Wokai Adventures

Cow Dung, Poverty and Microfinance in Inner Mongolia

Leslie Forman

What does it mean to be green?  How do energy sources relate to poverty alleviation in developing countries?  Who should be making decisions about rural energy use? 

I've been thinking more about these questions lately.  We recently posted some new borrowers on Wokai, whose businesses focus on selling cow dung to burn as fuel.  Here's one such profile:

Several things stand out to me in Aodunsiqige's profile: her daughter's poetic name and musical ambitions, her family's transition from selling millet to lending equipment to selling cow dung, her awareness of options and prices for winter heating materials... 

Curious about the environmental impact of Aodunsiqige's business, I asked my friend Jimmy Tran, who is a pHd student in Berkeley's College of Natural Resources, writing his dissertation on air quality in China.  Jimmy shared the following chart:

Source: World Health Organization.  Download WHO_FuelForLife_2006

In other words, the energy content of dung is low, so you need to burn a lot to produce heat.  Combustion is inefficient, and releases many toxic products, which are harmful to both climate and health.  Much of the burning happens indoors, which exposes people directly to the smoke. 

The use of dung for heating is most common in high elevation regions, where wood and agricultural products are scarce, meaning few alternatives exist.  However, the dung is produced locally, which suggests that less energy is expended in transporting it to its destination. 

Thanks Jimmy for sharing your expertise! 

George, who recently returned from Inner Mongolia, says that dung is used for both cooking and heating homes.  He visited a family that had an empty brick compartment in their house, that heated the room and the food cooking on the stove, and had the resulting smoke channel away through the chimney.  They can also burn coal in the same compartment.  Here's a quick video he made showing what this looks like: 

This reminds me of a blog post that Courtney wrote last year, about her conversation with Tracey Turner from MicroPlace regarding including a "green filter" on Wokai.org to differentiate borrowers using environmentally-friendly technologies.  She wrote:

Are green borrowers necessarily "better" or more "worthy" of a microfinance loan than non-green borrowers? Is it right to create a "green" tier system? Shouldn't the loan distribution be based more on need rather than a "green" factor? Why should Wokai empower users to impose their standards on the working poor? Shouldn't it be based more on a redistribution of wealth than a redistribution of standards?

Yes and no. Some green technologies are beneficial in the eyes of both the user and borrower. For example, some of the microentrepreneurs we visited in Ningxia Province were using solar panels to decrease costs. Why pay for electricity when they can rely on solar energy for free? (Solar panels were donated to the village by a Chinese solar company.) Another borrower we spoke with used biogas to heat her stove. Her entire house was completely sustainable. In both these situations, using clean technologies and microfinance ultimately allowed borrowers to drive down costs. Such a situation allows both borrowers and users to gain from the combination of green and microfinance. ...

Microfinance is about helping those in need and green efforts should be secondary to that. It is our intention to allow users to search by those most in need as well as those that use green business practices. In order to make it all work together, I think it is important to educate users about the green factor, why some borrowers can be green and other can't. It will also be important to monitor non-green borrowers to make sure they are not being left behind because of the "green" filter. We intend to do so. 

Overall, I think that Aodunsiqige's business is a pragmatic way to apply the resources available in her community to meet a critical seasonal need.  I am proud to support borrowers like her in their entrepreneurial endeavors.  At the same time, there is much room for energy innovation in China.  What if there were a more environmentally friendly solution that was both cheaper than local alternatives and presented easily-noticed benefits like improved smell and heat capacity?  I've read about D.light Design, which makes solar-powered lights for India, and Suntech Power, China's largest solar company, and I attended the latest event hosted by BEER (Beijing Energy and Environment Roundtable) and I am enthusiastic about the great work that people are doing to address these issues! 

Grameen, Microfinance and the Sun...yes...the Sun

Courtney

We already know Grameen is a visionary. He was a step ahead of the world's financial institutions like in seeing the HUGE untapped market for consumer financial services to those without credit. 

And now he is one step ahead of the big energy companies in seeing the potential market for energy solutions to that same population.

Grameen Shakti - an affiliate organization of Grameen's - is providing microentrepreneurs with solar panels, green cooking stoves and wind turbines as well as the financing to purchase those technologies.

Grameen Shakti, located in Bangladesh, defines itself as providing an integrated approach to promoting renewable energy technologies. Solar panels have been the primary product since inception. To date, Grameen Shakti has installed over 100,000 solar panels like the one below in microentrepreneurs homes across the country.

 

And that is not all they do, they are also in the business of biogas. Grameen Shakti provides "green" stoves that are fueled with methane gas sourced from animal excrement. Animal waste is aggregated in contained areas. It then naturally breaks down into its elementary particles - namely methane gas- overtime via a process called anaerobic digestion. The gas is ducted over to a stove and then used for cooking.

And the clean technology applications they have implemented in the past or plan to implement in the future goes on and on: micro-wind turbines for power generation and organic fertilizer for increasing crop yields.

The organization has won a number of awards for its innovative technology. Most recently it was named the 2008 winner of the Ashden Award for Sustainable Development.  And before that, the Grameen Foundation selected the organization to receive its 2007 Green Award.

Something tells me that this is not the first or the last  organization we will see that is combining green and microfinance. Green Microfinance is already proof of that....