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Mobilizing a $100 Billion Market to Bring Clean Cooking Solutions to the Poor

S. Vijay Iyer's picture

Harmful fumes from a traditional outdoor wood stove, Lesotho

I’m on my way to Phnom Penh, Cambodia for the 2013 Clean Cooking Forum organized by the Global Alliance for Clean Cookstoves. Consider this stunning fact:  household air pollution from cooking with solid fuels kills four million people each year. That’s the finding of the latest Global Burden of Disease study, published in December 2012.

Unlike malaria, tuberculosis and HIV/AIDS, for all of which the death toll is dropping every year, the number of premature deaths due to household air pollution is actually rising. Why is this happening?

About 2.8 billion people, over a third of the world’s population, rely on open fires or inefficient stoves to cook and heat their homes. They use solid fuels such as charcoal, wood or other biomass, animal dung, and coal, all of which produce toxic smoke that pollutes the air inside and outside their homes.

This is the reality in many developing countries. The challenge is how to fix it. That’s what this forum in Cambodia seeks to do. The World Bank’s Energy Sector Management Assistance Program, or ESMAP, together with the Global Alliance for Clean Cookstoves, offers some recommendations in a forthcoming report, which I will discuss in Phnom Penh. The key points: 

  • The clean cooking market has immense potential. Think of it: 700 million households spend over US$ 100 billion on cooking fuel each year. This is a solid base for market development. Proof of that potential is the strong growth among clean biomass enterprises and improved cookstove manufacturers in recent years.
     
  • Still, the market potential is not fully realized. Consumers may not know which cookstoves are more efficient and healthier. Those in the market to buy clean cookstoves may not have access to the credit they need. There is a need for donors to support clean cooking solutions, including to get market activity started.


The Bank launched the Africa Clean Cooking Energy Solutions initiative – or ACCES – in 2012. It’s a program designed to make clean fuels and technologies accessible and affordable in Sub-Saharan Africa.  It supports consumer engagement, business development, access to financing, as well as support for policy reform that encourages clean cooking solutions.

Senegal, Uganda and the Democratic Republic of Congo have started piloting ACCESsince November 2012, with market and consumer research studies and a regional quality assurance program in collaboration with the Global Alliance. The World Bank’s partnership with the Global Alliance started when the latter was founded in 2010.  Both have been working to bring clean cooking to 100 million households.

Clean cooking is also an important part of the Sustainable Energy for All initiative, a global effort to achieve universal access to energy by 2030. Access to energy is defined as access to both electricity and clean cooking fuels.  I insist on this because clean cooking fuels are often overlooked in the access agenda.

The household cooking tragedy—a deadly tragedy, as we have seen—continues, in part, because its victims are the world’s poorest people. By using market forces, we can save countless lives and ensure better health and well-being for families, especially the women and children who make up most of the victims. When I see the results some countries, such as China, for example, have achieved in finding safer cooking solutions, I’m convinced that we can solve this problem. The challenge is to mobilize the resources and scale up successful approaches. If we meet it, we can build a future in which women and children don’t die from toxic kitchen smoke.

Comments

Submitted by Judith Pryor on
Thank you for this informative post on how clean cooking solutions can be brought to the poor. The Overseas Private Investment Corporation (OPIC) is proud to have worked with Global Alliance for Clean Cookstoves to help achieve the goal of having millions of households adopt clean and efficient cookstoves and fuels by 2020. OPIC committed a $10 million loan to Seattle-based MicroEnergy Credits to help assist qualified microfinance institutions launch and expand clean energy lending programs. www.opic.gov/blog/microfinance/its-as-simple-as-a-stove

Great article! Thank you! We agree that mobilization of the market is essential for sustainable access to energy, GHG emissions mitigation, and life-saving health impact. We believe what is needed for effective mobilization of this very important high-impact market opportunity is: (1) Scalable, industrialized strategies for Fuel-switching to affordable clean-burning fuels like Methane, Ethanol, LPG, and ultimately Hydrogen, (2) Financial products for institutional impact investors to engage in relatively low-risk high impact investments for triple-bottom line returns with market liquidity, (3) collaborative business models for rapid deployment of partnerships and joint-ventures with local businesses and entrepreneurs to deliver tangible on-the-ground results, (4) innovation of currently available technologies with scalable models for investment, deployment and predictable amortization, (5) rapid engagement of private/public partnerships and market-making organizations to catalyze real action, real business and real impact.

