption through their new stoves. By establishing a financially viable solution that can be replicated in new markets, there is a good chance that this positive impact will be extended to a high percentage of the poor communities that are most at risk from the damaging effects of IAP, and become a major contributor to halting the march of global warming over coming years.”