Corporate-Led Sustainable Development and Energy Poverty Alleviation at the Bottom of the Pyramid: The Case of the CleanCook in Nigeria

World Development Vol. 45, pp. 137–146, 2013 Ó 2012 Elsevier Ltd. All rights reserved. 0305-750X/$ - see front matter www.elsevier.com/locate/worlddev

http://dx.doi.org/10.1016/j.worlddev.2012.10.009

Corporate-Led Sustainable Development and Energy Poverty Alleviation at the Bottom of the Pyramid: The Case of the CleanCook in Nigeria TEMILADE SESAN University of Ibadan, Nigeria

and SUJATHA RAMAN, MIKE CLIFFORD and IAN FORBES * University of Nottingham, UK Summary. — Corporations are increasingly viewed as key actors in poverty alleviation. “Bottom of the Pyramid” (BoP) advocates suggest that MultiNational Corporations (MNCs) can simultaneously alleviate poverty and make profits by selling scaled-down products to the poor. Our paper investigates this claim using the case of the CleanCook stove-and-fuel technology introduced in Nigeria by an MNC working through a nonprofit organization and local business actors. Supply and demand-side analyses show that the CleanCook is least likely to reach the energy-poor BoP households originally targeted. The evidence suggests that serving the BoP requires greater differentiation than can be achieved with profit-driven business models. Ó 2012 Elsevier Ltd. All rights reserved. Key words — bottom of the pyramid, CleanCook, corporate-led development, energy poverty, Nigeria, Africa

1. INTRODUCTION

market liberalization, civil society organizations have begun collaborating with private sector actors to “cocreate” delivery models which are aimed at increasing the transformative potential of development interventions (Brugmann & Prahalad, 2007). The underlying premise of the cocreation approach is that each set of actors brings a unique set of skills and resources to the table which can be leveraged by the other to facilitate achievement of the shared goal of poverty alleviation (Brugmann & Prahalad, 2007). In this paper, we aim to contribute to the ongoing interrogation of the corporate-led development movement in development studies (e.g., Newell, 2008; Newell & Frynas, 2007; O’Laughlin, 2008; Utting, 2008). Specifically, we focus on the role envisaged for business in linking poverty alleviation with sustainable development through the promotion of clean energy technologies. Kolk and van Tulder (2006) argue that technologies that meet the needs of host peoples should be a key element of corporate-led initiatives that are targeted at developing countries. Prahalad and Hart (2002) in their influential “Bottom of the Pyramid” (BoP) concept propose that corporations can improve the quality of life of the poorest in developing countries by creating basic versions of existing products that people at the bottom of the income pyramid would otherwise not be able to afford. Our paper draws on empirical investigation of one such technology—the CleanCook stove-and-fuel technology—to assess corporate involvement in poverty alleviation and

Private sector actors are increasingly viewed as key contributors to poverty alleviation and sustainable development objectives such as those envisioned in the Millennium Development Goals (MDGs). In particular, emphasis has been placed on the lead role that MultiNational Corporations (MNCs) can potentially play in applying business principles and practices to solve development problems. In what is variously described as a movement in corporate social responsibility (Newell & Frynas, 2007; O’Laughlin, 2008) or corporate community development (Muthuri, 2008), proponents argue that MNCs possess a unique combination of features required to combat poverty on a global scale including access to technology, skills, and finance; proven ability to access even the most remote of locations; and a tendency to stick with projects once they have been established (Lodge, 2002). Such arguments have been particularly resonant in light of critiques of state-led models of development and waves of deregulation which began to emerge in the 1980s alongside civil society and market actors playing a governing role in key areas such as provision of water, electricity, health, and education (Newell & Frynas, 2007). Advocates of corporate-led development extend their critique of traditional development efforts to UN-based international development agencies, arguing that they tend to reinforce rather than replace systems’ underlying poverty (Lodge, 2002). Indeed, the traditional providers of development aid are themselves making the case for greater private sector involvement in poverty alleviation. For example, the UN has launched a Global Compact to establish global “sustainable development partnerships” (Levy & Chernyak, 2006) between itself, governments, civil society, labor, and business toward realization of the MDGs (United Nations, 2008). Further, under the current global climate of

* The authors wish to thank the Petroleum Technology Development Fund of the Federal Ministry of Petroleum Resources, Nigeria, for sponsoring the main body of this research. Final revision accepted: October 23, 2012. 137

