Our friends at GVEP, the Global Village Energy Partnership, have published an extensive series of papers, edited by Allesandra Moscadelli, that explore why adoption of Improved Cookstoves, with so many benefits - lower fuel use = lower cost, less smoke inhalation, lower emissions, lessened deforestation - have been slow to catch on.

To read the whole paper, you'll need to sign on to their site, or click here.

USAID MicroLinks Note from the Field

Honduras: Blending Finance, Technology, and Training to Encourage Responsible Growth

La Mosquitia, one of the last remaining tropical forest areas left in Central America, is the most impoverished region in Honduras. Local communities, including the indigenous Miskito (or Mosquitia) people, have struggled to keep alive their distinctive cultural heritage while dealing with the threats of environmental and economic uncertainty.

Through a carbon-neutral biofuel initiative,  the MOPAWI (from Mosquitia Pawisa) seek to generate equitable social development through sustainable microenterprise  utilizing palm oil  that is used for a variety of purposes.   This approach will provide financial, social, and environmental returns in order to:

• Increase local employment while decreasing out-migration;
• Lower the cost of production and with lower agricultural labor;
• Reduce waste and increase product yield; and,
• Decrease emissions and deforestation.

“The beauty of this enterprise,” says David Hircock, Senior Advisor for Estée Lauder, “is the multidimensional, entrepreneurial approach. Many elements of this approach can bring much-needed cash into the economy and also negate the need for cash. For example, the indigenous community may not need to purchase diesel. Additionally, the enterprise incorporates important elements affecting local security issues, such as food, water, land and economics. Perhaps most importantly, this enterprise could show that the Mosquitia people are integral to the sustainable development of the area and local economy of Puerto Lempira, whereas at the moment they are so often marginalized. Now they can have a much-needed voice.”

San Fransisco Environmental Justice Program

Environmental justice is the fair treatment and meaningful involvement of all people, regardless of race, ethnicity, income, or education level, in environmental decision-making. Working closely with residents and businesses to make sure that the basic necessities of life-water, air, food, and shelter-are of the highest quality, the city's Environmental Justice (EJ) program has committed itself to providing fundamental rights to a safe and healthy environment in every San Francisco community. The program collaborates with other city agencies, nonprofit organizations, and community groups to promote the issues of air quality, food availability, renewable energy systems, sustainable land use, and the reduction of greenhouse gases.

Solar Public Housing in San Francisco

Mayor Gavin Newsom announced plans to install over 365 kw of solar panels on two San Francisco Housing Authority properties.  The solar panels will provide hundreds of thousands of kilowatts of clean, renewable electricity to public housing residents.   "With initiatives like GoSolarSF, San Francisco is lighting the way with solar power," said Mayor Newsom.  "Solar power will reduce greenhouse gases, grow our green economy, and lead the state towards a future of clean, renewable energy."

Check out the SF Interactive Solar Map

Donors and investors can build capacity for green microfinance by providing necessary technical assistance and by supporting environmentally sustainable microfinance projects. For example, the Netherlands Development Finance Company (FMO) has developed evaluation criteria and tools to help MFI's assess and manage the social and environmental impacts and risks of microenterprises. CIDA has also produced an Environmental Sourcebook for MFIs. IFC, Triodos, Calvert, Shell Foundation, and EBRD are among other donors who are including the environmental bottom line on their agenda.

In this article, we explore some of the eco-microfinance initiatives promoted today, such as:

• Green microenterprises
• Renewable energy entrepreneurship
• Carbon credit aggregation

Green microenterprises

Eco-friendly microenterprises can provide sustainable sources of income to microfinance clients, including the production of organic fertilizers and biomass charcoal briquettes, clean energy cookstove fabrication, and handicrafts made from sustainably sourced materials. Various industry standards, from groups like the Forest Stewardship Council, provide guidelines on “sustainable sourcing.”