Why do the World Bank and the Global Alliance continue to promote LPG as a clean energy solution for the developing world? The IEA projects that the world is on track to increase petroleum consumption by 800,000 b/d this year alone. Global consumption of oil, gas and coal is increasing exponentially as are the disastrous environmental consequences of extracting these fuels from increasingly less accessible land and undersea sources. Developing countries must subsidize LPG for the poorest of their citizens. Those that are trying to reduce these subsidies—like India—are encountering strong resistance. How is this a viable energy future? Enough sunlight hits our planet every forty minutes to power all human activity for a year. Developing solar energy technology is the only way for us to preserve a habitable planet for the future. There are more than a million solar cookers in use in China and India. Scheffler solar thermal cooking systems on the rooftops of ashrams and schools in India are cooking meals on every sunny day for tens of thousands of pilgrims and students. China currently has ten, 10-year United Nations Framework Convention on Climate Change (UNFCCC) (CDM) certified solar cooking projects, involving 1,223,200 people in 305,800 coal-dependent households. Global warming reduction from these projects is projected at 7,238,625 tons of carbon dioxide equivalent (tCO2e). The projects are located in northwestern China, a region more than thirty degrees north of the equator with brutally cold winters but little rainfall. An area this far north is not an obvious location for solar cookers however, due to the dry, sunny climate of western China and the ability of parabolic solar cookers to function even in below freezing temperatures, these projects, which reduce the use of coal, brush and dung, are all eligible for CDM certification. Five more Chinese solar cooker projects are currently awaiting CDM registration. They are projected to involve an additional 243,000 households and 952,800 people with additional carbon savings of 4,566,560 tCO2e (from reduced coal use). Even using a conservative estimate of $8 per carbon credit unit, this will provide $63,699,896 in CER revenue by project completion. Returns at this level are attractive to a range of investors as carbon markets continue to mature. Mandatory annual monitoring has confirmed the successful adoption of parabolic solar cookers which are in continuous daily use and which have averaged 9% higher use than projected, with tCO2e reduction now predicted to be 7,962,487, exceeding the original figure of 7,238,625. I welcome your comments.

Thank you for your suggestion. We agree that solar cookers have a useful role to play, as your work has shown.

We also believe that gas and electricity have an important role to play. As Professor Kirk Smith wrote in an editorial in Energy for Sustainable Development in 2011 (http://ehs.sph.berkeley.edu/krsmith/publications/2011/cooking_gas_esd_2011.pdf), for "convenience, controllability, [and] time savings," half the world cooks with just two types of cookstoves: electricity and gas. Solar energy can of course produce electricity, with which to cook. But it is also the case that, for better control over heat, many cooks prefer gas to electricity.

For those wishing to cook with gas, natural gas would be the fuel of choice. But many parts of the developing world do not have natural gas distributed to households. And natural gas is not available to rural households even in the richest of countries. As such, LPG will continue to be the cooking fuel of choice for millions of households.

Given the price of LPG today, we agree with you that LPG would not be a fuel for the poorest of the poor. Our approach is certainly not to promote a universal price subsidy for LPG with the objective of enabling the poor to cook with it, because the fiscal burden would be unsustainably large. But there are also many households who are capable of switching to LPG for cooking but continue to cook with solid fuels for a variety of reasons -- lack of familiarity with LPG, fears about safety, lack of enforcement of sound rules and regulations, lack of adequate competition resulting in high prices, or lack of reliable cylinder delivery. In such circumstances, addressing these problems can enable households to shift away from solid fuels to a gaseous fuel.

It is also important to bear in mind that the contribution of LPG for cooking to global oil consumption is very small. Even if one third of those currently cooking with solid fuels were to switch to LPG between now and 2030, and each household (of 5) consumes 10 kg of LPG a month for cooking, that would amount to an annual increase of less than 40,000 b/d, or 5% of the increase in global oil consumption this year.

In our quest to achieve universal access to clean cooking and heating solutions, we believe we need to look at all options that can eliminate the harmful indoor air pollution -- and all too often the drudgery associated with fuel collection -- caused by cooking. Solar cooking is certainly one of the solutions, together with other options.

Thank you again for your comments.

1. You state in your reply to my post that: "Solar energy can of course produce electricity, with which to cook. But it is also the case that, for better control over heat, many cooks prefer gas to electricity."