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sustainable development in developing countries. The CleanCook technology is promoted by the Sweden-based MNC, Dometic AB, to address the problem of widespread dependence on fuelwood and other solid biomass fuels for cooking in poor countries. According to the International Energy Agency, an estimated 2.7 billion people lack access to modern cooking energy sources such as Liquefied Petroleum Gas (LPG) and electricity—almost twice the number of those who lack access to electricity for lighting (OECD/IEA, 2010). These two interrelated dimensions are key indices of the phenomenon labeled energy poverty in developing country contexts (OECD/IEA, 2010). The United Nations Commission for Sustainable Development (UNCSD) states that lack of access to energy hinders development (including achievement of the MDGs), undermines economic growth, and puts a strain on the environment (UNCSD, 2007). Access to modern, “clean” energy sources for cooking and lighting is therefore considered to be crucial for multiple MDGs including the eradication of poverty and hunger, the promotion of gender equality, educational attainment, health, and environmental sustainability (UNDP, 2010). This paper focuses on the initiative to promote CleanCook in Nigeria, where fieldwork was conducted in 2009, to determine the extent to which it is likely to succeed in its primary objective to alleviate energy poverty among biomass-reliant populations at the bottom of the income pyramid. The paper begins by expanding on the emerging corporate-led model of sustainable development and poverty alleviation in developing countries. This is followed by a methodological section elaborating on the process by which data were gathered in the course of empirical research in Nigeria. Our discussion of the CleanCook initiative starts with a description of the project’s origins in the global North and its presentation as an appropriate technological solution to the problem of energy poverty in developing countries generally, and in Nigeria particularly. We then go on to assess the impact that the business-led delivery model envisaged will have on the objective of energy poverty alleviation in the Nigerian context, first from a supply-side and then from a demand-side perspective. The paper concludes with a discussion of the implications of the project outcomes for corporate-led initiatives aimed at alleviating poverty among bottom-of-the-pyramid populations in developing country contexts. 2. BUSINESS AND SUSTAINABLE DEVELOPMENT AT THE BOTTOM OF THE PYRAMID The notion of business engaging with other actors to support marginalized groups is not new—corporations in the global North and South have long been involved in philanthropic ventures to support local communities (Chapple & Moon, 2005; Reed & Reed, 2009). Traditionally, such community involvement by corporations involved either donations to a charity, which then assumed responsibility for delivering social outcomes, or the direct management of social investment inhouse (Nwankwo, Phillips, & Tracey, 2007). These approaches have however come under criticism for their limited contribution to local capacity building, their focus on short-term outcomes, and the restricted role that they afford to communities (Nwankwo et al., 2007). Although instances of the corporate philanthropic approach to poverty alleviation remain in practice (see, for example, O’Laughlin, 2008), there is a growing emphasis on seeing poor people as customers (Prahalad & Hart, 1999) or as active producers (Karnani, 2007a), rather than merely as passive

beneficiaries of benevolent business actors. The view of poor people as customers is encapsulated in the “Bottom of the Pyramid” (BoP) concept (Prahalad, 2004; Prahalad & Hart, 2002). The term “BoP” is used by Prahalad and Hart (2002) to refer to the “world’s 4 billion poorest people” (p. 2) variously described as earning less than US$ 1500 a year (Prahalad & Hart, 2002); less than US$ 2000 a year (Prahalad & Hammond, 2002); and less than US$ 2 a day (Prahalad, 2004). Regardless of where the poverty line is drawn, Prahalad and Hart (2002) argue that the BoP offers enormous opportunities for companies to diversify their products and services to the mass markets of the poor, who benefit by gaining access to products that are simultaneously better and cheaper than existing local alternatives. The market at the bottom of the pyramid, Hart and Christensen (2002) suggest, is completely unsaturated by contrast with the limited growth opportunities in traditional developed country markets. The core of the BoP proposition is that business actors can provide price- and culture-sensitive products to poor people previously excluded from formal market transactions while maintaining their profitability. Thus marketing to the BoP involves offering scaled down (but not necessarily lower quality) versions of products selling in global and local markets at far higher prices than the poorest in developing countries can afford. Scaling down existing products is essential if poor people are to be able to afford them, but this process of innovation is also considered significant in terms of environmental objectives. Indeed, Prahalad and Hart (2002) suggest that countries which do not yet meet basic human needs are ideal testing grounds for businesses to develop environmentally sustainable technologies and products for the world as a whole. Hart and Christensen (2002) label such technologies “disruptive innovations” which are capable of combining the goals of corporate growth with social and environmental responsibility. One of their many examples is that of sustainable energy access where they argue that there is a potential bonanza awaiting business pioneers who focus on developing decentralized renewable fuel technologies for the majority of people at the bottom of the pyramid. In the world of practice, we see the UN Global Compact placing the main responsibility for innovation, development, commercialization, and widespread dissemination of technologies—particularly clean technologies—on businesses. Indeed, three out of the ten principles of the Compact specifically encourage businesses to develop and diffuse environmentally– friendly technologies (United Nations, 2008). This convergence of corporate responsibility, sustainable development, and promotion of technology can also be seen in the CEO-led World Business Council for Sustainable Development (WBCSD) set up to provide business leadership on sustainable development issues (WBCSD website). Sustainable development is defined in terms of meeting the needs of the present without compromising future generations, allowing the WBCSD to define itself as a leading business organization advocating market-based solutions to both development and environmental challenges (WBCSD website). However, the plausibility of the BoP theory and of the larger role envisaged for corporate actors in development has been challenged on several fronts, both in the business and development studies literatures. The critical point that is perhaps most pertinent to the BoP proposition in both literatures is the fundamental tension—even incompatibility—observed between the business imperative of profit maximization and the development objectives of poverty alleviation and sustainability (for example, Bond, 2008; Karnani, 2007a; O’Laughlin, 2008). Karnani (2007a) points out that many of the examples

