<div dir="ltr">Paul: <br><br>I am no longer familiar with CDM rules and don't know how they are going to change, though it is sure that they will change. <br><br>I will limit my reaction to your "Question: Is it a subsidy if the person pays in the form of signing away his or her rights to the carbon credits that will be earned by the use of the stove? Or is it a form of "micro-finance" with repayment handled by the dealer in the carbon credits? And if the monetary return to the CC dealer is greater than the initial value of the stove, is that not basically equivalent to the charging of interest on a micro-finance loan?"<br><br>A very good question but from a public finance perspective (which doesn't apply here), it doesn't matter what you call it. There are all kinds of methodological jugglery to compute "equivalent subsidies"; that is a whole another level of discussion. In short, "concessional finance" matters. There are no hard and fast rules about social venture capital (private). From public finance perspective, yes, efficacy, administration cost, likely leakage, etc. need to be analyzed before committing large amounts of money. <br><div><br></div><div>My take on CDM, C-Dev - the "official" entities for public funds - is that what they are doing is a "barrier removal" activity. Once a product is validated in some way, and is found usable, external financing for it helps remove the barriers to commercialization (in this way or any of other ways known under GEF projects where this term "barrier removal" originated some 25 years ago).<br><br>For a systematic national-level program of "barrier removal", a lot of technical work is required to characterize the markets, industry structure, alternatives in technologies and funding mechanisms. <br><br>This is precisely what GACC could have done but it went on the track of IWA/ISO "international standards", leaving aside ground realities. That faith in EPA approach needs to be subjected to scrutiny, but in parallel, GACC could build on the consulting reports it got around 2013-14 on selected countries via its consultants. They could be used as the springboard for real preparation so as to make entities like yours "bankable", "marketable". <br><br>This still leaves open the question of "pre-design" research. What you did with your own funds is not a viable model for developing 100 supply chains in 100 different contexts. <br><br>Which amounts to saying "viability and sustainability of the entire supply chain - from innovation and design to home economics - is at issue, not just one or 50,000 stoves." That's where public (or private charity funds) can help. I have written something about it; can discuss it later. <br><br>Nikhil<br><br>PS: To me, the aid industry academics' interest in viability, sustainability of enterprises getting subsidies is utterly beside the point. Someone told me a few years ago, "More than a half of new companies close within a year". Starting and closing companies, M&A, bankruptcies, are all part of real business life, which academics (pardon me, you are one yourself but you don't have theories of subsidies) don't seem to take into account. </div><div class="gmail_extra"><div><div class="gmail_signature"><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><font face="georgia, serif"> <br></font><br></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
<br><div class="gmail_quote">On Tue, Dec 5, 2017 at 11:10 AM, Paul Anderson <span dir="ltr"><<a href="mailto:psanders@ilstu.edu" target="_blank">psanders@ilstu.edu</a>></span> wrote:<br><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex">
<div bgcolor="#FFFFFF">
Crispins. see below. (of interest to some on the
Biochar Listserv)<span class="gmail-"><br>
<pre class="gmail-m_8909598418491533884moz-signature" cols="72">Doc / Dr TLUD / Prof. Paul S. Anderson, PhD
Email: <a class="gmail-m_8909598418491533884moz-txt-link-abbreviated" href="mailto:psanders@ilstu.edu" target="_blank">psanders@ilstu.edu</a>
Skype: paultlud Phone: <a href="tel:(309)%20452-7072" value="+13094527072" target="_blank">+1-309-452-7072</a>
Website: <a class="gmail-m_8909598418491533884moz-txt-link-abbreviated" href="http://www.drtlud.com" target="_blank">www.drtlud.com</a></pre>
</span><span class="gmail-"><div class="gmail-m_8909598418491533884moz-cite-prefix">On 12/5/2017 1:39 AM, Crispin
Pemberton-Pigott wrote:<br>
</div>
<blockquote type="cite">
<div class="gmail-m_8909598418491533884WordSection1">
<p class="gmail-MsoNormal"><span style="color:windowtext">Dear
Paul<u></u><u></u></span></p>
<p class="gmail-MsoNormal"><span style="color:windowtext"><u></u> <u></u></span></p>
<p class="gmail-MsoNormal"><span style="color:windowtext">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).</span></p>
