Josephine Adzrolo sat on a stool in front of her mud-brick home, stirring banku, a fermented paste of corn and cassava served with soup or okra stew. She heated the traditional mixture using a typical cooking fuel—charcoal—an energy source linked to serious global health risk.
But with her family waiting for lunch, Adzrolo cooked outdoors using a stove specially designed with a ceramic liner to retain heat. Although the scrap-metal exterior gave it a rough-hewn look, the cookstove was rated 40 percent more energy efficient than the traditional stoves used in the area.
For Adzrolo, the most obvious advantage was a practical one. “It saves a lot of charcoal,” she said. “I can cook plenty of banku and soup.”
Toyola Energy, the five-year-old Ghana business that made the stove, is aiming for far-reaching benefits as well. By using heat-conserving equipment outdoors, instead of more traditional cookstoves indoors, Adzrolo and others can avoid the high levels of toxic cooking smoke that have ravaged people’s health throughout the developing world.
(Related: “Fighting Poverty Can Save Energy, Nicaragua Project Shows“)
Half the world’s population—3 billion people—cook with wood, charcoal, dung, coal or agricultural residues on simple traditional stoves or open fires. Breathing the smoke from those stoves causes a stunning variety of acute and chronic illnesses—pneumonia, emphysema, cataracts, lung cancer, bronchitis, cardiovascular disease, and low birth weight—all contributing to an estimated 1.9 million premature deaths every year—more than double the global death toll of malaria, according to World Health Organization statistics. Indeed, the WHO estimates harmful cookstove smoke to be the fourth worst overall health risk in developing countries.
More efficient cookstoves are the accepted solution, but it has been difficult to introduce them widely. However, world health and environmental activists believe that thanks to efforts of businesses like Toyola and others, the world may be within reach of a “tipping point” that could lead to mass adoption of clean cookstoves worldwide. Part of the impetus is that this is a health solution that can also help to clean up the atmosphere, a fact that has mobilized finance from the carbon markets that have developed under the United Nations’ initiatives to address climate change.
Even if the Kyoto climate change agreement expires in 2012, such carbon financing is expected to continue voluntarily because of public and political pressure to offset climate change impacts.
Global Attention
Last September, the problem of unsafe cookstoves gained broader attention at the opening of the United Nations‘ General Assembly, when a new public-private partnership, the Global Alliance for Clean Cookstoves, was launched with the help of a five-year, $50 million commitment from the United States government.
(Related: “The Solvable Problem of Energy Poverty“)
The nonprofit United Nations Foundation, which launched the effort, also gained backing from the UN itself, from the governments of Denmark, Germany, Norway, and Peru; the global energy company Shell* and its Shell Foundation; investment bank Morgan Stanley; and the nonprofit SNV-Netherlands Development Organisation.
The alliance’s goal is to help 100 million homes adopt clean and efficient cookstoves by 2020. Its effort has even been featured on the Martha Stewart show.
The alliance notes that women and chidren, who breathe the smoke indoors, bear most of the health risk from the unsafe cooking techniques, as well as the brunt of the long labor spent collecting fuel.
In addition to creating an immediate human health risk, inefficient stoves are estimated to contribute 2.5 to 10 percent of current climate change through the emissions of black carbon or soot, according to research supported by the U.N. Environment Programme. There is a bright side to this dark problem, though. Because the soot stays in the atmosphere for just a few days to a couple of weeks, efficient cookstoves are viewed as a relatively quick way to reduce some global warming.
There is a wide variety of efficient cookstove choices, according to the alliance. Higher-performing stoves that can achieve 95 percent reduction in emissions can sell for about $100. But there is evidence of health benefits even from lesser emissions reductions. (See related blog: “Seeking to Improve Human and Ecological Health Together“) And in Ghana, Toyola has been able to make inroads with its 40-percent-more-efficient models, sold for prices as low as $7. Toyola sold roughly 140,000 cookstoves to households and “chop bars,” or local restaurants, since 2006, including 51,000 stoves last year.
One reason for Toyola’s success is that it has been able to parlay the issue of climate change into carbon revenues. In September 2009, it became just the second cookstove project in the world to be registered by the Swiss-based nonprofit, the Gold Standard Foundation, a high-quality carbon credit certification.
Leslie Cordes, the clean cookstove alliance’s interim executive director, met Toyola co-founder Suraj Wahab at the alliance’s launching in New York in September. She said she was impressed by Wahab and his interest in working with the alliance to make the cleanest stoves possible.