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cited by proponents to support the BoP theory show corporations making a profit when they sell to consumers higher up the pyramid rather than those at the very bottom—simultaneously discrediting claims of business serving the poorest and indicating very low levels of purchasing power at the BoP. Karnani denounces the BoP’s emphasis on the poor as consumers aspiring to a higher quality of life, asserting instead that a valuable contribution of business to development would be to engage with the poor primarily as producers and suppliers, thereby raising their incomes and offering them a more substantive route out of poverty. Either way, Karnani warns, focusing excessively on the private sector to lift people out of poverty risks distracting from the attention that ought to be paid to public sector actors responsible for promoting more equitable and inclusive development at the bottom of the pyramid. A widespread critique of the BoP proposition is that there is a dearth of empirical evidence to support claims that selling to the BoP really does alleviate their poverty (see, for example, Crabtree, 2007; Karnani, 2007b; Landrum, 2007). In light of this observation, our paper evaluates evidence gathered from the corporate-led CleanCook project originally focused on making a cleaner cooking energy source available to biomass-reliant households in Nigeria. In assessing the energy poverty-alleviation potential of the project for households at the bottom of the income pyramid, this paper contributes to the evidence base regarding the impact of BoP initiatives on the poorest. 3. METHODS The data used in our analysis of the CleanCook project were gathered from primary and secondary sources. Primary data were generated over a 6-week fieldwork period in Nigeria between October and November 2009. Qualitative research methods were employed in fieldwork; mainly nonparticipant observation and semi-structured interviewing. Nonparticipant observation was undertaken during a meeting of stakeholders convened to discuss the commercial “scaling-up” phase of the CleanCook project following completion of the pilot phase in 2007. The benefit of being in attendance at such a meeting was that it presented the opportunity to observe in a “quasi-naturalistic setting” (Maynard, 1998, p. 133) the way that different interests were represented on the project, particularly those of the private sector actors keen to invest in the commercial phase of the project. The extremely productive opportunity to sit in on a meeting of such an interesting mix of stakeholders enabled the observation of deliberations and interactions among the actors in a way that personal interviews would not have captured. Seven in-depth interviews were held at various times with three CleanCook project staff; five interviews with members of participating households in Warri, one of nine pilot project locations in Delta state; and three interviews with national energy policymakers, for a total of 15 interviews. The limited access gained to project locations was due to practical restrictions encountered in the field. As is to be expected on a cookstove project, the unit of implementation of the CleanCook was the household. We discovered, not surprisingly, that access to this most private of settings—an example of what Buscatto (2008) refers to as “closed spaces”—could only be obtained with the guidance of field staff who had previously deployed the technology in the various project communities. Of only two members of CleanCook field staff at hand to offer assistance at the time of fieldwork, one member of the staff who had overseen implementation of the project in a rural

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location declined to be involved on the basis that it would be an uphill task to negotiate access to the community within the time available for fieldwork. All five households that we gained access to in Warri, an urban location, had been classified on the CleanCook project as belonging in the middle-income category. Interview questions were designed to capture the experience of each household on the project. The questions posed did not vary greatly from one interviewee to another, as we found the group to be a relatively homogeneous one with regard to energy use, socio-economic status, and perception of the project. Crucially, the homogeneity of the sample meant that it was possible to achieve a degree of saturation in that location with the small sample size available. It may be argued that this homogeneous sample is not representative of the range of households that participated in the project. However, in the analysis presented here, the interview data have been supplemented with secondary information published by one of the implementing organizations, particularly the official documentation of a 2006 baseline survey carried out across all nine project locations. Although it has been argued that official documents such as these are carefully produced to present organizations in a particular light and therefore should not be accepted uncritically by qualitative researchers as unequivocal representations of reality (Atkinson & Coffey, 1997; Murphy & Dingwall, 2003), they nevertheless provide useful information and can present interesting possibilities for analysis (Hammersley & Atkinson, 2007). The interviews with policy makers were with senior officials at the Energy Commission of Nigeria (ECN), the government organization in charge of overseeing matters relating to the national energy policy. These interviews were undertaken primarily to provide context, rather than content, for the study. The insight that these interviews afforded into the high-level policy issues around energy use and economics in the country served as a useful backdrop for analysis of the data obtained on the standalone CleanCook project. 4. THE CLEANCOOK AS A BOP TECHNOLOGY The CleanCook project originates in the Sweden-based Dometic Group which is a major international provider of leisure products for the caravan, motor home, automotive, truck, and marine markets. In conjunction with the United States-based Stokes Consulting Group, Dometic has set up an international nonprofit organization, Project Gaia, to explore opportunities for promoting alcohol-fueled (methanol or ethanol) cooking stoves in different developing countries. The stoves were first introduced by Project Gaia to South Africa (2001), then Nigeria (2003), Ethiopia (2004), and Brazil (2006). Dometic’s partnership with Stokes Consulting and the consequent founding of the nonprofit Project Gaia emerged out of Dometic’s conviction that the CleanCook technology holds great potential for alleviating the phenomenon of energy poverty prevalent in developing countries. The strategy adopted here exemplifies the cocreation model identified by Brugmann and Prahalad (2007) which, the authors assert, makes it possible for corporations to leverage the contextual knowledge of nonprofit organizations to better serve BoP markets. Both the CleanCook stove and fuel were originally high-end technologies produced specifically for the luxury market in developed countries. The CleanCook stove is an adapted version of the Origo stove first introduced in 1979 by Dometic for use aboard recreational vehicles. In the early 2000s, Dometic identified an opportunity to scale down

