[Stoves] No subsidies in TLUD char production

Crispin Pemberton-Pigott crispinpigott at outlook.com
Tue Dec 5 01:39:35 CST 2017


Dear Nikhil

>What is your problem with subsidy?
I didn’t say I have a problem with subsidies, I said already today I am happy with subsidies, but I want to know what and where they are applied. The project started by Sujatha is subsidised by CDM money which was generated on the basis that the charcoal was to be used by a foundry as a substitute for coal, and this was certified. The idea is that biomass is renewable and coal is not.
>That one person pays partly the cost for another?
People can pay for what they like. It is however false to claim that something is ‘financially self-sustaining’ when there is a tax on something else to make it appear so. An example of a subsidy applied that was visible, and one that was made (and kept) invisible is the UB stove programme. The visible subsidy was selling to the public stoves at an 85-92% discount. The invisible subsidy was the bank that ran the demonstration centres and vending offices. The project did not pay the (relatively modest) cost of that and they did not receive any of the money from the project or the stove sales. The volunteered to perform this task, neighbourhood by neighbourhood for several years.
The subsidy was not in the form of a ‘corporate sponsorship’. Not at all! They signed a deal with a carbon trader and sold he CO2 offsets established for the stoves (typically fuel consumption reduced by 20% out of the 40% reduction available because people heated the homes more). That CO2 offset money was based on the number of stoves sold, the carbon in the fuel not burned, the verified reduction in consumption and the prevailing contract price of the CO2. They kept that money. The amount involved is very large (million$). It was not given to the project nor the people who used the stoves.
Without that deal the project was unable to be implemented as the donors paying for the stoves were not interested (apparently) in paying for the selling and distribution, verification of installations, training and associated costs of verification. The subsidy originated in the carbon markets of Europe and was paid to the bank. Everything happened on a willing seller, willing buyer basis, but it is not correct to say there was no subsidy involved. Were it not for that subsidy, the selling cost would have to have been high enough to pay for the cost of marketing.
>What theory of moral behavior are you assuming?
I assume that if we want to replicate a project we should know the social, financial and environmental costs and benefits involved.
>Why care if there are subsidies?
If there is nothing to subsidise with we should not embark on a project that requires subsidies to succeed.
>You have a mythical faith in "business case"
I have faith in business cases. Without some sensible plan to achieve goals, we would be operating randomly.
>In some cases, an applicant for subsidy may argue a business case based on his/her assumptions and all that is needed is that you or some committee of experts reviews and agrees. That can easily degenerate into groupthink.
Of course. Groupthink is a risk.
>Even bankers and investment bankers are trapped by the notion that they can do "due diligence" on every investment or a loan.
That is apparently better than not doing so. In Canada the government recently introduced a compulsory ‘stress test’ for mortgage applicants. That is a sort of pre-emptive due diligence.
>It is very, very difficult to spend public money right.

I think we can make a pretty good case that there is public benefit from spending public money on the development of highly improved stoves.
>There is a lot of babble over the last 30-odd years - 25 years since the GEF and before that various small funds for business assistance for all kinds of "renewable energy" junkets - but real business success - where local commercial debt is captured - is rare. Extremely rare.
And made rarer when the method of predicting ‘benefit’ in the form of reduced fuel consumption leading to a financeable reduction if CO2 emissions is the arbitrary test called the WBT – the current default method for CDM projects.
>But that is what the real life is; public expenditure projects muddle the market instead of strengthening it.
The massive subsidy of imported stoves to Ulaanbaatar drove about 30 local stove manufacturers out of business. I was not in favour of that model and lost the argument. Now, 6 years later, we are starting to localise the production of such stoves as a conscious act. If that had continued for 2 or 3 years it would already have been successful. We win some, we lose some, we delay some.
>All you want is more public expenditures to solve a problem, right?
Nope. I want to upgrade the skill set of producers to make better products in better ways. It was done continuously ‘one the side’ but not as part of the project until now.
>Let me remind you of Gerry Leach's questions very nearly 20 years to the day: What is the problem? Whose problem is it? How do you know such to be the case? What have they done about it? How do you know solutions you proffer would solve their problem?

>And you raised one recently - "Who made it your problem?" (I ask myself that all the time.)
I took the latter from you. It is a brilliant question. The other are good. The world is full in Mr and Mrs Buttinsky demanding to be allowed to solve problems no one gave them nor asked them to address.

>I posit that without a service standard and a rational public policy objective, both specific to a particular context (SDGs be damned). are needed to even begin to answer these questions.

I saw a really good comment last night on a blog: “The problem is that much of science lack a proper customer, scientists can do pretty much as they please, safe in the knowledge that funders are not going to check their output, besides counting papers and citations.”
– “Climarecon”

I see a generic problem with stoves which is they are offering solutions to problems not raised or which are a low priority for the customer they have in mind. Iterative stove design in the field as done by Practical Action has its merits, but I find their stove solutions couched in the same frame of reference as the problem stoves. No big breakthroughs yet. I like the TLUD’s that cook well and the FSP (kerosene) stove from South Africa, and the crossdraft coal gasifiers. All of these are giant leaps forward and would not have emerged from ‘the community’ unless the intermediaries were highly skilled.

>I used to scratch my head and pick arguments with those "science policy" types about why the so-called "cooking" problem couldn't be solved with targeted applied research.

Cecil’s complaint is that anthropologists are never brought in to help define the problem, identify solutions and generally avoid idiotic oversights. He says they are the project coroners – brought in after it has collapsed and asked to identify the reasons why it failed. The reason for failure are usually pretty obvious and related to the disconnected between the dreamers and the doers.

Regards
Crispin

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