While the alliance hasn’t tested the Toyola stove and therefore can’t comment on it specifically, she described Suraj as “part of a new breed of entrepreneurs looking to scale up production.” And although a stove that generates carbon credits doesn’t necessarily mean that it is highly efficient in reducing all the particulates that might affect one’s health, “Toyola’s work is consistent with the alliance’s efforts to continuously improve the cleanliness and efficiency of cookstoves around the world,” Cordes says.
Local Impact
Toyola’s main office and production plant is among a hovel of mud-brick huts about 10 miles outside Accra, Ghana‘s largest city.
On a recent day, Wahab was helping to unload scrap metal off a small pickup truck, and reloading the truck with 60 freshly painted black cookstoves ready to sell.
Inside one of the modest buildings, workers were assembling and painting the cookstoves. One could hear a constant hammering of scrap metal pieces being flattened. The smell of paint permeated the gritty air. Dozens of cookstoves were stacked in a corner, set to be painted.
Toyola, which has more than 200 workers, has a decentralized operation. It makes stoves in five locations in Ghana and one in nearby Togo; its “stores” are trucks that deliver cookstoves. Wahab calls his salespeople, who earn a 10 percent commission, “evangelists,” because “when we started the business, people didn’t believe in the cookstove and what it could do.”
Even now, Toyola often sells stoves on credit, adding a couple dollars to the price to incorporate interest. Wahab said the company stimulates repayment by encouraging customers to put their charcoal cost savings into a collection tin dubbed the “Toyola box.”
Toyola grew out of the entrepreneurial efforts of Wahab and Ernest Kyei, who had participated in a project funded by the U.S. Agency for International Development to train cookstove artisans.
The Nigerian-born Wahab, who has lived in Ghana 13 years, said he couldn’t get local banks interested in investing in the business. He said they wondered why two educated people—Wahab is an accountant by background and Kyei an engineer—wanted to get involved in such a dirty business.
“I didn’t see coal pots [stoves], but a market of four million [Ghanaians] no one was selling to,” Wahab said.
U.S.-based E+Co, which calls itself a “nonprofit impact investor,” focusing on clean energy projects in developing countries, saw the potential for Toyola to generate carbon credits to subsidize the more costly stoves and to finance growth. It invested a total of $270,000 in Toyola and helped it through the two-year, nearly $200,000 process to gain carbon finance certification.
Erik Wurster, E+Co’s carbon finance manager, said the lengthy process included surveying 125 typical users, and conducting independent “kitchen performance tests” to precisely measure how fuel use changed and declined once a household started using a Toyola stove. A climate change auditor licensed by the United Nations was required to do a sample to verify E+Co’s findings before Toyola received Gold Standard registration.
Independent annual audits are done to validate stove sales and the carbon credits. Each cookstove has an identification number to trace when it was produced and sold. “It’s a very rigorous test, but it has to be because a lot of money is at stake and the buyer has to know what it’s getting,” Wurster said.
Toyola thus far has received revenues from the sale of 51,230 tons of carbon credits for cookstove use between August 31, 2007 and September 8, 2009. That’s roughly equivalent to the carbon dioxide emissions of 10,000 Toyota Camrys, driven 12,000 miles each.
Goldman Sachs bought the credits, indicating how the carbon trade has become a mainstream investment.
Wurster said the Goldman Sachs purchase was confidential, but did say each cookstove generates about $20 worth of credits over its estimated five-year life span. He said the beauty of carbon finance is that it “snowballs”—stoves sold in previous years continue to accumulate credits as long as they are still in operation.
A carbon credit of up to $20 per stove more than offsets the higher production costs of building stoves with ceramic liners, and provides funds for expansion. But there is a lag in getting the carbon financing, and Toyola also faces payments on its debt to E+Co at 10-11 percent annual interest rates.
Wurster said he believes the carbon finance will continue voluntarily. “This is driven mostly by consumer sentiment, which we don’t see drying up just because the Kyoto Protocol might expire,” he said. “We have an agreement with Goldman through 2012, and are now discussing with buyers to commit through 2016.”
In the meantime, the ambitious Wahab is itchy to grow faster and expand into neighboring countries.
He said he can only do so much with manual labor, and would like additional money to invest in mass production. “If I had enough money, I could do 100,000 stoves a year,” he said.