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the Origo and market to energy-poor households in developing countries. The redesign of the Origo stove was carried out by Dometic engineers working from factories in Slovakia and Sweden. The result of this modification process was the CleanCook stove, produced at less than half the cost of the original stove. By Project Gaia’s assessment, the CleanCook stove fulfilled the criteria necessary for it to be considered appropriate technology for developing country contexts: it was an “economy stove” which retained all of the safety and durability features of the more expensive Origo stove and which would prove to be one of the least expensive stoves available in the marketplace when its cost was spread over its minimum expected life of 10 years (Ebbeson, Stokes, & Stokes, 2000). As such, the CleanCook strategy is hinged on the prospects of scaling down a cooking technology that was originally targeted at niche markets in developed countries and transferring it to developing countries for everyday use. The other aspect of the strategy—scaling up dissemination of the technology via market platforms—is revealed in Project Gaia’s assertion that “we have the technology, we can create the market” (Project Gaia, n.d., p. 1). This assertion reflects assumptions that align with Prahalad and Hart’s (1999) claims that BoP markets by definition are created from scratch and are thus populated by hitherto “invisible” (Landrum, 2007) newcomers to the market economy, rather than consisting of wealthier sections of society already represented in formal market activities. In Nigeria, an estimated 84.5% of the population lived on less than US$ 2 a day in 2010, calculated at 2005 international prices (World Bank online databank). Despite being a major oil-producing country earning billions of dollars from the export of crude oil (approximately US$ 12 billion in 2006—CIA World Factbook, 2007), its citizens face enormous challenges due to energy shortages, a situation which has crippled economic growth in the country (Adeyemi, Ijeduigor, & Ezea, 2008; Ugeh, 2008). The household sector in Nigeria accounts for about 80% of energy use, compared to 11% in the industrial sector, 7% in the transport sector, and 2% in all other sectors (IEA, 2008). Several studies conducted locally (for example, Adegbulugbe & Akinbami, 1995; Adeoti, Idowu, & Falegan, 2001; Oladosu & Adegbulugbe, 1994) have shown cooking to be the most significant end use of household energy in the country. For an estimated 67% of the population, this substantial demand for cooking energy is met by solid biomass fuels (WHO, 2006a). The CleanCook project was originally conceived by Dometic and its partners as a response to the energy poverty situation confronting this group of households at the bottom of the income pyramid in Nigeria with restricted or no access to modern sources of energy, and which therefore depend partially or wholly on solid biomass fuels for cooking (Obueh, 2008). This aspiration is also set out on the Dometic website with reference to the new technology’s benefits for families relying on solid biomass fuels in developing countries more generally. 1 In particular, the CleanCook is presented as a radical technological solution to the problem of biomass smoke-induced indoor air pollution which, according to World Health Organization estimates, is responsible for nearly 2 million deaths yearly (WHO, 2011). This paper goes on to analyze how the CleanCook technology has interacted with the Nigerian market, in the process highlighting certain limitations apparent in the implementers’ attempts at engaging with the BoP, first from a supply-side and then from a demand-side perspective. The paper demonstrates how the CleanCook cocreation nexus in Nigeria consists not only of the MNC Dometic and the nonprofit

Project Gaia, but also of local businesses seeking to profit from the new technology. Importantly, the paper highlights the implications that the involvement of the latter set of business actors is likely to have for biomass-reliant households at the BoP. 5. ASSESSING SUPPLY-SIDE INTEGRATION OF THE CLEANCOOK TECHNOLOGY (a) Negotiating fuel supply for the CleanCook stove In 2003, Project Gaia carried out a 15-stove CleanCook pilot study in Nigeria, followed by a larger study with 150 stoves in 2007, after which plans for large-scale commercialization of the stove-and-fuel technology began. Project Gaia introduced the technology to Nigeria on the premise that the country’s Niger delta region holds one of the world’s largest reserves of natural gas from which it should be easy to process methanol fuel in commercial quantities. This, in Project Gaia’s opinion, made Nigeria “the ideal place to begin a project” (Interview Project Gaia Staff 1). Moreover, a potential BoP target market of about 88 million people (67% of the nation’s population of approximately 132 million people in 2006—CIA World Factbook, 2007) presented good business prospects. The two pilot projects carried out in Nigeria were targeted at urban and rural households in Delta state, one of the nine states in the oil-rich Niger delta region of the country. 2 Many local communities in the Niger delta have for decades suffered environmental degradation caused by the oil spills and gas flares that result from the oil exploration activities of MNCs operating there since the late 1950s (O’Neill, 2007). According to Project Gaia, the gas flared on those oil fields in the delta, if harnessed, is enough to provide cooking gas to 320 million people in West Africa over the next 50 years (Interview Project Gaia Staff 1). The initial plans to scale up dissemination of the CleanCook stoves after the 2007 pilot were based on calculations of processing methanol fuel from the abundant quantities of gas being flared on those oil fields. Project Gaia found Delta state a particularly attractive location for the project because, endowed with 40% of Nigeria’s total oil and gas resource, Delta is simultaneously the most productive of the oil-producing states in the Niger delta area (Obueh, 2008) and the state most negatively impacted by gas flaring activities (Stokes & Ebbeson, 2005). At the same time, the majority of households in Delta state cook with solid biomass fuels to such a degree that Project Gaia staff noted that “it is ironic that the people of Delta state must cut down their valuable forests to cook literally in the sight of oil rigs and flow stations” (Obueh, 2008, p. 4). This juxtaposition of opportunity and deficiency in Delta state apparently constituted an auspicious premise for Project Gaia to intervene with the CleanCook. However, the original plan to reform methanol from flared gas in Delta state did not materialize owing partly to Project Gaia’s inability to successfully negotiate the complex sociopolitical terrain of the Niger delta. The CleanCook stove requires a stable supply chain of alcohol fuel, which proved difficult to establish in the context of ongoing conflict within the delta over the distribution of oil and gas revenues. In spite of the abundant wealth that is being tapped from the oil fields daily, the Niger delta remains one of the most underdeveloped regions in Nigeria. Citizens view the oil and gas MNCs as looters and the federal government as a co-conspirator in a state-multinational capitalist system that systematically robs the region of its wealth and denies development to present

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and future generations (Omoweh, 2005). The history of the Niger delta is replete with instances of militant uprisings instigated by groups of citizens who demand justice and claim to fight for the collective rights of people in the region to better treatment by the state and MNCs (Watts, 2009). What has resulted is a palpable atmosphere of distrust of the state (and MNCs) among citizens: “People feel cheated, you know, the government has not also been fair to the people. Let’s be candid. People keep talking about Niger delta, because they’ve seen that the government is not effective!” (Interview Project Gaia Staff 2)

