DelAgua Health is harnessing carbon finance to distribute clean cookstoves and water purification devices to 100,000 households in western Rwanda this year. Now it wants to cover the entire country, targeting the poorest 30% of the population.
26 June 2014 | DelAgua Health is in the business of emissions avoidance as well as emissions reduction. It’s a tricky but vital distinction. In addition to cutting climate-warming emissions that are already occurring, the UK-based company is focused on preventing emissions that never have to occur in the first place – especially from the 3 billion people in the world who cook food using traditional cookstoves or open fires, and the 884 million who still do not have access to safe drinking water.
Carbon finance through the sale of offsets is central to DelAgua’s business model. Its programme of activities (PoA) under the United Nation’s Clean Development Mechanism (CDM) combines the distribution of two household devices – clean cookstoves and water filters – to Rwandan families and has been piloted in 2,000 homes so far. In addition to reducing the need for fuelwood to boil water and cook food, therefore alleviating pressure on forests, the water filters almost instantaneously reduce water-borne illnesses while the lower-smoke cookstoves relieve respiratory ailments over time.
Matt Spannagle, DelAgua’s Climate Partnerships Manager, spoke with Ecosystem Marketplace (EM) ahead of the release of EM’s full State of the Voluntary Carbon Markets 2014 report about the motivation behind the double registration, some unexpected benefits of clean cookstoves, and why carbon offset sales makes more sense than other potential finance streams.
Allie Goldstein: I know that DelAgua registered this project under both the CDM and the American Carbon Registry (ACR)? What was the motivation for the double registration?
Matt Spannagle: The low prices on the CDM is mainly it. We wanted to sell on the voluntary market as well as to people who would normally buy CDM. If you talk to American buyers, particularly US buyers but also Canadian buyers, they would rather see the American Carbon Registry because it’s American or the VCS (Verified Carbon Standard) because it’s based in the United States. The idea of private-sector led or business-led initiatives that are doing good things has more traction with US buyers than a United Nations system that is somehow government mandated.
AG: Do you still have hope for the CDM?
MS: That’s kind of the billion-dollar question! It’s a pretty risky gamble to put all your eggs in that basket. But at the same time, the fundamentals are: climate change is terrible now and it’s getting worse every day. The commitment globally is for a two-degree target, though anyone who knows anything about it doesn’t really believe we’re going to meet two degrees on the current trajectory. But that is the political commitment to doing something about it, and the only thing that has been shown to work at scale so far is market-based mechanisms. And CDM is the vanguard of that market-based mechanism.
AG: Tell me a little bit about the programme of activities and how the crediting works for doing both cookstoves and water filters within one program.
MS: It’s about avoided biomass use. You use less wood for cooking [with the new cookstove], and if you have a water filter, you don’t have to boil your water. There is a bit of a cross-over factor: When we gave people cookstoves, they would use less wood to boil their water, so we had to do a calculation for that cross-over, which we had to get approved by ACR and by the CDM Executive Board. But in terms of the monitoring requirements, it’s relatively straightforward.
And if you’re going through the trouble of setting up a program to get a cookstove in someone’s house, it’s not much additional effort to also put a water filter in their house. So you get that efficiency of scale and efficiency of process. We have a pilot of 2,000 households. We have good uptake rates, high responsiveness, and villagers are getting on with their lives.
AG: What are some of the initial misgivings people have about adopting these technologies?
MS: Cooking is a deeply ingrained part of people’s lifestyles. If I came to your house and said, ‘you’re not allowed to cook with your own stove, you can only use the microwave’ – what’s the likelihood you’re going to do that, even if I gave you a new microwave? It’s not going to happen, right? But [it might be different if] if I also told you that by cooking on your current stove you’re at risk for respiratory disease and shortening your life by 10 years. These are people who are effectively smoking two packs a day, so they’re aware that the smoke is not good for them. They can see it.
[Still], the household misgiving is, ‘Is it going to cook my beans as well? Is it going to be convenient? Am I going to have to do something different?’ The approach we’ve taken is to emphasize the benefits that are not just about smoke. With the water filters, the benefit is: your kids aren’t going to have to go to the health clinic as often. With the cookstoves, we thought the major benefit would be around less fuelwood collection and eventually buying, and that’s definitely a benefit that people appreciate, but what we find most people talk about is the speed of cooking. They can get a pot of water full of beans simmering in 20 minutes whereas before it took an hour. Hopefully what that means is you come home from the field at lunchtime, have a hot lunch, and then go back to the field relatively quickly, whereas previously they might not bother to start the fire and only eat cold beans, or they’d send someone back from the field or back from school early to get lunch. So there’s this time-saving element. We didn’t expect that to be the major benefit, but that was a factor that people really liked.
AG: I know the project uses bar code tracking and remote sensing to understand how often people use the stoves and water filters. How does that work?
MS: We do the distribution program in a public-private-partnership with the Rwandan Ministry of Health. When we do the distribution, each stove has a barcode so we scan that, we take a photo of the person who’s getting the unit, and then the community health worker does a household visit within the week to go through a training and take the GPS (Global Positioning System) coordinates of that household so we can track the stove. We also have a statistically significant sample of remote sensing monitors and those are attached to SIM cards in the cookstoves and the filters that measure in real-time heat for the cookstoves and flow rate for the water filters so you can tell when someone is using the device. That data is automatically downloaded through the phone network every 24 hours.
AG: What was the uptake rate for the stoves?
MS: The lowest usage rate was around 75% and the highest was 100%... That’s higher than you see in the literature, and we believe the reason for that is we have ongoing contact. We pay community health workers, so they go back to each of the households about every six weeks specifically about the stoves and the filters, but they’re also in the village, so if a kid is sick and goes to the health center, the community health worker also knows how to repair the stoves and the filters.
AG: What role do carbon offsets play in financing the project?
MS: The business plan was to operate purely from carbon finance for the distribution to the poorest people, and from the carbon finance as well as the sale of the units for people who earn more than a few dollars a day. Fundamentally, carbon finance is at the heart of the business model.
AG: Why? What are the advantages of using carbon finance instead of grants or loans or whatever other sources of financing there are out there?
MS: I think it goes back to this thing we talked about in terms of uptake rates. To maximize revenue, we need to be able to demonstrate that people are using the cookstoves and filters, and therefore reducing their fuelwood use. If you demonstrate that, then that implies going back to the households again and again to make sure people are using them, and that [human contact] is what is delivering the high uptake rates. So the business model structure inherently delivers better environmental outcomes simply because of the incentives. If it was grant financing, typically you put in a program design, you say we want a million dollars to distribute cookstoves to 1,000 households – whatever the numbers are – you’d get a pile of money, you’d implement the program, you’d come back and report on it. The attention span of donor governments is likely less than a year or two. So what happens two or three years down the track when [the devices] break? It’s a recipe for non-maintained systems, whereas the carbon finance model is inherently about maintaining the uptake over time.