Greedy profit seekers tend to find profit opportunities where others don't--even if they happen to help others (spliced and diced from here).
People who work on providing clean water in poor countries estimate that about half the projects fall into disrepair soon after their builders move on. ..
Now there’s a new way to save water projects from an early death: make clean water a for-profit business, charging people an unusual price: zero....
Where will the profits come from? Polluters.
What will make this work are the global carbon credit markets. These markets were established after the 2007 Kyoto Protocol to limit greenhouse gases that cause climate change. The markets provide a way for wealthy countries and corporations to offset their emissions of these gases by financing other projects that will reduce emissions. Projects can be awarded credits if auditors certify they will cut carbon emissions ─ for example, a new wind energy plant whose output will replace coal energy. These credits can then be purchased by polluters, be they countries, companies or individuals...
Most of the projects that have won certification from the carbon markets are big energy plants in India and China. Less than three percent of the credits come from projects in Africa, and none of them help people get clean water. But one of the carbon credit markets does grant credits for cookstoves that use solar energy instead of wood or coal.
Vestergaard Frandsen’s idea is similar. By giving people an alternative to boiling water in order to purify it, it will reduce greenhouse gas emissions in countries where trees are scarce. Boiling water is harmful for many reasons. Burning coal produces greenhouse gases, and certain ways of burning wood can, too. The indoor pollution created by burning wood or coal is a prime cause of respiratory disease. The constant need for wood is deforesting poor countries. Women who are already spending hours collecting water must spend additional hours collecting firewood as well. From the standpoint of the carbon credit markets, however, the key point is that boiling water will eventually create demand for fossil fuel, as many areas are running out of trees. So for many reasons, finding a usable alternative to boiling is good for people and good for the earth.
Now it can be good business as well. If you are a hiker or camper, you may have heard about Vestergaard Frandsen’s LifeStraw. It’s a hollow stick equipped with a series of filtering membranes. You put the end of the stick in a river or puddle ─ or a toilet, for that matter ─ and suck on it. By the time the water hits your lips, it is clean and safe ─ its filters are fine enough to trap virtually all bacteria, viruses and parasites. The product has a bigger cousin called the LifeStraw Family. You hang it on your wall, pour dirty water in the top, open the tap and clean water comes out the bottom. No power or replacement parts are required. Each unit cleans about 18,000 liters of water ─ enough for a family for three years. The market cost of the unit averages out at a penny per ten liters of water purified.
Vestergaard Frandsen will distribute the LifeStraw Family for free...
The company is on the way to getting approval from one of the carbon credit markets for the LifeStraw Family, and expects to win it in February. Approval will provide a way for Vestergaard Frandsen to recoup its $24 million initial investment and to turn the product into a sustainable business ─ at no cost to users. It will earn credits for preventing greenhouse gas emissions, credits that polluters will then buy. The company will open free repair shops across western Kenya. Every three years, at the end of the units’ lifespan, it will replace them at no charge.
Why would a for-profit business do all this? Because the amount of carbon credits it receives depends on how much boiling it prevents ─ and therefore, how much water is purified. (Periodic audits will answer these questions.) The more the product is used, the more credits Vestergaard Frandsen is awarded, and so the more money it makes. So it has a strong financial incentive to maximize the number of families using the purifiers and keep them working properly.
You will notice that this financing method pays for performance. Normally, water projects get financing from donors up front. Whether they end up working or lasting is rarely even measured, because there is no cost for failure. But the carbon credit market penalizes failure. Vestergaard Frandsen also now has a good monetary reason to improve the product ─ to create one, for example, that can be refurbished instead of replaced, or one that lasts longer than three years. This kind of incentive is a rarity with products that are given away.