Obueh (2006) reports that Project Gaia had been forced to conduct a week-long “community relation and awareness exercise” (p. 107) in between the 2003 and 2007 pilot projects, when conflict arose in a certain community over the intentions of CleanCook project staff. There is however no indication that this element of community involvement was integrated into Project Gaia’s overall strategy following the incident. Project Gaia’s failure to incorporate citizen participation as an explicit component of its efforts to introduce the methanol production technology was especially problematic in Delta state where, along with Rivers and Bayelsa states, resource-related militancy in the delta has been most pronounced over the past decade (Asuni, 2009). Given that it is precisely these sorts of contextual peculiarities that Project Gaia might be expected to identify and attempt to negotiate on Dometic’s behalf, it is unclear the extent to which the cocreation model adopted in this case has promoted the objectives of the project. (b) Generating a local network for market dissemination In light of the complexities involved in establishing infrastructure for industrial methanol production, Project Gaia chose to adopt a seemingly less complicated alternative: smaller scale, decentralized production of ethanol in microdistilleries operated by hundreds of local small and medium business enterprises. As was the case under the original methanol production plan, Project Gaia expected the recourse to ethanol production to be unproblematic because “ethanol is easily produced from agricultural material” (Interview Project Gaia Staff 1) and Nigeria has been certified the world’s largest grower of cassava (IFAD, 2008), which is a viable agricultural feedstock for ethanol production. To facilitate implementation of the new plan, Project Gaia went into partnership with Cassava Agro-Industries Services Limited (CASL), an indigenous company with experience in industrial cassava production. This partnership is particularly important for the project considering that a relatively high degree of agricultural specialization is required to realize the new cassava-to-ethanol conversion plan. Cassava, unlike flared gas, has to be cultivated before it can be used as a feedstock for ethanol. Further, setting up a decentralized system of ethanol production requires more in-depth knowledge of local business processes than Project Gaia possesses. CASL essentially assumed the role of project manager for the commercial phase, coordinating three groups of business actors: contract cassava farmers, ethanol micro-distillery operators, and ethanol marketers (Acha, 2009). In Project Gaia’s view, the modicum of potential that the CleanCook project seems to have demonstrated for survival beyond the pilot phase is attributable to the proactive manner in which CASL embarked upon generating a marketing model for the project which incorporates several other local business actors. On the other hand, Project Gaia envisages a passive

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regulatory role for relevant government departments in the country. This strategy reflects the neoliberal view that businesses, rather than governments, ought to be the principal agents of development (Reed & Reed, 2009). Project Gaia and its partners may find it easy to justify this approach on account of the weakness of existing policy and institutional structures in Nigeria. One of the most relevant institutions in this regard is the Energy Commission of Nigeria (ECN)—the government organization which, as we noted earlier, is responsible for enacting policy and coordinating public and private sector activity across the energy sector (Anozie, Bakare, Sonibare, & Oyebisi, 2007; ECN, 2003). Interview data however reveal that the ECN has not been active in exercising this mandate—with the result that the energy sector is quite loosely held together by a weak center unable to ensure joined-up, coordinated, effective policy making and implementation within and across sub-sectors (Interview ECN Official 1). In assuming overall management of the CleanCook project in Nigeria, CASL fulfilled Project Gaia’s original expectation that local business actors would eventually take over the project and facilitate dissemination of the technology through the market. Indeed, CASL came to completely “own” the project, even “lovingly” renaming it the “Cassakero project” as part of a local branding effort to better adapt it to the Nigerian context: “[People] need a word that sticks. A word that explains to them without too much grammar, what the fuel is. When you say Cassakero, immediately they remember kerosene. Cassava-based kerosene, or the intention is, ethanol, a cooking fuel produced using cassava as raw material. So to reduce all of this to just one word that people can remember, we use the word ‘cassakero’. Cassakero was more fun, it sounded more trendy, and could explain what we’re trying to say.” (Interview CASL Staff 1)

The developments in the post-pilot phase may have seemed good for business, but their likely impact on biomass-reliant households at the BoP appear less promising. In the above statement, CASL is unequivocal regarding the group of people expected to benefit from the CleanCook technology in the market dissemination phase: kerosene users. It is apparent that under CASL, the CleanCook technology largely metamorphosed from an intervention targeted at solid biomass users into one promoted as a cheaper alternative to kerosene. Indeed, CASL has articulated a medium-term plan to displace 60% of the kerosene used in Nigerian homes with ethanol by 2013, because the implementers now claim their studies have revealed that “that is what Nigeria needs” (Interview Project Gaia Staff 1). The ultimate target of CASL’s Cassakero drive is to build sufficient technological capacity to consistently generate enough ethanol to satisfy a considerable portion of household energy demand: “We want to build a national dedicated production capacity with a dedicated output of 4 million litres per day. This will translate to about 1.4 billion litres of ethanol per year, dedicated for use as household fuel to replace kerosene for cooking, for lighting, for heating – and other household uses.” (Interview CASL Staff 1)

Obueh (2008) links the new focus on kerosene users with Project Gaia’s original objective of mitigating indoor air pollution by listing “high emission of soot and particulate matter” (p. 4) as a health hazard associated with the use of contaminated kerosene in Nigerian households. However, this assertion is not backed up by the conclusions of wider studies in the field of stove development, such as those carried out for the World Health Organization by Mehta and Shahpar (2004) and Smith and Mehta (2000) in which kerosene is classified as a “clean fuel” along with electricity and gas, as opposed to “dirty” biomass fuels that are responsible for the