MFIs that deal with agricultural clients can seek partners that will help clients adapt to evolving conditions through the adoption of environmentally-friendly farming techniques. Organizations, such as Sustainable Harvest International, help by providing key technical support. Subsidy can also play a positive role as clients shift their approach to a more eco-friendly standard.

Engaging in environmentally sound business practices can:

• Help microentrepreneurs preserve and protect their long-term income
• Protect the health of communities
• Lower overhead for microenterprises
• Enable MFIs to invest in a growing market that meshes well with the agendas of triple-bottom line investors.

Renewable energy entrepreneurship

Microfinance clients often use fossil fuels like natural gas and petroleum as sources of energy. These fuel sources contribute to the greenhouse gas problem, the degradation of local ecosystems, and cause health problems. Implementing renewable energy systems, like solar, wind, and biogas can offer great cost savings, as well as health benefits. MFIs offering personal consumption “energy loans” can help microfinance clients leverage these resources for their homes and businesses.

Renewable energy can also be a source of income for a new class of business – renewable energy microenterprises. Social and environmental entrepreneurs from the industrialized world are helping to create this microentrepreneurship opportunity. For example, Barefoot Power is a socially-conscious business that employs microentrepreneurs to distribute solar-powered products and systems in the developing world.

Grameen Shakti is a nonprofit with the mission of eliminating energy poverty with renewable-energy entrepreneurs. They support programs in solar energy, biogas, and improved cookstoves, which include training and capacity building for entrepreneurs who promote the systems, as well as financial products tailored for renewable energy uptake. In the micro-utility model, one entrepreneur will install a solar system and sell power to those in the community who cannot yet afford to invest in their own.

Carbon credit aggregation

Carbon credit aggregators, like MicroEnergy Credits and E + Co, work with MFIs that provide renewable energy loans to clients. Each loan can be translated into a small carbon credit. Though these credits are too small to be traded on the multi-million or billion dollar carbon markets created by the Kyoto Protocol, aggregators bundle these credits and then sell them on the voluntary carbon market to net polluters. Carbon credit aggregation offers:

• Financial rewards for MFIs that provide energy loans, creating an incentive to continue greening products
• A better standard of living, and more control over energy resources, for clients who switch to renewable sources of energy for their homes or businesses
• Business opportunities for microentrepreneurs who supply renewable energy services or systems

Conclusion

The conventional path of economic development has tied greater prosperity to increased energy consumption, with its corresponding negative environmental impact. This does not have to be the case. MFIs can contribute, along with their clients, to solving the crises we face today. Microfinance clients continue to be impacted by global climate change and environmental degradation, but we are also seeing that they can be part of the way forward.

Congratulations GGAP on a MUST READ!

...for the April 2 Report on Greening Microfinance: Clients and the Climate of Change

With environmental challenges-from drought to flooding-disproportionately affecting poor people's livelihoods, microfinance institutions have a strong incentive to mitigate the risks of climate change while helping their clients adapt to that change, argues Paul Rippey, the author of the latest report from CGAP on microfinance and climate change.

...to Paul Rippey, on the well-written article,  Microfinance and Climate Change: Threats and Opportunities.   Great work, Paul!

"Within microfinance, the word ‘sustainable' has tended to be used in a very narrow way, mainly referring to institutions that are financially viable," says Rippey. "But just as many MFIs have added social performance to their bottom line, they should also consider how their actions-and those of their clients-can help combat climate change."

Thank you, CGAP, for making mention of GMf in the Report and as an Additional Resource on your Feature page.  

Recently the World Economic Forum in Davos released a new study on Green Investing: Towards a Clean Energy Infrastructure.  In the study it states that "two billion people worldwide have no access to modern fuels and 1.6 billion have no access to electricity. In addition, hundreds of millions more live in areas with unreliable grids and experience regular outages disrupting light, water pumps and other essential functions".
GreenMicrofinance was listed in the study as one of eight global organizations "working on innovative ways of using microfinance to provide clean energy in developing countries". (p.21)