New Pub from Monitor Institute

Just checking out what the Monitor Institute had to say about investing for impact and was pleasantly surprised to find E+Co highlighted in the publication.

Check it out at: http://www.eandco.net/BlogEntry-32.html

Cowboy or Cookstove: Making Carbon About More Than Just Climate

Five years ago, few would have anticipated that the purchase of carbon offsets could be at the center of a mainstream market. This month, however, the US inaugurated a president that strongly supports cap-and-trade as a primary policy mechanism to address climate change.

Whether a US cap-and-trade system promotes clean energy in the developing world, however, is largely dependant upon the extent to which domestic polluters are allowed to purchase carbon offsets from abroad. Allowing polluters in the US to supplement their own greenhouse gas mitigation efforts with cuts abroad will not only be more cost effective, but would also help to address the longstanding gulf between rich and poor that is so central to the climate debate.

Carbon offsets compensate for greenhouse gas emissions by allowing polluters to purchase pollution rights from projects that abate pollution elsewhere. Since the cost of greenhouse gas abatement varies greatly between different economies and different sectors, this allows companies to target least cost emission reductions. In theory, this should be equally effective as reductions in ones own company or nation since avoided greenhouse gas emissions in Nepal have an equal climatic effect as avoided greenhouse gas emissions in New York. But such mechanisms have to be effective and without policy loopholes.

Journalists cleverly invoked the term "Carbon Cowboy" to describe a business person who seeks exorbitant profits from loopholes in international climate treaties to the detriment of developing country economies and sustained environmental impact. Others have suggested that carbon offsets merely placate guilt-ridden polluters while boasting meager environmental gains. Yet if implemented using lessons learned from the past and streamlining the approach used under the Kyoto Protocol, the US could implement an effective approach that includes offsets as a centerpiece of legislation.

To date, domestic and international offsets have been featured in multiple draft climate bills in the US. While some lack any offset component, others allow varying amounts of offsets sourced from the US and abroad. It is unclear at this point what model the Federal government will follow to craft climate legislation, or even when such legislation will emerge, but for the first time in 8 years, the political will exists to tackle this difficult question.

In December, 2009, representatives from nearly every nation will meet in Copenhagen to consider how to address climate change after 2012, the year when the Kyoto Protocol expires. Time is running short to strike such a deal since investors are already fleeing the carbon markets due to uncertainty, and more importantly, the world isn't getting any cooler. US leadership will be integral to striking a deal during this meeting, while the positions of other major polluters such as China, India and other poorer nations will be integral to a renewed treaty. This is why the world's developing economies need something in a global treaty from which they will benefit: enter carbon offsets.

Wealthy nations have powered their economies with fossil fuels for more than a century. Nevertheless, today's developed nations call on industrializing economies to embrace cleaner fuels. It is not surprising that these governments balk at climate commitments that fail to transfer capital and technological know how that addresses poverty in their quest to tackle global warming. This is why offsets will be a critical tool for successfully negotiating a post-2012 climate change treaty in Copenhagen.

If implemented effectively, offsets can have a meaningful impact on poverty reduction efforts in some of the poorest nations. Consider Mali, where the World Health Organization estimates more than 95% of the population cooks with inefficient charcoal and wood stoves. In addition to causing deforestation and global warming, this practice kills tens of thousands of Malians each year from indoor air pollution. Mr. Ousmane Samassekou is a Malian entrepreneur whose company manufactures super-efficient stoves. These stoves slash deadly pollution and greenhouse gas emissions nearly in half.

Samassekou, an E+Co investee, will soon sell carbon offsets from his stoves through E+Co to Goldman Sachs. The revenues from sale will be split between E+Co and Samassekou. E+Co's share will fund business training for entrepreneurs like Samassekou, a key ingredient to a company's success, while Samassekou's share will allow his company to lower its prices so even the poorest Malians can afford this life saving technology.

Before we allow pundits to dismiss greenhouse gas offsets as riddled with fraud or simply a polluter's enabler, we should consider the host of benefits that they offer. When coupled with reductions at home, carbon offsets offer wealthy nations a less expensive way to curb emissions as they invest in the poor. This investment curbs greenhouse gas emissions and reduces poverty, allowing even the poorest Malians to breathe easier. Perhaps these ingredients will underpin an inclusive and effective multilateral global climate change treaty in Copenhagen.

Can the greatest thing about 2008 help support E+Co?

In 2007 I got a new puppy. He is so awesome that I declared him the best thing about 2007. I am ashamed to admit, but the best thing about 2008 was...

the iPhone. I love my iPhone. And I don't even like technology. Everyone I know loves their iPhone. This morning a friend's facebook status read "I am going to attribute everything good that happens to me this year to my iPhone." It's silly, I know, but I can verbally ask my iPhone questions, my iPhone can give me a view from space of the place I am at that very moment, obviously I can make phone calls (starting to seem rather outdated ((the phone calls, not the iPhone)), surf the internet, listen to music, take pictures and probably a ton of stuff I don't even know about yet. I could really go on and on, but that is not the point here.