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bulk of global exposure to indoor air pollution. This implies that the targeted problem of indoor air pollution applies more to solid biomass users than to kerosene users, and so interventions such as the CleanCook that seek to address the issue can potentially make a greater impact on the former group than on the latter. CASL’s redefining of the objective of the CleanCook project in favor of kerosene users is perhaps a reflection of the reluctance of business actors to cater to the energy needs of biomass users whom they view as offering little prospect of profit (Interview ECN Official 1). This outcome undermines the assumption that “invisible” BoP populations can be coopted into market transactions simply by creating products for them to use, and supports Karnani’s (2007a) critique that many products targeted at the BoP end up serving those at higher points on the pyramid. The following section illustrates the prospects for uptake of the CleanCook technology across income groups in Nigeria, focusing in particular on the implications for the BoP who, in this case, are low-income households that rely primarily on biomass for cooking. 6. EVALUATING DEMAND-SIDE INTEGRATION OF THE CLEANCOOK TECHNOLOGY For Project Gaia, a radical departure from tradition, one characterized by a shift from reliance on biomass stoves and fuels to the use of a more modern cooking technology like the CleanCook is required for two main reasons. The first, as noted previously, is the organization’s concern with eradicating the harmful smoke emissions resulting from biomass fires. Secondly, the organization cites the results of its own studies in developing countries in which households cooking with “inferior” biomass fuels expressed a desire to “move up the energy ladder” (Interview Project Gaia Staff 1) to more modern, cleaner energy sources. The CleanCook intervention has therefore been framed by its implementers as a relevant, even necessary, response to the articulated preferences of poor energy users in developing countries. The concept of the energy ladder has been used to explain the relationship between the income category of households and their energy use patterns (Leach, 1992; Masera, Saatkamp, & Kammen, 2000; Pachauri & Spreng, 2003; Reddy & Reddy, 1994). The energy ladder theory depicts low- and middle-income households as being reliant to varying degrees on solid biomass fuels, and shows the tendency for households to move up to more modern and efficient fuels with “increasing prosperity and development” (WHO, 2006b, p. 8). The linear progression assumed by the energy ladder model has however been challenged on the basis that even when households adopt more modern cooking systems as a result of increased incomes, the new technologies usually serve to complement, rather than substitute for, traditional cooking technologies and practices (Hiemstra-van der Horst & Hovorka, 2008; Masera et al., 2000; Nansaior, Patanothai, Rambo, & Simaraks, 2011). This has been shown to be largely the case in both urban and rural households in developing countries (Masera et al., 2000). The data gathered from middle-income CleanCook pilot participants in the course of our fieldwork in Warri project the multiple fuel use patterns reported in the literature. The women interviewed diversified their cooking energy sources as widely as their incomes allowed them to—typically using the cheapest available option that would suit their cooking purpose at any point in time. However, they generally oscillated between kerosene and LPG: kerosene was the default

fuel used for meals that took longer to cook, while the more expensive LPG was usually the fuel of choice when speed was the objective. For this group therefore, the CleanCook stove is likely to constitute a second or third alternative to kerosene and LPG cookers depending on availability and appropriateness for the cooking task at hand. Generally, the women in the interview sample seemed quite satisfied with the performance of the CleanCook stove and fuel. What mattered most to them was that the stove performed as advertized and that fuel supply would be as constant in the commercial phase as it was in the pilot phase. The following statement by one of the women is representative of the overall positive response to the project in those middleincome households: “It was an interesting experience, like all other projects. You’re exposed to being monitored and questioned intermittently by different people coming to see you in the house and so on and so forth. I’m used to it, so I quite enjoyed it. Actually, [the project staff] introduced it to me, he said there’s a project going on now, and what it entails, to utilize the available resources for a cheaper way of, and less hazardous way of cooking. So he actually told me, but not the details. All I’m interested in is something to use, that’s all. That’s it.” (Interview Warri Household 1)

However, as noted earlier, the interview data gathered in Warri only capture the experiences and perceptions of a sample of middle-income households in one of nine CleanCook pilot locations. Analysis of data from a baseline study carried out by Project Gaia in 2006 gives some insight into the way that low-income households on the other hand are likely to interact with the CleanCook technology. The analysis suggests that the impact of the new technology will be a lot more mixed for low-income households, especially those who rely primarily on biomass for cooking and who constitute the majority of the BoP in this case. The evidence lends credence to the argument of BoP critics who maintain that the middle classes, rather than the poorest, tend to be the main beneficiaries of initiatives targeted at the BoP. Project Gaia conducted the baseline study with the 150 households selected for the 2007 pilot, to determine the precise configuration of local energy use patterns. Participating households were selected randomly across three income groups—low, middle, and high—in both rural and urban areas. The study sought to establish the types of cooking stoves and fuels used in households across the income groups and the annual fuel expenditure of those households. The study reported that low income households (categorized by Project Gaia as those earning US$ 0–130 per month) were mostly fuelwood or kerosene users, middle income households (earning US$ 130–750 per month) were mostly kerosene users, and high income households (earning over US$ 750 per month) were mostly LPG users (Bailey, Samson, & Murren, 2006). The baseline study results essentially show a disparity in the type of fuel used across the low, middle, and high-income groups. Although most households in all the income groups use more than one fuel/stove for cooking, the households that are lowest on the income pyramid are much more likely than others to use a biomass source (particularly fuelwood) as their primary cooking fuel, as Table 1 below shows. Table 2 allows us to compare the average annual expenditure on all types of cooking fuel across the three income groups, categorized according to their primary fuel source. During the pilot phase of the project, it was established that a family of up to four people (two adults and two children) using the CleanCook stove will require 1 l of ethanol fuel per day, or 365 l per year (Obueh, 2004). At a projected cost

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Table 1. Percentage use of fuelwood, kerosene, and LPG by income group Primary household fuel

Percentage use of fuel

Fuelwood Kerosene LPG

Low income (43 households)

Middle income (67 households)

High income (25 households)a

48% (21/43) 48% (21/43) 2% (1/43)

9% (6/67) 72% (48/67) 19% (13/67)

4% (1/25) 44% (11/25) 52% (13/25)

Adapted from Bailey et al. (2006). a The official project document used in this analysis only reflects data for 135 homes—a total which contradicts the figure of 150 homes indicated in the title of the document.

