The real carbon market upside

The carbon market offers green solutions to the 1.4 billion people who live without grid electricity, but much more needs to be done.

Over 1.4 billion people in the world live without grid electricity. On average, an underprivileged family spends 15-30 per cent of their total income on kerosene or other toxic resources that actually emit more greenhouse gases than light.

Through the use of clean energy products such as LED lights, the potential exists to provide millions of people with off-grid lighting sources as well as access to economic opportunities. However, the main obstacle that is preventing rapid expansion and distribution is limited access to major funding sources. Recently this has been changing due to increased support from the carbon market, but it's clear that green solutions in developing nations will only become more abundant if it receives the exposure it deserves.

The Role of the Carbon Market

Carbon market participants such as the World Bank have been exploring opportunities to mobilise capital and assist with sustainable development for some time.

With the introduction of the carbon market after the Kyoto Protocol, participating industrialised nations were required to purchase carbon offsets in order to put a cap on global emissions and it has since resulted in a $US180 billion industry. In such a trading scheme, offsets can be purchased in several ways, one of which gives emitting countries the option to invest in clean energy technologies that benefit the developing world in order to receive credits.

Up until recently, large-scale industrial projects took precedence over smaller-scale projects, such as solar lighting ventures. While large-scale projects are important, it’s also vital to consider that at least 190 million tonnes of CO2 emissions per year are attributed to fuel-based lighting in off-grid communities.

One program that has been successful in connecting disadvantaged regions to affordable green energy is CarbonSoft. With the support of one of Africa’s largest financial institutions, Standard Bank, CarbonSoft has been developing and rolling out programs in Malawi, Ghana, South Africa, India, Indonesia and the Philippines.

CarbonSoft, initially developed by Frontier Carbon in June 2011, has provided renewable, low-cost solar lighting options to people that live on less than $2 a day. CarbonSoft does this by providing equal access to the benefits of the carbon market. It adheres to the United Nations process of registering and monitoring clean energy projects that generate carbon credits and allows anyone from individuals to not-for-profit organisations to gain access to clean energy funding.

Also, by remaining product neutral, the CarbonSoft platform offers a new and innovative approach that drives price competition while maintaining a diverse selection of high quality products. Not only does this market approach allow low-income families to connect to solar energy, but it also provides significant social and economic benefits to communities.

There are several key features that distinguish the CarbonSoft platform from other programs in the solar lighting industry. The first element is the ability to provide communities with a variety of lights to choose from. Since solar lights come in many sizes with varying levels of brightness, communities need to consider costs and other factors when selecting a product.

Another important feature that is specific to CarbonSoft is access to all technology providers. Since the CarbonSoft platform is technology neutral, it provides support to all products that meet the minimum UN approved standards. Since CarbonSoft has been in operation, it has created an incentive for solar light suppliers to improve their lighting standards and make the light brighter and more durable for families to use.

As technology improves and the costs of new technologies become more affordable (i.e. mobile phone chargers), further support will be offered to these communities in need.

Lastly, CarbonSoft handles the entire UN project approval process by adding additional value such as logistics, program design, marketing, training and business support for people undertaking solar light programmes as well as community education programs and government relations. The alignment of the program with the UN process also provides rigour and accountability in ensuring sustainable development and co-benefits are provided to the communities. This allows NGO’s and other organisations to focus on ensuring that lights are delivered to families instead of spending manpower on the application, approval and administration processes.

When these organisations can focus on working directly with the local people, it’s often found that the success rate of the program is also a lot higher.

Why Is This So Important?

Small changes such as providing adequate lighting to rural areas in developing countries can seem like a small endeavour, however the impacts are priceless.

Plentiful solar lighting is just the beginning to alleviating the poverty cycle and improving the global standard of living. Not only do these projects help facilitate economic development by providing better access to education and telecommunications, but they also foster engagement with those responsible for designing new technologies as well. It initiates an open dialogue across multiple industries and government institutions and addresses solutions at the grassroots level.

Through the continued support of the carbon market and assistance from other funders, CarbonSoft has the capacity to provide solar lamps over one million people by 2020 and continue changing the world one light at a time.

Jennifer Lauber Patterson is the Executive Director of Frontier Carbon and Head of the Climate Market and Investment Association, Australia and New Zealand. For more information on how to get involved with CarbonSoft or Frontier Carbon please visit www.carbonsoft.net or www.frontier-carbon.net.