[Stoves] India LPG stoves approach Fwd: [stove] Giving it up

Fri Oct 2 13:26:41 CDT 2015

Hi Paul,

Thanks for sharing. Lets use these three points to base the discussion:
1. Tackling the root cause of market failure

Proponents of market system approaches believe that the best way to help
people out of poverty is to address the underlying causes of market
failure. Rather than focus very broadly (eg on macro-economic problems) or
individually (eg on specific businesses or families), they instead look at
the ways poor people and businesses interact in particular sectors. By
analysing and understanding the characteristics of specific industries and
value-chains, they can help make systemic changes that create lasting,
inclusive growth.
2. Stimulating scale

Supporters of market systems approaches argue that firm-centred approaches
are often insufficient on their own. That's because the systems that enable
firms to prosper, services to expand and access to improve are rife with
'market failures'. As a result, individual businesses continually hit these
'systemic' obstacles, which prevent them and their competitors from scaling
up to reach large numbers of poor people.

By contrast, market systems approaches seek to address the specific and
unique underlying causes of poor performance in particular industries or
sub-sectors.  By stimulating changes in the rules, relationships, barriers
and incentives that affect how public and private actors behave, they can
help important market functions to be performed more effectively. If
successful, this improves the whole market system – enabling multiple
businesses to innovate, grow, reach out and serve wider populations.
3. Intervening sustainably

As every market system is dynamic, it is essential that systems approaches
build the capacity of players to respond to future changes. This requires
careful analysis of key market functions and players, and how they could
work more effectively in the future, based on their different incentives
and capacities.

A market systems approach aims to align the policy objectives of a
programme's intervention with the private incentives and capabilities of
the key actors in the system. In some cases, this may partly compromise the
immediate poverty focus of activities – but it means that results emerge
from lasting changes in the market system itself, and are not just a
temporary response to the activities of the programme.

By addressing the causes of market failure in this way, a market systems
approach ensures that the social and economic benefits for poor people last
far beyond the period of intervention.

(http://beamexchange.org/en/market-systems/rationale/)

I would say kind of a market systems approach. It doesn't really
permanently offer a solution to resolve the market failure to the poor to
access services. Its a temporary redistribution approach...but its not
changing the market failure. This approach is more favorable in trying to
stimulate scale...its a national program intending to reach large numbers,
but unless you deal with the market failures there will still be barriers
for the intended market. Its probably touching the third point a little,
with other approaches in place that might not be mentioned in Kirks email.

The GACC for a long time has really supported efforts to do things at a
market based approach. Seeing how every market is different and presents
its own unique challenges, it's difficult to copy and paste the same cool
idea from another market. I suggest that people on the listserv interested
in looking at different models and approaches (pure market based,
government partnerships, etc.) get more involved with the social enterprise
sector and impact investing. There you will learn about how other business
models in the social sector are reaching customers at the bottom of the
pyramid and what techniques and strategies you can glue together to make
things work in your own market. I remember the first time people started
talking about Social Impact Bonds and everyone was super excited. Those are
the kind of out of the box ideas that the stoves market is missing.

I am much more of a supporter of creating a business that deploys all of
the needed systems together (sales, distribution, after-sales, etc.) than
rely on trying to create the magic partnership between various institutions
to make the system work (its much harder to control the outcome when there
are lots of actors and everyone has different motivators). But sometimes a
mix of innovative partners works when you are trying to reach sale and
serve more people.

Best,
Christina

On Fri, Oct 2, 2015 at 6:20 AM, Paul Anderson <psanders at ilstu.edu> wrote:

> Stovers,
>
> This came today from Kirk Smith's [stove] listserv, and is of interest to
> all Stovers.
>
> Is this a Market Systems Approach?   What can be done on a similar note
> for biomass stoves?
>
> Paul
>
> Doc  /  Dr TLUD  /  Prof. Paul S. Anderson, PhD
> Email:  psanders at ilstu.edu
> Skype: paultlud      Phone: +1-309-452-7072
> Website:  www.drtlud.com
>
>
>
> -------- Forwarded Message -------- Subject: [stove] Giving it up Date: Fri,
> 02 Oct 2015 02:02:47 -0700 From: Kirk R. Smith <krksmith at berkeley.edu>
> <krksmith at berkeley.edu> Reply-To: krksmith at berkeley.edu To: Kirk R. Smith
> <Krksmith at berkeley.edu> <Krksmith at berkeley.edu>
>
>
> Today is Gandhi's Birthday, a national holiday in India.  See below how
> the Prime Minister is spending his day appropriately -- officially giving
> 5000 below-poverty-line families new LPG connections in Jharkhand, one of
> the poorest states of India (and gaining political credit by doing so).
> The subsidies going with these connections were given up by middle-class
> households and transferred to the BPL families as part of the ambitions
> "GIve it Up" campaign underway since April  So far, well more than 3
> million households have given up their subsidies, amounting to something
> like a 200 million USD shift of resources from the rich* to the poor.   The
> BPL families are given a stove and their first cylinder from Social
> Responsibility funds by the major oil companies in the country.  The
> expectation is that 10 million households worth of subsidy will shift
> before long -- rising at 30,000 a day I was told yesterday.
>
> This is a sea change in the landscape of clean fuel access and a great
> opportunity for creative research designs to evaluate the health and other
> benefits and to follow stacking and other behavior changes.
>
> More soon, but happy Gandhiji's birthday/k
>
> * Actually, I was told that very few of the truly rich have given up their
> subsidies -- it is mostly the middle class.  Sounds familiar -- it is the
> rich who have the highest expectations of public subsidy in my country too.
>
> [image: imggallery]
>
>
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>

-- 
Christina Espinosa
University of the Pacific '10
School of International Studies
c_espinosa1 at u.pacific.edu
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