Table 2. Average annual fuel expenditure by income group Primary household fuel

Average annual fuel expenditure (US$)

Fuelwood Kerosene LPG

Low income

Middle income

High income

25.09 95.77 294.72

17.90 317.00 431.00

64.43 681.27 1053.60

Adapted from Bailey et al. (2006).

of US$ 0.38 per liter of ethanol (Bailey et al., 2006), this translates to a total ethanol fuel expenditure of US$ 138.70 in 1 year—much higher than the average annual fuel expenditure for fuelwood users across all income groups. 3 The annual fuel expenditure figures quoted above are class averages, however. Disaggregating the values will enable us to emerge with a more nuanced picture of fuel expenditure in individual households. In light of the present task to determine the impact that the CleanCook technology will likely have on BoP households, Table 3 gives a breakdown of annual fuel expenditure among all 21 low-income households in the baseline study sample that use fuelwood as their primary cooking energy source.

From Table 3 below it is possible to make a number of observations about low-income fuelwood users. The first is that the majority of households do not conform to the CleanCook project’s maximum family size of four. With the exception of households 1 and 7, all the households in the sample had more than four members at the time of the study; in the case of household 10, as many as 14 members. While total fuel expenditure is not necessarily proportional to household size (household 7 for instance spends a lot more on fuel than household 21, despite being significantly smaller in size), it is clear that most households would have to spend more than Project Gaia’s conservative estimate of US$ 138.70 per year if they were to “move up” to using the CleanCook. About a

Table 3. Energy use and expenditure in low-income households using fuelwood as primary fuel source HHa

HH size

Fuelwood source

Secondary fuel

Annual fuel expenditure (US$)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

4 8 7 6 6 5 3 6 6 14 5 5 8 5 6 8 6 6 7 5 10

Gathered Gathered Purchased Purchased Gathered Purchased Gathered Gathered Gathered Purchased Gathered Gathered Purchased Gathered Gathered Gathered Both Gathered Gathered Gathered Gathered

None Kerosene Kerosene Kerosene Kerosene Kerosene Kerosene None None Kerosene None None None None Kerosene Kerosene Kerosene Kerosene Kerosene Kerosene Kerosene

0 111.11 200.00 166.67 64.81 No data 259.26 0 0 189.67 0 No data 277.78 0 81.48 277.78 44.44 27.78 120.37 111.11 138.89

Adapted from Bailey et al. (2006) and Obueh (2006). a HH = household.

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third of the households in the sample already spend more than this estimate on fuelwood and/or kerosene annually. However, for these households, most of which use kerosene as a secondary fuel, it is possible that the relatively low unit price of ethanol (compared to kerosene at US$ 0.54 per liter—Bailey et al., 2006) will compensate to some extent for slightly larger family sizes. For households that currently spend less than US$ 138.70 on cooking fuel per year, it is not clear the extent to which adopting the CleanCook might make them better off. All the households in this category gather fuelwood freely, and kerosene accounts almost exclusively for their total fuel expenditure. For this group, the potential savings engendered by the lower unit cost of ethanol may be offset by individual household sizes, all of which are larger than Project Gaia’s maximum projection of four people. The prospects are least favorable for those low-income households that only gather fuelwood and therefore spend nothing on cooking fuel. Again, there is no evidence that simply presenting these households with the option to purchase a cleaner stove and fuel on the market will persuade them to take that option, especially when it is certain that it will cost them more. Overall, the likely impact of the CleanCook among biomassreliant low-income households appears to be more muted and uncertain than Dometic’s official narrative would suggest. It is interesting to note that the low-income category defined in the baseline study as households earning US$ 0–130 per month correlates with Prahalad and Hart’s (2002) definition of the BoP as those earning less than US$ 1500 a year. This categorization encompasses a much broader range of households than would be the case using Prahalad’s (2004) absolute poverty line of less than US$ 2 a day which, Karnani (2007a) notes, is equivalent to about US$ 3 in 2006 prices and is more consistent with internationally accepted measurements of poverty. It is likely that the prospects of uptake of the CleanCook by low-income households in the pilot project locations would have been even less optimistic if the baseline study had employed this significantly narrower definition of the BoP to begin with. Thus, the CleanCook may have been intended to be a disruptive technology that would provide a cleaner and more efficient energy alternative for bottom of the pyramid markets, but in reality, its effect on those populations will likely not be as transformative as was originally envisaged. 7. DISCUSSION AND CONCLUSION There is widespread consensus in the international community that investment in technology is crucial to poverty alleviation and achievement of the Millennium Development Goals. Corporations are seen to be in a particularly advantageous position in terms of promoting this agenda. Direct provision of clean energy technologies to the poor is recognized as a particularly valid means by which business actors can contribute to sustainable development in comparison with other corporateled poverty alleviation strategies. In this paper, we have analyzed one such strategy represented by the efforts of the multinational company, Dometic AB, working through the nonprofit organization Project Gaia and later on the indigenous company Cassava Agro-Industries Services Limited (CASL), to introduce CleanCook stoves and alcohol fuels to the Nigerian market. The strategy, which entails simultaneously scaling down the CleanCook technology from its Northern origins and scaling up its dissemination in Southern BoP markets, was evaluated to determine how the technology

