In Episode 6, we visit Honduras. Nearly half of the world's population cook with inefficient fuels, which damages the environment and public health. Mafalda Duarte, Head of the Climate Investment Funds, explains how a project by the Climate Investment Funds and the Inter-American Development Bank helped to created a sustainable market for clean cookstoves, and identifies lessons that could be applied to benefit 3 billion people around the world.
What is the challenge this project sought to overcome?
Honduras has a population of around 10 million people which is heavily dependent on wood fuel for household energy consumption, like many other countries in the world. 47% of households use this fuel for cooking, and among them 88% of rural households. It is ingrained in the culinary culture of Honduras that cooking food with wood fuel stoves contributes to flavour.
But these traditional cookstoves not only require a lot more wood, but they produce large amounts of smoke that very severely affect the health of children and adults. The Institute for Health Metrics and Evaluations estimates that this causes the death of around 3,665 people every year.
What was the aim of the project?
The project aimed to promote the use of clean cookstoves instead of traditional fuels. These are cookstoves that consume 40% less than traditional cookstoves. They not only improve energy efficiency but they reduce expenses by over 50% compared to the costs of fuel wood, which is very important for poorer households. So they deserve a lot of attention both from a climate change perspective and a public health perspective.
There have been several interventions by aid agencies since the 1980s to try to distribute clean cookstoves to the Honduran population, and they did distribute a reasonable amount, but they were heavily reliant on unpredictable external donations. This meant that manufacturers would not see business opportunities or a market being generated and several went out of business. Another issues was that the interventions were highly scattered and there was very limited information or lessons on these cookstoves shared across the supply chain. Cookstoves also ended up being distributed to all social classes, even those who could have afforded to purchase them.
Our project aimed to create a sustainable, demand-driven market for clean cookstoves. We faced demand and supply constraints - on the demand side, people were used to receiving these for free, and on the supply side was the manufacturers’ previous reliance on external funding.
How did you overcome these challenges?
Firstly, we established an ISO standard on clean cookstove quality. This is important nationally because it signals to the market, manufacturers and purchasers what quality is expected for stove efficiency, durability and impact on indoor air quality. The standard can also be used globally.
With the Netherlands Development Organisation, SNV, we filled a very important coordination gap between the manufacturers, implementing agencies, donors and government by creating a national coordination platform. This platform also coordinated promotion efforts because marketing and awareness raising is really important when you are trying to create a new market.
On the finance side, we lowered the costs for local households to replace their traditional cookstoves with new clean cookstoves. These subsidies were provided through micro loans. Alongside these loans, we provided technical assistance on the installation of the stoves and on how to operate and maintain them. We financed the training of 300 stove technicians who would work very closely with households. This is important because you need to ensure that the beneficiary knows how to maintain the equipment, or a market is created to support the maintenance, otherwise whenever things stop working people revert to business as usual and it is a sunk investment.
What were the results?
As of last year, this project was helping to avoid more than 35,000 tonnes of greenhouse gas emissions annually and reducing the health risks associated with indoor air quality in the targeted households. This improved clean energy access for around 73,400 Hondurans, half of them women. We saved households time and costs associated with collecting wood for their previous wood fuel stoves. Importantly, our $3 million investment attracted an additional $4 million from other public and private sources to really scale up the impact of the project.
What lessons or solutions from this experience could be applied more widely in the fight against climate change?
This is a good example of transformational change: how to target investments in a way that does not have a one-off impact but drives systems-wide change and changes what has been common practice. We aim to create markets that have sustainability. This means that public resources and subsidies will hopefully no longer be needed after a time. It is important to have a goal in terms of how many cookstoves are distributed, but it is more important to look for gaps in the market and come up with a strategy that focuses on structural issues that need to change.
The project also shows the importance of coordination when you have many interventions by different aid agencies, government and other stakeholders. We need to drive more coordination, support government with their processes, and influence national policy. From the private sector market point of view, it is critical to generate information on different segments of the market and target interventions accordingly.
These lessons could be applied very widely. Globally nearly half of the world's population, so approximately three billion people, still use solid and inefficient fuels such as coal, wood and crop residues for their domestic energy needs. This is a very significant global issue and the ISO clean cookstove standard could be applied everywhere. But other countries can also draw from the experience of Honduras and the challenges that we faced in trying to stimulate and drive this private sector market, and think about how they would overcome these challenges in their own countries.
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