Concern for the Poor Spurs
Research into Carbon Markets

By Dylan Walsh

Oxcart bringing in cookstoves from Kampong Chhnang to Phnom Penh

After first visiting the provincial capital—three or four desolate shops, nothing like a capital as you might imagine it—and after navigating from there to a nearby village under the intricate iconography of its archway, installed by the central Cambodian government to mark official settlements in these far-flung regions, and then, after securing permission from the appointed village chieftain to visit households, to observe and to interview residents, finally did Jasmine Hyman meet Vann Tola.

Tola heads a national cookstove manufacturing union. She is 23 years old. Her brand of stove bears the imprint of a coconut palm, and for eight years she has managed three production centers and hundreds of workers in a vibrant local economy bound together by the manufacture and distribution of this single technology.

The cookstove economy is relatively new in Cambodia, but it is not insignificant, with 41 producers spread across an area slightly smaller than Oklahoma, each producer responsible for his or her own brand. Logos include a seagull, goat, airplane, diamond, duck, mango, dragonfly, kangaroo and, of course, Tola’s coconut palm.

Jasmine and local, with a solar cookstove, Ningxia China

Nongovernmental organizations and institutions, like the United Nations, have long recognized the potential of clean-burning cookstoves as levers of sustainable development. About 40 percent of the world’s population uses open fires or antiquated stoves for cooking and heating. These technologies—an artifact of culture and product of poverty—are responsible for a knot of problems: millions of people, women and children particularly, die prematurely from exposure to indoor air pollution; local forests are denuded from the harvest of fuelwood; collecting this fuel takes time and money that could otherwise be used more productively; and open flames emit greenhouse gases and aerosols that contribute to global warming.

Clean-burning cookstoves are designed to tackle all of these problems at once,but for many years the resources devoted to advancing and spreading the technology were scant. Then came the Kyoto Protocol, ratified in 2005, progenitor of the first international carbon market and, alongside, carbon-financed development.

Carbon-financed development rests on compelling theory: rich countries that emit large quantities of greenhouse gases invest in low-carbon development projects in poor countries. These projects can take many forms, from improved forest conservation and agricultural practices to rural electrification through small-scale renewable energy installations. In exchange for bankrolling this work, lenders receive carbon credits that can be sold on a global market or used to meet national emission reduction targets. The basic idea is to efficiently address global warming while raising living standards across the world.

Filming biodigester users in nepal while conducting a household survey

When this market first opened in 2005, public and private institutions snapped their attention to newly arrived investment opportunities in the “bottom billion,” the world’s most economically and politically disenfranchised. In Tola’s case, the cookstoves that she produces burn more efficiently than conventional rural stoves—often no more than three stones pushed together to form a rustic hearth. Outside investors help subsidize Tola’s costs in exchange for carbon credits. In turn, she can sell her cookstoves at a reduced price, which is vitally important for families struggling to stay out of poverty.

In 2010 the Global Alliance for Clean Cookstoves, spearheaded by Hillary Clinton and championed by Julia Roberts, announced it would raise enough money for distribution of 100 million cookstoves by 2020. “Donor countries are piling over each other to get out the press releases,” said Hyman, a doctoral student now in her third year at F&ES.

Despite the surge in interest, few understand how and if carbon finance stimulates development at the local level.While Tola’s story exemplifies the power of carbon finance to seed sustainable development, the reality is less straightforward. For example, Tola’s production centers are beholden to an impractical cookstove design in order to maintain financial support. “I’ve been surprised by the lack of pragmatic, agnostic analysis of aid effectiveness,” said Hyman.

“Will artisans go on and start their own business the next year and not just in cookstoves, but using the general skills they’ve learned? Will they use soft skills like accounting and consulting? Are these changes durable? Jasmine is trying to understand this.”

— Rob Bailis, Hyman’s doctoral advisor.

She recently returned from two months of travel across Southeast Asia, where she set to work trying to quantify the ability of carbon markets to achieve their stated goals: reduce emissions and spur development. She is studying three particular technologies essential to achieving those goals: cookstoves, ceramic water filters and mini-biodigesters, which convert organic waste into fertilizer and combustible gas that can be used for cooking and lighting.

