Improving Cookstoves in Bangladesh: A New Case Study on Blockchain Technology and Climate Change

A greener and more sustainable society can be achieved through practical market approaches. A successful transition requires a combination of transparency, legitimacy and incentives designed around the community. Main terminologies stated here include DAOs and voluntary carbon markets (VCM). The KlimaDAO initiative to improve cookstoves in Bangladesh and other parts of the world through these organizations shows the dual potential that can exist as well as their complementary benefits.

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A DAO (Decentralized Autonomous Organization) is a new organizational method coordinated around blockchain technology to better serve digital societies. Decentralized in nature, DAOs are member-owned communities with their main characteristic being that there is no centralized management. The organization’s rules and mandates are designed around code and tokens for governance.

KlimaDAO has positioned itself as a leading blockchain organization that uses new incentives and mechanisms to deal with climate change.

DAOs are not exclusive only to the blockchain markets, where DAOs will often partner with traditional industry powerhouses to support joint initiatives. Organizations such as SCB Group, a traditional high-impact, low-carbon project developer, is a world-leading low-carbon company with a portfolio of established global carbon project developments. Their commitment to technical expertise for project financing, planning community-led developments and evaluations are necessary attributes that give businesses the confidence to verify and purchase carbon offsets through their funnel.

KlimaDAO, in collaboration with SCB Group, has recently ratified USDC 250,000 from the Treasury to support the development of the improved cooking stove project in Bangladesh.

Improved Cookstoves project in Bangladesh in collaboration with SCB Group. Image by KlimaDAO

Originally started as one open forum which lasted 3 months in community discussion, the KlimaDAO community voted through their community token ($KLIMA) to fund this development. The financing ensures a future delivery of GS methodologies (Gold Standard – Voluntary Carbon Market Registry) carbon credits, with reserves coming directly from KlimaDAO’s management fund. These transfer credits under the EEIMP carbon standard are focused on, among other things, climate action, good health and well-being as well as affordable and clean energy.

Earth.Org recently highlighted the dangers of gas stoves, and how a transition to energy-efficient stoves can be feasible and is a necessity to keep the environment sustainable. The main argument in the problems associated with gas stoves are the effects on the respiratory tract, which are particularly aggravated in small living spaces.

It is estimated that less than 20% of households within the Bangladeshi population (about 35 million people) have access to clean food. Energy efficient, smokeless cooking stoves (known locally in Bangladesh as Chula), help to solve environmental problems associated with polluting stoves that have open flames in the household. Also known as “friendly cooker” in the native language, these cleaner home cooking measures represent an important aspect of carbon financing which subsidize 50% of the costs of installing the stove.

As it says in community forumthe improved smokeless cooking stoves burn wood more efficiently, causing less environmental impact from the extensive harvesting of wood for cooking in the forest area around the camps.

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Project benefits

According to the World Health Organization (WHO), approx 3 billion people worldwide still use inefficient open hearths or traditional stoves fueled by biomass or coal for cooking.

The KlimaDAO + SCB Group initiative will first focus on the Rohingya refugee camp in Bangladesh. Measures of the legitimacy of this initiative are also aided by improving the maturation of carbon finance markets. A site visit in November 2022 by a senior SCB management partner laid the necessary foundation for the feasibility of the proposal.

Through live community updates directed at KlimaDAO and related parties, there was a constant source of information and verification to ensure that the initiative provided the right benefits to the community. These are examples of the legitimacy of traditional carbon actors using the efficiency of distributed communities and blockchain projects to better implement transparency.

Not only on the transparency front, but the measurement of economic maturity is also a big improvement. As with all projects of this magnitude, the initiative will undergo a gold standard registration and will lead to at least one million metric tons of CO2 reduction over a five-year period.

As voluntary carbon markets continues to grow, companies will find more and more that the vintages and offsets they bought will also have designs and benefits that blockchain communities can confirm. Already through SCB in collaboration with the Bangladesh Bondhu Foundation – a local non-profit organization focused exclusively on public goods – around 100,000 cooking stoves were distributed in 2022, and more will be issued in early 2023. The risk reductions in the delivery of these carbon credits by both SCB and climate exists here.

Through this initiative, we see a trifecta of working partnership between SCB Group, KlimaDAO and Bangladesh Bondhu Foundation. In this work dynamic, a market-practical approach is aided by society’s incentives in line with altruistic principles.

KlimaDAO is convinced in their belief that chain markets and an economic, practical approach to dealing with climate change will be the key to readjusting society on the green path. Their partnership with traditional incumbents demonstrates their willingness to embrace innovation as an absolute necessity to address climate change.

The fact that the stove initiative in Bangladesh was established through a community referendum shows the collective power an incentivized community can have in public goods. It is argued that there will be more the demand in the carbon markets than the availability to meet it. Therefore, it is imperative that we find and support the most effective approaches to making our planet more sustainable, as it is very likely that the key to solving the climate crisis will come from a collective societal approach. Blockchain technology has so far proven that it can cut across all fronts of this trifecta spectrum.

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