</div>
</blockquote></span>
"Someone" misinformed you. <br>
<br>
I am not all-knowng about carbon credits (CC), so we can work
together to get full answers. First, we note that CDM (Clean
Development Mechanism) is not the same designation as CER (Certified
Emission Reduction) and VER (Voluntary Emission Reduction). There
are stove projects with CC in the form authorized by Gold Standard
Foundation (GS) for voluntary credits (VERs). I do not know if
there are other stove projects for which the CC is registered /
verified as CER via the UNFCCC which is the only entity that can
give the CER designation. Gold Standard can provide either VER and
CER forms of CDM. The TLUD stove project in West Bengal is with GS
CER status.<br>
<br>
So I am sending a copy of this message to Olivier Lefebvre who works
in this field of stoves and carbon credits. And maybe my India
contacts will inform me further.<span class="gmail-"><br>
<blockquote type="cite">
<div class="gmail-m_8909598418491533884WordSection1">
<p class="gmail-MsoNormal"><span style="color:windowtext"><u></u><u></u></span></p>
<p class="gmail-MsoNormal"><span style="color:windowtext"><u></u> <u></u></span></p>
<p class="gmail-MsoNormal"><span style="color:windowtext">Anyway:<u></u><u></u></span></p>
<p class="gmail-MsoNormal"><span style="color:windowtext"><u></u> <u></u></span></p>
<p class="gmail-MsoNormal"><b><span style="color:windowtext" lang="EN-US">></span></b>I repeat: NOT subsidized.<br>
<span style="color:windowtext">>…</span>if you are willing
to help, including to help test the website regarding
donations or the purchase GS CER fully certified carbon
credits. )<br>
<br>
<span style="color:windowtext"><u></u><u></u></span></p>
<p class="gmail-MsoNormal"><span style="color:windowtext">It is a
donation. There are beneficiaries.
<i>Something</i> is subsidized. I want to know where the CDM
money goes. I do not care
<i>where</i> it goes , I just want to see the whole
financial picture. </span></p>
</div>
</blockquote></span>
The donations that go through the NFP that I have established are
for sponsoring a Champion TLUD woodgas stove in West Bengal, so it
subsidizes those stoves for appropriately low-income families. (We
are just getting started. Apart from my own money, there are now
two donations that total $90 form persons who have been willing to
help us test the processing of donations. We will also need to
test for the funds to acquire TLUD-based GS CER carbon credits. We
only deal with TLUD-generated carbon credits. (write to me off
line if willing to assist.) )<br>
<br>
The donations do not subsidize the char collection business.<br>
<br>
Note: The major TLUD stove projects in West Bengal are managed by
the Germany-based entity called atmosfair You can see their
information at <a class="gmail-m_8909598418491533884moz-txt-link-freetext" href="https://www.atmosfair.de/en/home" target="_blank">https://www.atmosfair.de/en/<wbr>home</a> There you
can purchase carbon credits to offset airline travel. <br>
<br>
The specific info about the TLUD projects in India are at:<br>
<a class="gmail-m_8909598418491533884moz-txt-link-freetext" href="https://www.atmosfair.de/en/energieeffizienz/indien_holzvergaserofen_cdm" target="_blank">https://www.atmosfair.de/en/<wbr>energieeffizienz/indien_<wbr>holzvergaserofen_cdm</a><br>
<br>
atmosfair uses it funding to get the stoves from the factories (as
explained in the Deganga report). So those stoves are subsidized
for the households. But the money is recovered via the sales of
carbon credits during 7 years.<br>
<br>
Question: Is it a subsidy if the person pays in the form of
signing away his or her rights to the carbon credits that will be
earned by the use of the stove? Or is it a form of
"micro-finance" with repayment handled by the dealer in the carbon
credits? And if the monetary return to the CC dealer is greater
than the initial value of the stove, is that not basically
equivalent to the charging of interest on a micro-finance loan? <br>
<br>
<blockquote type="cite">
<div class="gmail-m_8909598418491533884WordSection1">
<p class="gmail-MsoNormal"><span style="color:windowtext"><u></u><u></u></span></p>
<p class="gmail-MsoNormal"><span style="color:windowtext"><u></u> </span><span style="color:windowtext">This will
inform my first question which is: can the [char purchase]
project continue if this money source [of carbon credit
sales] is cut off. </span></p>
</div>
</blockquote>
Answer: Yes.<span class="gmail-"><br>
<br>
<blockquote type="cite">
<div class="gmail-m_8909598418491533884WordSection1">
<p class="gmail-MsoNormal"><span style="color:windowtext">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.
