Nonprofit Chronicles

Carbon offsets have delivered many millions of dollars to finance cookstoves, for better or worse–probably, alas, for worse. Since the Global Alliance for Clean Cookstoves was formed in 2010, so-called clean cookstoves distributed to poor people in the global south have been paid for, in part, with carbon offsets purchased by companies, western governments and private donors. You, for example, can buy carbon offsets generated by cookstoves in Rwanda.

But what are you buying? Carbon offsets are strange. They are, in essence, the certified absence of a colorless, odorless gas — CO2 — or of other greenhouse gases, like black carbon, that cause climate change. The thing is, it’s hard to know whether a cookstove actually prevents the emissions of CO2 or black carbon. Was the cookstove used as directed? Did it last as long and operate as efficiently as expected? Maybe, but quite likely not. That’s unfortunate for the poor, who get broken or subpar stoves, and for governments or wealthy donors, whose well-intentioned efforts to help go for naught.

This is a problem that a small nonprofit called Nexleaf Analytics has begun to solve, by using Internet-of-things technology — low-cost sensors and cloud computing — to find out whether cookstoves are actually being used as directed.

Uh-oh! Early signs are that cookstove usage is often lower than expected at first, and declines from there.

Meantime, and more importantly, Nexleaf has come up with a business model to support cookstoves that will deliver revenues from carbon offsets directly into the hands of poor families who use the stoves. They will cut out some of the middlemen in the arcane carbon-finance industry and give users a financial incentive to cook in a way that’s better for the planet, and for their own health.

Nexleaf is a 21st-century tech-focused nonprofit. It was started in 2009 by Nithya Ramanathan and Martin Lukac, who were then PhD students in computer science at UCLA. They could have made gobs of money but instead decided to look for ways that sensor technology could improve the lives of the global poor. Nithya Ramanathan was influenced by her father, V. Ram Ramanathan, a climate scientist; her sister, Tara Ramanathan, joined her at Nexleaf for several years. While Nexleaf began with cookstoves, but its biggest and best-funded product is ColdTrace, a wireless sensor that monitors the temperature inside refrigerators to keep vaccines safe. With support from the Bill & Melinda Gates Foundation and Google.org, more than 13,000 ColdTrace sensors have been deployed in seven countries.

Nexleaf’s cookstove project is much smaller, for now touching just a few hundred homes in remote farming communities in Odisha in eastern Indian. But it has far-reaching implications for the cookstove sector. (As regular readers of this blog know, about 3bn people a year cook indoors on inefficient stoves fueled by wood, charcoal or animal dung, which give off pollutants that make them and the planet sick.) With its sensors, Nexleaf is able to gather reliable feedback from customers about whether stoves are being used, and then learn which designs appeal to customers and why. This is radical, at least for the cookstove sector.

Nexleaf has learned a lot about cookstoves by deploying sensors. In a peer-reviewed study of about 650 homes in Odisha, it found that households spent far less time using the stoves than expected. Usage declined even in households that were rewarded with direct payments for using the stoves.

The peer-reviewed study, published as a letter last year in Nature Climate Change, says: “Self-reported data on cooking duration have little correlation with actual usage data from sensors.”

“The actual mitigation of climate pollution,” the study also said, “was only 25% of the projected mitigation.”

Interestingly, an earlier and unrelated study of the very first cookstove project in India approved for offsets by UN regulators generated similarly disappointing results. It found that the so-called cleaner cookstoves supported by carbon finance “did not significantly reduce fuelwood consumption compared to traditional stoves.” The project was well-managed, by a local NGO, the study’s authors said, but even so “adoption and use of the intervention stoves…was only seen in 60% of intervention households.”

It’s inadvisable to generalize from a study or two, but these findings at the very least raise doubts about whether the buyers of carbon offsets in the cookstove sector are getting their money’s worth of climate benefits. Or whether the poor are getting the much-hyped health benefits of cleaner stoves.

“There is a lot more to solving this problem than simply getting cleaner-burning stoves into people’s homes,” Nexleaf says.

Or as Erin Ross, Nexleaf’s communications manager, observes: “If you give somebody a treadmill, you don’t make them healthier unless they use it.”

Using feedback to improve design

There’s good news, though. Because Nexleaf’s sensors provide real-time feedback on usage, the nonprofit can then investigate when things go awry. The problem may be something as simple as a broken part, or a more complex design issue. Either way, NexLeaf responds to the feedback and shares its knowledge with stove designers and manufacturers.

What’s most exciting about Nexleaf is that its potential to help even very poor families afford high-quality cookstoves. It addresses the fundamental problem with the cookstove sector as articulated by Kevin Starr of the Mulago Foundation, which, not incidentally, funds Nexleaf. “The affordable ones are inadequate, and the good ones are unaffordable,” Starr has said. Nexleaf believes that its “sensor-enable climate financing,” which pays poor households directly, via mobile phones, could make high-quality stoves affordable. It’s still early days, though.

Funders of Nexleaf, besides Mulago, include Qualcomm Wireless Reach, which helped the nonprofit develop StoveTrace, and the World Bank. Current climate fund payments are supported primarily by the Beneventures Foundation and John “Mac” McQuown, an index fund pioneer, and his wife Leslie.

Nexleaf remains a small player in the cookstove world, with only about 25 employees (including those who work on ColdTrace) and it spent about $2.4m in 2015, the most recent year for which its budget is available. The organization has big ideas, though–it has worked to monitor air quality in homes using cleaner cookstoves, and it plans to include air quality monitoring as part of future sensor-enabled climate financing interventions, to insure that promised health benefits are being delivered to the poor. Whether Nexleaf can scale or not, it is already a model of integrity for the rest of sector.

Which brings me back to those carbon offsets. It’s hard to know how many cookstoves have been financed by offsets, or how many money has been spent on them, but the numbers are not trivial. In 2015, the Global Alliance for Clean Cookstoves published a catalog of cookstove projects — essentially, a sales brochure for offset buyers — that included nearly 60 cookstove projects that were seeking funding. Some years, carbon finance has been the top reported source of cookstove funding. In 2013, offsets were worth about $61m and, as recently as last year, even after offset prices tumbled, it was reported that about 3m stoves were subsidized with carbon finance, at prices that average just under $5 per ton. These cookstoves are typically sold in large quantities to governments or NGOs and then distributed to customers who, we now know, may or may not use them.

If even a fraction of the money spent on offsets for cookstoves was steered to the best nonprofits in the sector, including Nexleaf, we’d all be better off.

Here’s a five-minute video about Nexleaf from the Financial Times.