[Stoves] No subsidies in TLUD char peoduction

Tue Dec 5 12:42:19 CST 2017

Paul:

Thanks for the clarification. I will have to re-read the organizational
part.

My instinct says that separating the char collection component as a
"corporate" activity - an SME with a balance sheet and accounting processes
- is a good idea.

I have been thinking since last night about Frank's comment "burn the gases
or collect the char" (my wording). The former can be with households, the
latter with an SME where different kinds of financial engineering tools can
be brought to bear.

Back a dozen years ago, I wrote a piece about "health and climate
co-benefits", arguing that it is the non-CO2 species whose reduction should
merit valuation for public support. Little did I realize that the SLCP
argument would be ignored by CDM and that the "health" argument would
degenerate into Gold Standard snake oil of aDALYs.

Financing Geneva, Vienna and Washington, DC and not the poor are
interesting uses of public funds.

Nikhil

On Tue, Dec 5, 2017 at 12:12 PM, Paul Anderson <psanders at ilstu.edu> wrote:

> Nikhil,
>
> One clarification about what you wrote:
>
> I don't think Paul's project is part of the CDM.
>
> We have been discussing TWO aspects or projects in West Bengal.  The Char
> collecition business / project is separate from the CDM financially, but it
> is part of the total CDM project that says the households do not burn the
> char which is instead collected (purchased) and sold to replace charcoal
> that would have been produced by traditional methods.   Part but separate.
>
> The other project is the big one with the TLUD stoves sold into the
> households, with later verifications of stove usgage.   That ic clearly a
> CDM project.
>
> Paul
>
> Doc  /  Dr TLUD  /  Prof. Paul S. Anderson, PhD
> Email:  psanders at ilstu.edu
> Skype:   paultlud    Phone: +1-309-452-7072 <(309)%20452-7072>
> Website:  www.drtlud.com
>
> On 12/5/2017 10:44 AM, Nikhil Desai wrote:
>
> Crispin:
>
> Public expenditures are not all "subsidies".
>
> The word "subsidy" has no precise meaning nor an estimate, except as the
> amount of expenditure. It is a red herring. It is upsetting that physicists
> and engineers want to preach "market solutions" for the poor while enjoying
> fat subsidies themselves.
>
> It's not that I am unaware of the arguments about subsidies or haven't
> been smack in the middle of them. All I can say is that there are dumb
> subsidies and there are smart subsidies. Output-based capital subsidies
> that can be dished out on a competitive basis (roughly) are generally
> smart.
>
> In Rwanda, the finance minister who had approved the budget for the Kigali
> prison biogas project was extremely smart. He saw something worth putting
> his money on and knew how the project can be contracted out with whose
> supervision.
>
> It also saved him money on fuel. (After all, he also had to budget for the
> prison.)
>
> Is that a "subsidy"?
>
> What is your problem with "subsidy"? If you are trying to rationalize a
> research program - inherently difficult to do under ODA projects, except
> via a science and technology grant - that too is a "subsidy" under your
> definition.
>
> I don't think Paul's project is part of the CDM. You don't need to see the
> whole "financial picture" because that too is a myth. One-time financial
> picture means nothing, and a forecast of balance sheets is subject to so
> many assumptions that it is useless to share it in public. Just try to get
> financials for some startup financed by venture capital.
>
> Why do you want to know the whole financial picture? I imagine Paul and
> many others in comparable projects have put in "sweat equity",
> "intellectual capital" whose returns are in the growth of business itself.
>
> Nurturing, developing such businesses -- the implementing partner in
> Deganga who wanted stoves in the first place, plus stove manufacturers and
> designers, testers - is an art. Takes a lot of money and TLC and
> over-burdening them with certification requirements a la CDM and Gold
> Standard is, to me, a waste of resources. Simpler expenditure programs can
> be designed, though governments and donors are short of money, short of
> attention span.
>
> What to subsidize and how, how much, whom to give money, are thorny
> questions. LPG subsidies are relatively easy to design and don't have much