has interacted with target populations in the Nigerian context. The findings show that the impact of the CleanCook on the BoP—in this case biomass-reliant low-income households— will likely not be as transformative in reality as the implementers’ rhetoric would suggest. The market-led approach to dissemination favored by the CleanCook project was intended to tackle the widespread problem of energy poverty on an appreciable scale; an especially pertinent concern given the weakness of state policy implementation in Nigeria. Nonetheless, analysis of the implications of this approach from both a supply-side and a demand-side perspective converge on the point that the CleanCook technology is least likely to be affordable among households at the BoP where the problem of energy poverty is most acute. As we have seen, CASL’s entry into the cocreation nexus originally comprising Dometic and Project Gaia was marked by a shift in the CleanCook project objective from providing biomass-reliant households with a cleaner energy source to offering kerosene users a cheaper energy alternative. Although these two groups of energy users sometimes overlap, substantiating the multiple fuel use claims made by several authors in the literature, the baseline study carried out by Project Gaia shows that low-income households are more likely than other income groups to use biomass as their primary fuel source— that is, the fuel used to cook for longest. As such, while the image of a linear progression along an energy ladder may not be an adequate representation of reality, there does appear to be a correlation between primary fuel use and income level. This would place low-income households that rely primarily on biomass squarely at the BoP, and it is the impact of the CleanCook intervention on this group that this study is most concerned with. Within the group of biomass-reliant low-income households involved in Project Gaia’s baseline study, three categories were identified: households that spend more than the CleanCook’s conservative estimate of US$ 138.70 on cooking fuel annually; those that spend less than this estimate; and those that spend nothing on fuel. Analysis of individual household compositions and annual fuel expenditure revealed that those already spending the most on cooking fuel are more likely than others to benefit from the cost savings offered by the CleanCook. Indeed, there is no evidence that the CleanCook strategy will be able to co-opt into the market those households that currently do not participate in commercial energy markets—undermining a core argument of BoP theorists. On the contrary, as Bailis, Cowan, Berrueta, and Masera (2009) note, it is more likely that emphasizing a commercial model for the dissemination of cleaner cooking technologies will further exclude the poorest from market participation. What this suggests is that there needs to be a differentiated approach to meeting the needs of the BoP, as even the earliest proponents of the BoP theory rightly observe. However, it is not clear that business actors are indeed best positioned to demonstrate the sensitivity required to achieve this differentiation. The dynamism demonstrated by CASL in attending to the energy demands of kerosene users while ignoring the energy challenges of biomass users illustrates this point, and suggests that the business case for BoP initiatives—and business involvement in development more generally—is much stronger than the “development case” (Blowfield, 2005) for such initiatives. Critics of the BoP concept question whether poverty alleviation can really be left to business actors to accomplish. They take the view that business, with all the assets at its disposal, may be a powerful driver of technological progress, but it cannot be relied upon to align its priorities with the needs of the poor who often cannot afford to participate in formal markets

CORPORATE-LED SUSTAINABLE DEVELOPMENT AND ENERGY POVERTY ALLEVIATION

(Etta & Parvyn-Wamahiu, 2003). According to Reed and Reed (2009), corporate involvement in poverty alleviation is likely to be based more on the returns to them and their strategic interests than on development priorities and impacts. This concurs with the observation made by Kolk and van Tulder (2006) that corporations, in their performances of development, tend to focus more on “content issues” that ultimately contribute to safeguarding the company’s corporate reputation than on “context issues” that take into account local conditions and priorities—issues which, paradoxically, have the most potential to empower poor people and lift them out of poverty. Similarly, Bond (2008) questions the commitment of corporations to pursuing the sustainable development goals of poverty alleviation and equality, asserting that the prioritization of profit by corporations is not compatible with the realization of those goals, especially when they involve the provision of public goods such as clean water and health. Taking together Bond’s argument and Bailis et al.’s (2009) characterization of clean cooking energy as a public health good, it is apparent that realization of the CleanCook’s health and environmental benefits among biomass-reliant households at the BoP cannot be left entirely to business actors motivated mainly by profit.

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“In between” social enterprise models that adopt business principles with the primary aim of using financial returns to further social and environmental goals (Leadbeater, 2007) offer some promise for poverty alleviation; however, such models often require substantial support from nonmarket actors to be successful in reaching the poorest segments of society (Bailis et al., 2009; Dees, 1998). Even then, as Shrimali, Slaski, Thurber, and Zerriffi (2011) suggest in the specific case of improved stoves, social enterprises may still find the true bottom of the pyramid inaccessible relative to poor segments of society which are higher up on the pyramid. In conclusion, we note that the CleanCook case illustrates that market-led technology development projects aimed at BoP populations in the South can potentially record more precise impact by starting with a consideration of local demand (the willingness and capacity of target populations to pay for the new technology), rather than with external supply parameters (such as the development potential of the technology and optimum channels for its dissemination). As Leach and Scoones (2006) put it, running the “slow race” to making technology actually work for the poor means a commitment to pursuing development pathways and priorities as defined by the poor themselves.

NOTES 1. CleanCook leaflet available at http://www.dometic.com/3bd0d4501131-4f8f-8ce7-90e8283815e0.fodoc. Retrieved 18.06.10 2. The nine states in the Niger delta are: Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo and Rivers (Watts, 2009).

3. According to Bailey et al. (2006), the CleanCook stove is valued at US$ 50. However, the cost of the stove will be integrated into users’ fuel purchases, with the payment spread over a minimum of 4 years (CASL Staff 1). The expectation is that this will significantly lower the barrier that the initial acquisition cost would otherwise present to poorer households.

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