A clear understanding of how these economies develop is essential to their long-term success. Looming behind every development project is what happens when the outside investment dries up. “Will artisans go on and start their own business the next year and not just in cookstoves, but using the general skills they’ve learned? Will they use soft skills like accounting and consulting? Are these changes durable?” said Rob Bailis, associate professor at F&ES and Hyman’s doctoral advisor. “Jasmine is trying to understand this.”

Carbon-financed development, rather than defining and measuring its success, has long sat mired in ideological debate over the proper role of markets. One camp of academics criticizes carbon markets as veiled policy designed to transfer the burden of cleanup to those least responsible for emissions—known loosely as co₂lonialism. They argue that capitalism caused the climate crisis, and more capitalism in the form of carbon markets will only cause more harm. Economists complain that carbon markets are environmentally ineffective, and that blanket regulation like a carbon tax would be more effective in reducing emissions. Many practitioners, meanwhile, welcome carbon markets as a catalyst for technology diffusion and a monetary source free from donor whims. This debate, says Hyman, has developed into a political gridlock comparable to climate change—fiercely partisan, deeply divided and increasingly toxic. “But we need to move beyond this line of argument,” she said. “The carbon market is not a monolithic thing.”

Academics and practitioners, says Hyman, should shift their attention to projects like Vann Tola’s to understand the value of carbon-financed development.

“We all know the arguments against carbon markets, but let’s ask instead: What is success and for whom? When is climate finance appropriate for households? When does it work, and when not? When should we use markets? When are the state and traditional aid more useful, and why?” said Hyman, who has fixed these questions, and the search for quantitative answers, as the foundation of her thesis.

“There are all sorts of invisible things going on behind the scenes and beyond market rationality that determine, for example, whether a new cookstove design will be accepted and useful to a Laotian.”

— Jasmine Hyman

During fieldwork this summer in Laos, Vietnam and Cambodia, she conducted 144 interviews with laborers, company presidents, international development officers and oxcart-driving regional salesmen, and blueprinted their connections to each technology and their role in the local economy. Hyman hopes to use the information to develop generalizable rules applicable tothe wider world of carbon-financed sustainable development.

“There are all sorts of invisible things going on behind the scenes and beyond market rationality that determine, for example, whether a new cookstove design will be accepted and useful to a Laotian,” said Hyman. “We need to make these more visible to improve future projects and to reform development policies aimed at very poor households.”

In 2004 Hyman lefta job ghostwriting speeches for United Nations diplomats and started a master’s in environment and development at the London School of Economics, where she learned about the market commodification of pollution. Her investigation in markets today is spurred by concerns over equality: because markets are notorious for creating losers, Hyman wants evidence that carbon markets can truly deliver something useful to the poor.

With only preliminary results from this summer, Hyman has uncovered two interesting results. First, neither households nor project implementers seem to profit directly from the carbon offsets, even though these offsets are the main driver of investment. Many carbon-financed projects, in fact, operate at a loss. Their value derives instead from the local and self-sufficient industries that emerge around each technology; their value is embodied in the work of Vann Tola, a local leader employing local laborers to provide improved technologies to local residents.

Jasmine atop a biodigester with a local user

Second, successful development projects may require incremental, not transformative, interventions. In the case of mini-biodigesters, many families go from having a three-stone open fire pit to having flammable gas piped from outside into stoves that will light instantaneously, even during the height of the monsoon. This is a radical and expensive change. When the carbon finance dries up, as it must, then biodigester projects often fade away, as very few locals are able to afford the unsubsidized technology.

On the other hand, Cookstoves, while a much smaller step up the so-called energy ladder, engender sustainable economies, functional in the absence of outside aid—Vann Tola, again, is a prime example.

Hyman hopes to test these results across an expanded geography next summer by studying similar sustainable development projects underway in East Africa. She recently completed a grant to help fund the research. She is passionate and effusive about the proposal, which captures the essence of her work after three, or eight, years of refining, depending how you count.

“I can't believe I scored this life,” said Hyman, laughing to herself. “I can't believe this is my job.”

Concern for the Poor Spurs Research into Carbon Markets

Concern for the Poor Spurs
Research into Carbon Markets