3(a). Strengthening the role of the private sector (Chapter 30)
In Agenda 21, varying degrees of emphasis are placed on the fact that economic growth, sustainable development and improved environmental protection cannot be achieved unless adequate financial resources are made available for these ends by the industrialized and developing countries.
Increased trade and economic growth have a positive effect on efforts to protect the environment, if only because the funds required to finance environmental projects in developing countries can only be mobilized in this way. Economic growth is one of the preconditions for solving poverty-related environmental problems, and governments must create the overall framework for this process by initiating measures of decentralization and democratization. Household energy programmes promote production, commercialization and trade in the partner countries.
(I) Finance in the informal sector
(II) Management
(III) Capacity building and human resource development
(IV) National policy
(V) Data
The main points covered in this chapter on the environment-friendly organization of production are as follows:
* improvement of production systems;* use of waste-minimizing and energy-saving production processes and techniques;
* optimization of technologies and management practices;
* promotion of cooperation between companies;
* intensification of exchanges of information, experience and expertise on the subject of „introducing clean technologies";
* strengthening of training and implementation of awareness-raising campaigns related to environment-friendly technologies.
In GTZ-sponsored household energy projects, activities aimed at strengthening the private sector play an important role. Projects are based on cooperation with women artisans in the informal sector, making use of their production potential and increasing it. In target areas where there is no scope for commercial marketing, self-help groups are mobilized and supported.
The simple technologies disseminated by household energy programmes are worth the investment, not only from the standpoint of individual households but also for the regions in which they are located. In Mali, a well-maintained and used „Teliman" metal stove can pay for itself in around 22 days, saving up to 40% of the fuelwood normally consumed by the three-stone fire.
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Financial benefits ITDG's programme in Kenya enables producer groups to receive financial benefits through their earnings of around KSh 200-300 (per woman per year) - little more than from other activities and for traditional potters at Umba and maybe less than they were earning before. However the potential for higher and regular incomes exists - the Keyo group members earn KSh 3,000-4,000 per year. A study of the programme carried out in 1992 found that local levels of income were as follows: Minimum wage in Kenya: KSh 25 Recent work on production economics and markets has allowed producers to successfully raise the price of stoves from around KSh 40 to KSh 100-120 which will permit these wage levels to increase significantly. Most groups use these earnings for food, medical and educational expenses - a good indicator that they are relatively poor and that the earnings have an impact on their quality of life. There remains a question about whether stoves are the most profitable product for women potter groups. There do not appear to be many other profitable enterprises open to women, particularly ones where they can work at home. The financial impact on users is highly dependent upon the extent to which they purchase or collect fuelwood and are further complicated by the balance between gathered and purchased fuel, with the poor generally buying less. Non-financial benefits For producers of stoves, benefits which cannot be measured in monetary terms include greater financial independence for women within the household, self confidence among the groups and skill development. It is likely that these benefits outweigh the financial ones. Non-financial benefits to users include time saving in cooking, comfort, safety and convenience, improved nutrition and reduced smoke in the kitchen. The Maendeleo stove emits less than 40% of the carbon monoxide and particulates produced by a three stone fire. Nutrition is damaged in cases where fuel shortages lead to women cooking only once a day. Clearly there is scope for further work to quantify less tangible benefits, particularly their importance to producers and users of stoves. - ITDG |
If sustainable development is to be achieved, it is important for projects to withdraw from the areas of production, commercialization, distribution and transport. Ovens, stoves and other fuel-saving technologies are intended to enter the economic cycle with a minimum of direct intervention.
Producers, merchants and buyer groups are still the main players. They are involved in every step of the process - from the identification of production and marketing constraints to the design and elaboration of options and strategies. Projects limit their consultancy to the provision of advice in procuring materials, but do not handle this themselves. The provision of training enables producers and merchants to arrive at realistic price calculations, so that the prices they charge for their products lie within a range which not only secures the livelihood of the producers of appropriate technologies but is also within the financial means of the customers. The products must remain affordable for broad segments of customers.
Thus, household energy projects have come to regard it as an integral part of their mission to minimize the scope of direct interventions in the market and in the business dealings of the population so that small-scale enterprises and local artisans can become established in the household energy sector and survive in the market on their own merits.