The point is I read a blog post on the Inspired Economist this morning that talks about using the iPhone as a fundraising and advocacy tool:

So, why wouldn't our love affair with the iPhone help us make the world a better place? Why wouldn't our obsessive usage create perfect opportunities for capturing micro-donation portals to make contributions to the micro-finance or giving sites of Kiva or Global Giving? What about a carbon calculator that lets you immediately link to an offset purchase equivalent to the inquiry? It would seem that millions of tiny donations could add up to lots of impact. It seems possible, and even more so fun.

The author had lots of great ideas of how it might be possible to raise money using the iPhone, and I have one more:

What about an application that allows you to use solar power to charge your iPhone (it already looks like a little solar panel, doesn't it?). Every time the application is downloaded, something like 20 cents would go to E+Co to support clean energy in developing countries. I know it seems crazy, but the iPhone can do everything else, why can't it be clean? iPhone users would be using less energy to use their toy and would also be contributing to clean energy in some of the world's poorest places.

Is Steve Jobs back on duty yet? If so, we need to tell him about my big idea.

Obama and E&Co

Even setting aside the five or six major international conflicts, the global economic meltdown, Gitmo, a flailing education system and the inevitability of retiring baby boomers, the newly-elected U.S. President is going to face the challenge of a lifetime: climate change.

According to a slew of newly released reports, polls and data, here is what the climate has in store for President Obama:

The New York Times recently reported that warming temperatures are doubling death rates in old growth forests in the Western U.S. Longer, hotter summers coupled with increased water scarcity is putting old trees under new stress.

Dying forests, however, are not alone in the deadly spotlight. Antartica, once considered immune to climate change, is also heating up, according to a new study published in Nature. Scientists who co-authored the paper and are associated with the Real Climate blog say:

The paper shows that Antarctica has been warming for the last 50 years, and that it has been warming especially in West Antarctica (see the figure). The results are based on a statistical blending of satellite data and temperature data from weather stations. The results don't depend on the statistics alone. They are backed up by independent data from automatic weather stations, as shown in our paper as well as in updated work by Bromwich, Monaghan and others (see their AGU abstract, here), whose earlier work in JGR was taken as contradicting ours.

Meanwhile, other news outlets are reporting this week that sea levels will rise to that of the last ice age; 2008 was one of the worst years for natural disasters; and dramatic expansion of ocean dead zones should be expected if climate change goes unchecked.

So, what's to be done about all of this? The World Watch Institute just published a report that claims we must reduce global carbon dioxide emissions to zero by 2050 to avoid widespread environmental catastrophe. (President Obama's plan only calls for an 80% reduction in emissions by 2050 and pushing that through will require amazing political force.) Cutting greenhouse gas emissions means changing energy consumption in the U.S., and serving as a role model for the rest of the world, especially as we countdown to COP-15. It also means assisting in the creation of new growth models for developing countries using cleaner energy sources.

But, will President Obama find enough public support to make the difficult changes needed to avoid the worst case scenario? Maybe, maybe not. While scientists are busy generating more evidence of the dire nature of well, nature, the Pew Research Center released a poll that shows Americans are less concerned about environmental issues than they were a year ago. The economy, education, health care, terrorism, social security, energy and crime all rank higher in order of concern than climate change. So, unless the President can issue an executive order mandating that we all care about climate, reducing emissions looks like it is going to be an uphill battle.

What's Happening with SELCO in India?

One of E+Co's first investments, SELCO India now has its own blog!

E+Co first invested in SELCO India in 1995. Today, it is a model social enterprise that has recently received a second investment from E+Co along with the Lemelson Foundation and the Good Energies Foundation.

SELCO India provides sustainable energy services to underserved households in India. Read more about what's happening with the business on its new blog.

2008 World Energy Outlook Released

What's in the energy forecast you ask: increased carbon dioxide emissions, increased demand for coal and a decreasing ability to finance the world's energy needs. Read more highlights (or lowlights depending upon how you look at it) here:

The International Energy Agency, an intergovernmental organization that acts as energy advisor to more than 28 countries, recently released their annual World Energy Outlook, a depressing little report that suggests things will not be getting better any time soon. Here are some projections:

• Carbon dioxide emissions will more than double by 2030 and 97% of the projected increase will come from developing countries between now and 2030.

• World energy demand will expand by 45% between now and 2030.

• All growth in oil demand will come from developing countries.

• Of all the energy sources, demand for coal experiences the largest growth between now and 2030.

And to pay for all of this wonderousness, the World Energy Outlook says:

• Energy subsidies in the 20 largest developing countries hit $310 billion, creating an unsustainable economic burden on developing countries.

• In order to meet energy demand, investment of more than $26 trillion is needed, $1 trillion a year until 2030.

So, what does the World Energy Outlook recommend? (this one's for Phil). They say, and I quote:

While technological progress is needed to achieve some emissions reductions, efficiency gains and deployment of exisiting low-carbon energy [will] account for most of the savings [in carbon emissions].

Good thing that's what we're in the business of doing.

Who is E and Co?

Clean Energy

has the power to combat climate change and fuel progress worldwide. To support clean energy, E+Co invests in local energy businesses in Africa, Asia and Latin America. These businesses, in turn, light poor households, preserve natural resources and expand income. For 15 years our market driven approach has leveraged the immense power of local entrepreneurs to create a cleaner, healthier and more prosperous planet.