> overhead in seeing that money flows. It used to be that fixing the price
> was the way an implicit cross-subsidy was forced on Indian oil companies.
> Now the money goes for the most part to households. There are arguments for
> and against such form and levels of subsidies, and subsidy dependence is a
> serious problem, as with  food and fertilizer subsidies.
>
> Just how the stoves are run is a question of consumer behavior and choice.
> If the $40 is adequate to install and start using the stove, that is good
> enough, though there should have been field testing for usability, safety,
> durability.
>
> So long as once installed, users continue to profit from it, including via
> charcoal sales, and buy a replacement or a supplemental one (say, dedicated
> to commercial cooking and charring), that is proof enough of success and
> sustainability to me. Next time around, another area, another technology,
> another kind of  "external" money.
>
> Your second question is about performance risk. Some performance risks
> ought to be avoidable by field testing and monitoring; some others - e.g.,
> "stacking" - are not really anybody's bother. CDM has made a weird rule
> about destroying the old stove; just guarantees that wrong products may be
> chosen and consumer value is ignored.
>
> Who is this "we" in "We are not allowed to take unconscionable risks and
> risks have to have a mitigation plan" and where? Everything, I repeat, is
> contextual. The $142 million raised at Clean Cooking Summit went to
> somebody somehow, no? What did the donors want and how was it delivered?
>
> Without a good product that meets the desired service standard, no amount
> of subsidy is going to do anything in the long term. From that finance
> minister's perspective, the question was, "I can commit to continuing
> expenditures for ten years if spending the money guarantees that biogas,
> stoves, micro-hydro can keep expanding and improve the living conditions
> and generate employment." (Not exactly his words, but you get the idea.
> There are many ways to skin the cat.)
>
> Nikhil
>
>
>
>
>
> On Tue, Dec 5, 2017 at 2:39 AM, Crispin Pemberton-Pigott <
> crispinpigott at outlook.com> wrote:
>
>> Dear Paul
>>
>>
>>
>> There is nothing controversial or toxic about this question. You have a
>> stove project that has a CDM component – apparently the first CDM project
>> approved for stoves – someone said (which I found an amazing claim).
>>
>>
>>
>> Anyway:
>>
>>
>>
>> *>*I repeat:  NOT subsidized.
>> >…if you are willing to help, including to help test the website
>> regarding donations or the purchase GS CER fully certified carbon credits.
>> )
>>
>> It is a donation. There are beneficiaries. *Something* is subsidized. I
>> want to know where the CDM money goes. I do not care *where* it goes , I
>> just want to see the whole financial picture.
>>
>>
>>
>> This will inform my first question which is: can the project continue if
>> this money source is cut off. I was not thinking of your request for $40
>> per stove, I was thinking of the CDM money which according to Sujatha, was
>> necessary to buy the char at a viable price and sell it to the foundry.
>>
>>
>>
>> If the value as a coal replacement is adequate to cover the cost of
>> collection and delivery, then it is viable without the CDM money. If it is
>> needed, then it is not.
>>
>>
>>
>> Is this clear? There is external money flowing into the project. I
>> expressed no opinion about whether or not it was good or bad. The question
>> is whether or not it can continue indefinitely without that money.
>>
>>
>>
>> If it can, the next assessment of risk is what change might take place
>> and how that would affect the viability. If the change wrought indeed made
>> it unviable financially, what steps can be take to mitigate the risk?
>>
>>
>>
>> This is normal due diligence. We are not allowed to take unconscionable
>> risks and risks have to have a mitigation plan. Stove char is a business
>> and needs a business plan. If it depends on a subsidy, say so, and let us
>> know that it is an essential element, and we will prepare for it. We will
>> justify it to governments or donors if we can.
>>
>>
>>
>> Regards
>>
>> Crispin
>>
>>
>>
>
>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.bioenergylists.org/pipermail/stoves_lists.bioenergylists.org/attachments/20171205/67229041/attachment.html>