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Sustainability In June 1994, the GTZ subsidy that had encouraged Kenyan Home Economics Officers to buy stoves from producers came to an end. ITDG started a marketing campaign at the same time in an attempt to establish fully commercial distribution channels. ITDG's monitoring data suggests that this has been extremely successful, and that new markets have been established for the current output of stoves. There are Sustainability questions with the RSWK work. Potters could not afford the kind of marketing campaign that has recently been adopted, but there may not be a need to repeat it now that awareness has been established. Some of the groups have been relatively independent of ITDG for some time whilst others continue to receive support. - ITDG |
Micro-enterprises in the energy sector of the developing world include: charcoal producers, woodfuel transporters, wholesalers and retailers, stove producers, biogas systems masons, artisans who make biogas implements, artisans who make solar equipment, and those who make spare parts for renewable energy technologies. Their participation is a significant factor in the biomass sector, and, as emphasized in Agenda 21, it is important to strengthen their role.
Many informal sector entrepreneurs are unable to raise funds due to the collateral required by conventional banking institutions. Revolving funds and cooperative movements can provide more flexible channels for financing household energy development.
Support from international aid organizations is of particular importance in initiating such activities, and efforts to harness local savings through the involvement of the local private sector, local credit and banking institutions, are crucial for long-term sustainability.
Informal entrepreneurs in the energy sector often lack proper management skills. This is a big handicap towards success in innovation and improvement of household inputs. Organizations need to be formed to assist them to improve their skills and gain solid establishment.
Organizing seminars, workshops and exhibitions where entrepreneurs are trained on better manufacturing practices, design, testing and marketing, can advance the sector. This can be done through electronic or print media as well as exhibitions.
Implementation of educational programmes to improve the skills and qualifications of informal sector staff in order to maintain competitiveness, without necessarily resorting to formal education, is important. Universities, professional and even secondary schools can provide refresher courses that last from a few hours to several months. Little investment is required and many entrepreneurs can gain from these structures.
Cooperation is needed between universities, research organizations and the private sector. Research organization and universities posses sophisticated equipment which may be needed occasionally by enterprises. Enterprises can place requests for special analysis to be done for them or some specific studies to be carried out, particularly in instances that require specific skills only existing in engineering schools.
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MEXICO: Dendroenergy for Rural Development Even though Mexico is a member of OPEC, wood fuels are used by more than 50 percent of dwellers in poor rural and periurban areas, accounting for approximately 10 percent of the total primary energy used. To date, Mexico has done very little for the rational utilization of wood as a source of energy. Activities developed in the country were scattered in different states and technical organizations without real collaboration among them. In addition, these activities were focused on very specific technical aspects such as dissemination of improved cooking stoves and charcoal production methods. Now, SEMARNAP (Secretary of Environment, Natural Resources and Fisheries) with the assistance of FAO through its Technical Cooperation Programme, has launched a project aimed at developing its national capabilities, train personnel and initiate demonstration activities in the field for the implementation of sustainable and environmentally sound wood energy systems. The main activities will be focused in four states: Michoacan, Oaxaca, Guerrero and Quintana Roo, where poor people (the majority being Indians) are affected by fuelwood shortages, and where natural forests are being destroyed to meet the energy needs of the local people. |
Efforts have to be directed towards environmentally-sound and energy efficient technologies, but this will only materialize if producers get the right encouragement. Clear national policies on production and marketing of biomass fuels and stoves are required, but in many cases the sector is not considered for appropriate funding because of the emphasis on fuel switching, leaving no incentive for future development. National policies pertaining to the role of the private sector in energy must be formulated in conjunction with all relevant ministries and agencies with interests in energy.
Charcoal production is in some places carried out as a semi-illegal activity since wood used is often illegally procured. Consequently few charcoal makers are willing to make improved kilns. This calls for development of a legal framework to accommodate fuelwood harvesting for production of charcoal.
Data on the scope of application of various household technologies is important to both producers and consumers. If Government organizations dealing with quality control and assurance could monitor and avail information on the number of units sold and their performance, producers would become innovative in a bid to maintain their market status. For national accounts to support analysis of complete economic implications of policies affecting household production of fuelwood, the list of inputs and outputs must be equally complete and clear. However, in developing countries data on inputs and outputs are hard to obtain. More extensive research is needed to quantify the contributions of the private sector to biomass related industries.