I am not referring to the use of solar PV-generated electricity to cook. Since a one hundred square foot PV panel is needed to power a single hot plate, this type of electricity for cooking is certainly not practical for the world's poor. I am referring to solar thermal cooking. Please see this webpage for more information. (http://solarcooking.wikia.com/wiki/Introduction_to_solar_cooking)

Cooking gas does provide the opportunity to adjust the flame, however I do not consider this an adequate justification for promoting the use of a finite fossil fuel, whose current extraction methods are resulting in increasing instances of underground water table contamination and the release of methane gas into the atmosphere, and which must be processed and transported thousands of miles from wellhead to consumer using fossil fuel powered refineries, ships and trucks.

2. You state that, "Given the price of LPG today, we agree with you that LPG would not be a fuel for the poorest of the poor."

Even if the two billion people who live just above the income level of 'the poorest of the poor" can afford LPG today, will they be able to afford it in 5, 10 or 25 years? Basic economics predict that the world's poor and their governments will not be able to compete for this diminishing and finite energy source over the long term since the global giants-the U.S., China, Japan, India, Russia, Europe, Brazil--their industries and their citizens will be able and willing to pay higher and higher prices to continue fueling their advanced economies.

3. You state that once the problems of: lack of familiarity with LPG, fears about safety, lack of enforcement of sound rules and regulations, lack of adequate competition resulting in high prices and lack of reliable cylinder delivery are addressed, households will be able to shift away from solid fuels to a gaseous fuel. But what will happen to these people when they can no longer afford that 'gaseous fuel" because global demand has outstripped global supply?

4. You state that, "the contribution of LPG for cooking to global oil consumption is very small" noting that even if one third of those currently cooking with solid fuels were to switch to LPG between now and 2030, that would amount to an annual increase of less than 40,000 b/d, or 5% of the increase in global oil consumption this year.

I understand that the potential amount of LPG consumed by poor families for cooking would remain small in comparison to the amount of petroleum-based fossil fuels consumed globally for energy production, heating, transportation and industry. My point is not that these poor people will have a discernible effect on the market, it's that in the next decade or two they will instead become the victims of this market as industrial and first world consumers drive up international gas prices and make LPG unaffordable for the world's poor.

5. I am not advocating solar cookers as THE solution to the energy problems of the poor. I am urging organizations like the World Bank to support the development and distribution of this inexpensive, zero emissions technology, which uses free energy and which could dramatically reduce the amount of money poor people spend on purchasing LPG or gathering fuel. There are already instances in India, Mexico and elsewhere of people combining the use of LPG and solar cookers to minimize emissions and reduce fuel consumption. The advantage of this for the LPG industry is that these people will remain their customers, even when prices start to rise. They may purchase less, but they won’t give up totally and move back to biomass. The advantage for the customers of using solar cookers is that they can still afford to buy some LPG, since they won’t have to use it for all of their cooking needs. The advantage for the planet is healthier people and a healthier environment.

Thank you for your willingness to engage in this discussion.

Thanks for your response.

Experience around the world has shown that solar cookers can never be THE cooking solution for the simple reason that they require the cook to stand in unshaded hot sun around mid-day.  Most people cook in the morning and evening.  A cooking device that cannot be turned on at will but whose utility depends on the weather, can only be a secondary solution. In remote regions with sunshine, solar cookers may find favor in homes without access to firewood or LPG, but even there, the intermittency factor prevents such cookers from being the main cooking device in a home. Most low-income households cannot afford two types of cooking devices.

The World Bank is committed to helping the poor get access to clean cooking that is sustainable, affordable, and sensitive to local cooking traditions. In addition to promoting clean cookstoves that meet these criteria as well as local needs, the Bank Group has encouraged the supplementary use of solar cookers where appropriate. The challenge is to engineer a solar cooker that is affordable, can be used indoors, works at night, is built of locally available materials, and fits existing cooking practices. Until solar cookers meet those criteria, their viability will remain limited except in specific cases.

With the current cost and utility of solar cookers, these should perhaps be encouraged more in developed countries where more affluent users with sensitivity for the environment could adopt these in lieu of gas and electric cooking.  It is especially suited to replace outdoor gas and charcoal barbecue grills.  Perhaps there is more merit in promoting this than in pressing poor households to adopt solar cooking.

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