</span></p>
</div>
</blockquote></span>
You either misunderstood Sujatha or she was incorrect.<span class="gmail-"><br><blockquote type="cite">
<div class="gmail-m_8909598418491533884WordSection1">
<p class="gmail-MsoNormal"><span style="color:windowtext"><u></u><u></u></span></p>
<p class="gmail-MsoNormal"><span style="color:windowtext">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.
</span></p>
</div>
</blockquote></span>
It is viable. <span class="gmail-"><span style="color:windowtext"> </span><blockquote type="cite"><div class="gmail-m_8909598418491533884WordSection1">
<p class="gmail-MsoNormal"><span style="color:windowtext">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.</span></p>
</div>
</blockquote></span>
There are two separate business operations. We are discussing the
CHAR PURCHASE business, not the overall stove project.<span class="gmail-"><br><blockquote type="cite">
<div class="gmail-m_8909598418491533884WordSection1">
<p class="gmail-MsoNormal"><span style="color:windowtext"><u></u><u></u></span></p>
<p class="gmail-MsoNormal"><span style="color:windowtext">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?</span></p>
</div>
</blockquote></span>
I addressed that in my previous message. The risk is a weakness of
operational management if the CC business stops, and I said there
seems to be sufficient mid-level management to hold the char
purchase business together.<span class="gmail-"><br><blockquote type="cite">
<div class="gmail-m_8909598418491533884WordSection1">
<p class="gmail-MsoNormal"><span style="color:windowtext"><u></u><u></u></span></p>
<p class="gmail-MsoNormal"><span style="color:windowtext">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. </span></p>
</div>
</blockquote></span>
Almost right. It would be good to have a well layed out business
plan. But the plan is not as polished as the Western world might
like it to be. Personally, I am glad that things are functional and
participants know their roles and do them. To have a great business
plan (formal sense) would require talent and money. Volunteers are
welcome to do the business plan task.<span class="gmail-"><br>
<blockquote type="cite">
<div class="gmail-m_8909598418491533884WordSection1">
<p class="gmail-MsoNormal"><span style="color:windowtext">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.
</span></p>
</div>
</blockquote></span>
Repeat: The char purchase program has no subsidy whatsoever and
employes about 100 people in the Deganga area alone.<br>
<br>
And I repeat my comment from above: <b><i>Is it a subsidy if the
person pays in the form of signing away his or her rights to the
carbon credits that will be earned by the use of the stove?
Or is it a form of "micro-finance" with repayment handled by the
dealer in the carbon credits? And if the monetary return to
the CC dealer is greater than the initial value of the stove, is
that not basically equivalent to the charging of interest on a
micro-finance loan? <br>
</i></b><br>
Are we discussing something that is a truly different approach to
the financing of large numbers of cookstoves? It seems to be
working well with the TLUD stoves that are earning 4 carbon credits
per year of verified usage.<br>
<br>
All comments and assistance will be gratefully accepted.<span class="gmail-HOEnZb"><font color="#888888"><br>
<br>
Paul <br></font></span><span class="gmail-">
<blockquote type="cite">
<div class="gmail-m_8909598418491533884WordSection1">
<p class="gmail-MsoNormal"><span><u></u> <u></u></span>
</p>
<p class="gmail-MsoNormal"><span style="color:windowtext">Regards<u></u><u></u></span></p>
<p class="gmail-MsoNormal"><span style="color:windowtext">Crispin<u></u><u></u></span></p>
<p class="gmail-MsoNormal"><span style="color:windowtext"><u></u> <u> </u></span></p></div></blockquote>
</span></div>
<br>
<br></blockquote></div><br></div></div>