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</o:shapelayout></xml><![endif]--></head><body bgcolor=white lang=EN-CA link=blue vlink=purple><div class=WordSection1><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>Dear Kevin<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>I have been tracking the evolution of the carbon trading for stoves/development projects for a long time as you know. It is pretty much a given in the corral of carbon cowboys that the writing is on the wall with respect to the future of the carbon market.<o:p></o:p></span></p><div><p class=MsoNormal><b><span lang=EN-US style='font-size:10.0pt;font-family:"Tahoma","sans-serif";color:#1F497D'><o:p> </o:p></span></b></p><p class=MsoNormal><b><span lang=EN-US style='font-size:11.0pt;font-family:"Tahoma","sans-serif";color:#1F497D'>>….</span></b><span style='font-size:11.0pt;font-family:"Arial","sans-serif"'>Unless you can get a "rock solid confirmation" that Carbon Credits will be available for your possible stove systems, any stove project depending on Carbon Credits for success is in danger of failure.</span><span style='font-size:11.0pt;font-family:"Tahoma","sans-serif"'><o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>There is something that evolved in South Africa in the 80’s which was ‘corporate social responsibility programmes’. This means ‘giving back’ to the community and all that. The idea was that a % of turnover or profit would be devoted to social development and economic stimulation at the BOP (Bottom of the Pyramid though the term had not yet been coined). It was greeted with enthusiasm.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>The evolution of the AGW scare from Global Warming into Climate Change into Climate Disruption (we are all guilty of it … yatta yatta) is making a transition from buying carbon offsets into a global form of corporate responsibility (CSR) programme. Checking this out with one of the largest carbon trading organisations, I received an immediate reply that ‘they were aware of the problem’ and had already begun lining up corporate buyers of ‘offsets’ who were willing to swap to CSR programmes immediately. The gist was ‘carry on, we have backing for you, and we will continue trading in this’. Basically as fund-raisers, I guess. The fund is still deep, but it will not be based on CO2 or GHG reduction, just ‘development’.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>This has large implications for stove projects. How to market them? How to cover setup and development costs? Overhead for training producers? There are already health implications which are ‘marketed’ as much as possible, requiring ‘offsets’ of human health damage caused by the fuel or stoves. The argument is often structured as follows: There people burn these fuels because they are poor and ignorant. We should compensate them for their lot by giving them a cleaner way to burn the fuels they have access to, while we work on developing their wealth creation skills and education of their children. When the children grow they won’t do such things because things will be better by then.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'> <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>The demonization of paraffin and coal are activities informed by this argument: ‘people need to move up the energy ladder’ and get away from dirty fuels’. That is not to say anything about the fossil fuel angle, it has to do with perceptions of the ‘dirtiness’ of the fuel, often promoted by people selling ‘clean fuels’.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>There is a certain merit in parts of the health argument or any aspect of sensible upliftment of deprived or dysfunctional communities: the elimination of extremes of wealth and poverty, or energy poverty, for example. So the evolution I am expecting is that the carbon thing will fall away for several reasons and the ‘need for donations’ will continue so we need viable and reliable mechanisms.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>It will be interesting if after this evolution there is a net increase in donorship. The idea of directly assisting projects that uplift communities is catching on at all levels. The in-between people will develop the market, so to speak, out of a need for self-preservation, but the companies will start handling more direct funding when they become more comfortable doing so and the trading commissions and profits from speculation in futures will wane.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>The emergence of the Social Capital Market (SoCap) is an interesting parallel development that funds projects with a triple bottom line. I participated in one of the SoCap events in San Francisco as a guest of UNDP, making a presentation on 25 years as owner of a SoCap company. There was about $7 billion on the table for sustainable projects – stoves or anything else that could be shown to deliver simultaneously on the environmental, social and economic front. That is the triple ‘profit’ they want to see.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>The two initiatives may eventually find common ground in the form of ‘sustainable development with a triple bottom line’. Something to watch for is the evolution of the term ‘sustainable’ away from negative CO2 emissions to the more middle of the road ‘green’ concept of doing no harm and providing long term benefit. ‘harm’ does not only mean to the green environment but to the social fabric and local economy.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>It is clear from just the past few posts here that there are significant negative consequences to fanaticism and this applies to all forms of it. There is an interesting book on fundamentalism called “Asking Questions”. The author Bahiyyih Nakhjavani defines fundamentalism as “…any thought which plods blindfold around the treadmill of its own unquestioning assumptions.” It involves moral coercion and intimidation and is replete with appeals to authority. That is the perfect characterisation of many energy things but we can leave that discussion for another time.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>The big question is what will happen to stove project funding in the immediate and near future (to 2020, for example).<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>The emerging trend is to support projects that deliver benefit to the dispossessed, marginalized, oppressed, deprived and in any way poor. Impoverishment has many faces. Fuel purchasing from a shrinking resource is a powerful argument in favour of improved stoves. Indoor air quality is obviously a no-brainer. It <i>has</i> to be interesting to observe that in Ulaanbaatar, with the most polluted air of any capital city, the air inside the low income homes where the stoves are is much better than the outdoor air where the chimneys vent. They used to have open fires indoors, not everyone, literally, has a chimney. The only problem left is swapping the stoves for cleaner burning ones, which is in process right now (more than ½ done).<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>The stove community above all needs two things more than money: better products (most of them are immature) and better ways of telling us how they perform in absolute and relative terms. Where a subsidy is involved, it is more likely in future to be attached to product development and proofs of concept that based on long term ‘emissions trading’. In the latter case you sit back and extract revenue from the continued sale of a fuel-saving stove which is a pretty hard sell, morally, to the SoCap market, even if they engage in trading carbon certificates. It is likely the transition to SoCap funding will be fastest in the voluntary carbon market because they are the ones doing it ‘voluntarily’ rather than by legislation or fiat. Their hearts are already in the right place; they just need a new and more sustainable mechanism. A more efficient delivery of results per $ would be nice. <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>Regards<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>Crispin <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><i><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>Strive “…to refute what is vain and false, to establish the truth…”<o:p></o:p></span></i></p></div></div></body></html>