Meet Georgina Teye. She sells plastic housewares–baskets, bowls, mugs and the like–at an outdoor market in Somanya, Ghana. She’d like to install solar-powered lanterns at her shop, which is also her home, so that she can remain open later and so that her three children can study at night.
I’m loaning her $100.
I made the loan through a startup nonprofit called Energy in Common.
I did so mostly to make a point–that the problems of energy, climate change and poverty are all tied together. Getting clean energy to poor people is one of the best ways to help them to escape poverty, to combat global warming and to deal with food and water shortages and poor health as well.
This isn’t easy for those of us in rich countries to grasp. We live in a world of cheap, abundant energy. Sure, you may nag your spouse or your kids to turn off the lights or turn down the thermostat. But when was the last time you thought about the energy needed to power your laptop, your TV, your stove or even your car? Probably the last time your power went out during a storm.
In the global south, and particularly in Africa and south Asia, energy is a daily worry for the more than 1.5 billion people who don’t have access to electricity. Without safe and reliable energy, people can’t grow crops beyond subsistence levels, operate a factory, get water to where it is needed, refrigerate food or drugs, or study at night.
Worse, some of the alternatives to clean energy for the poor–cooking or heating by burning wood, dung, agricultural residues or coal, or using expensive, dirty kerosene lamps–are not only bad for the planet, they’re terrible for human health.
This set of problems led Hugh Whalan, a 26-year-old Australian, to start Energy in Common.
“Energy, he said, is at the base of just about any development outcome you’d want,” he said. “Yet it isn’t a Millenium Development Goal. We’d like to give energy a higher profile.”
Hugh traveled widely in the global south–he volunteered at refugee camp on the Sudanese border, helped victims of land mines in Cambodia, and taught English in Uganda–before coming to the United States where he landed a job at a carbon finance company called Environmental Credit Corp. There, he met Scott Tudman, with whom he co-founded Energy In Common. They wanted to combine their knowledge of energy and carbon finance with their desire to bring clean energy to the poor.
“I wanted to make an impact in Africa,” Hugh told me. “I was torn between development work and business.”
Think of Energy in Common as a green Kiva. Entrepreneurs, most of them women, are featured on the website. Donors decide how much money they want to lend. Local microfinance institutions deliver the funds to the borrowers, who are expected to repay. Of course, there are no guarantees.
For borrowers, there’s an added bonus–carbon credits. Here’s how Energy in Common explains that:
A little team of brainy people here at EIC analyze the carbon data over the period of your loan and add up the amount of emission reductions created by the entrepreneur. These emission reductions are then sold to lenders (like you) as carbon offsets, which means you can buy the very carbon offsets that you helped to create allowing you to reduce your carbon footprint too. That tax-deductible purchase then goes straight back into finding and helping even more entrepreneurs – and so the cycle begins again.
If Georgina Teye succeeds with her solar lanterns, replacing electricity from the grid, she will save 0.8 metric tons of CO2 per year, which is the equivalent of a U.S. family not using electricity for 49 days. And I’ll get my loan repaid, and be able to lend the money to someone else. Nice.
Which raises a question: Why have markets and aid groups failed, so far, to deliver energy to the poor. “Part of the reason,” Whalan told me, “is that for many years, investment was channeled into large-scale projects.” Only recently, and in large part because the work of the late C.K. Prahalad and Stu Hart, have entrepreneurs look at the billions of people at the bottom of the pyramid as consumers and entrepreneurs and not charity cases. Technologies like solar power and LED lights are also relatively new.
Of course, Energy in Common is a very small group; so far, it has funded fewer than two dozen entrepreneurs. Whalan says his goal is to deliver clean energy to 15 million people in the next five years. Even if Energy in Common succeeds, it will put only a small dent in the energy divide between rich and poor.
Fortunately, there are lots of other businesses and nonprofits working to bring clean energy or to the poor. Among them are Kiva, Global Giving, Kopernik (which I wrote about here) and Dissigno (which I blogged about last month). There’s plenty of room for all of them, and many more,