[Stoves] Business sickness (Lange via Anderson, 3 July)

[Traveller]

This is Nikhil Desai, with a delayed response. I wanted to rename this
thread as "Subsidies", reflecting the specific issues raised by Lange and
Pemberton-Pigott, but am keeping the same name for now. Another post
separately. If any response on subsidies comes along, we should put these
in the new thread.
------

I am excited to hear from Lange, "each home improved costs about $100."
It's not clear to me if this is the entire cost including overheads or the
portion absorbed by Lange’s group (the rest by the customer). Either way,
this is about the level of minimum capital expenditure for “basic energy”
for poor households who do not have grid or LPG access.

It is also gratifying to learn that Lange’s group has combined both
lighting and cooking  interventions.  With biomass stoves, presumably the
ongoing expense on woodfuel or battery/bulb change is minor. If the solar
products and stoves last five years, presumably the gains in “quality of
life” improve productivity and raise the willingness to pay for
replacement.

More importantly, he uses “improved homes”, not “improved stoves”, a rather
overused and abused term just like GACC’s “clean cookstoves”. There is much
more to cooking than “clean”, and shelter design, family composition,
alternative uses of time, all affect cooking and lighting. The basic
rationale for technological advancements in cooking and electricity
(battery or grid) is for “improved homes,” broadly envisaged by the
customers themselves, and the corresponding indirect effect on human
productivities. With transition to modern energy use, whether or not from
“renewables”, people rise from poverty over the course of a generation. And
pay taxes or do charity for the remaining poor.

Depending on what governments can afford, people aspire to, and local
market conditions, a $100/household/year energy subsidy to qualified
customers for qualified products is worth considering.  I drafted a
proposal along these lines for India a few years ago.

I suggest not taking GACC statements on "market" seriously. We know next to
nothing about poor people's fuel and electricity markets. Why, there was a
startling story in the Times of India a couple of days ago that rural
inflation is led by increase in the prices of dungcakes, fuelwood and
chips. So much for the “free biomass” fiction. Maybe the inflation is
temporary, because of unusual weather patterns or climate change. Or maybe
now customers will choose “more efficient biomass stoves”. Or the
government here will be further pushed to accelerate distribution of
subsidized LPG.

---------------

I also agree with Lange – the talk of “"creating dependence" or
"undermining sustainability" is nonsense masquerading as economic smarts.
Governments are in the business of raising and spending money; whether some
of it takes the form of “subsidies” is a matter of political choice.

"Subsidies for the rich, market fundamentalism for the poor" is a common
perversity of presumptuous - or presumptive - economists. I can understand
the resistance to creating dependency syndrome or concern about
sustainability without subsidies. After all, spending other people's money
entails fiduciary responsibility and ethical consideration weigh in on the
most effective application of personal charity.

There are many ways to subsidize - what, how much, when, why. With biomass
stoves, the sheer diversity, uncertain metrics, and unpredictable demands
and cost structures for cooking (i.e., fuels) make it difficult to specify
subsidy assigned to a stove. On the other hand, stove-makers or sellers can
be subsidized, and if it is feasible to subsidize special processed biomass
fuels, that should also be considered. Such stove/fuel subsidies may not
help the poorest directly, but other support mechanisms can be considered.

If GACC by "market based" means ruling out subsidies altogether, there are
two ways of interpreting that stand:

a) GACC has no standing in energy policy and public budgeting discussions;
it is understandably modest in not advocating subsidies and is staying out
of the kitchen, so to speak (as it should).

b) GACC is hypocritical, since it survives on public and charity money in
the first place. (These are not subsidies, just payment for services, as
with the research establishment that has taken a lion's share of US support
to "clean cooking.")  Rich experts living on public funds in the name of
the world's poor should be accountable for something.

Nikhil




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(India +91) 909 995 2080
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Date: Sun, 3 Jul 2016 13:51:04 -0500
From: Paul Anderson <psanders at ilstu.edu>
To: Stoves and biofuels network <Stoves at lists.bioenergylists.org>,
        "biochar at yahoogroups.com" <biochar at yahoogroups.com>
Subject: [Stoves] Fwd: business sickness
Message-ID: <0ddf2a16-23e6-5245-1fa8-3c5164c2b7f2 at ilstu.edu>
Content-Type: text/plain; charset="utf-8"; Format="flowed"

Subject:        business sickness
Date:   Sun, 03 Jul 2016 09:27:07 -0400
From:   >Lange <rbtvl at aol.com
To:     psanders at ilstu.eduMessage:

No, you are not wrong about business sickness.

powerful institutions and governments are quick to subsidize corporations
with loan guarantees, tax breaks, initial investments that need not be
repaid etc.

  but if you want to help consumers with a subsidy you are "creating
dependence" or "undermining sustainability".   such nonsense.

we have a wonderful stove.  we have 100% sustained adoption. we have 250
women doing stove installations.   I am trying to re-design to get
production cost down.   now.....$45 for the full stove and another $15 to
the women who install it.   too much for poor Maasai women to pay.  so we
help them and charge  them less.  we also do solar electrical work and help
women start businesses so we are not just stove people.   and with
overheads, each home improved costs about $100.

please see

www.internationalcollaborative.org

I sat with Radha of the Global Alliance a few years ago and said.

"a billions women can't afford the stove they need.
we have three choices.
we can leave them out
we can sell them a stove they can afford that they will abandon
we can subsidize their purchase.

we choose to subsicize their purchase."



 she said essentially that the Global alliance had to establish itself as
"market based" and then maybe we can talk later.

our organization in the US and Tanzania might finally, after six years, get
the government to work with us.   they love what we do.  but getting them
to help fund is not so easy.

but we try. and maybe will succeed

bob lange      508 735 9176
the Maasai Stoves and Solar Project.
the ICSEE

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(India +91) 909 995 2080
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