Carbon credits and HWTS: a viable green funding mechanism? A webinar held in July 2012 Summary note of presentations and discussion

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1 Carbon credits and HWTS: a viable green funding mechanism? A webinar held in July 2012 Summary note of presentations and discussion Webinar Overview Carbon credits and carbon markets are a component of international attempts to mitigate the growth in concentrations of greenhouse gases in the atmosphere and thereby slow the climate change phenomenon. Household water treatment (HWT) and clean cook stove implementers have recently tapped into carbon markets to finance the delivery of their programs, on the basis that HWT and clean cook stove projects can reduce carbon dioxide emissions. In July 2012, the International Network on Household Water Treatment and Safe Storage hosted a webinar to provide an opportunity for Network members to learn more about the topic from three presenters and hear examples of implementation. The objectives of the webinar were to: (1) Provide an overview of how carbon markets function; (2) Identify methodologies for linking HWT to carbon based funding; and (3) Highlight the main considerations in utilising carbon finance. This note provides a summary of what was learned in respect of the three objectives, an overview of the three presentations and key issues and questions raised. 1 All webinar materials, including the agenda and presentations are available online at: Background Carbon dioxide and other greenhouse gas emissions are generated through the consumption of fossil fuels, their derivatives and other non renewable biomass, which includes gasoline, kerosene and wood. Such greenhouse gases have been shown to contribute to warming of the Earth s atmosphere, known as the climate change phenomenon. Global efforts to combat climate change began with the United Nations Framework on Climate Change in This international environmental treaty set out the principles for a legally binding international agreement to reduce greenhouse gas emissions and resulted in the Kyoto Protocol in 1997 which was signed by most of the world s countries. The Kyoto Protocol set maximum emissions targets for industrialised countries and introduced three mechanisms that would enable them to meet their targets: Emissions Trading, the Clean Development Mechanism and Joint Implementation. Emissions Trading formalised the creation of the carbon credit as a tradable commodity on international financial exchanges. The Clean Development Mechanism and the Joint Implementation set rules for the generation of carbon credits through approved projects implemented in developed and developing countries. Together, these three mechanisms led to what is now called the carbon market. 1 This note was prepared by Ryan Rowe of the Water Institute at UNC (ryanrowe@unc.edu) and released to participants of the International Network on Household Water Treatment and Safe Storage in January

2 Objective 1: Two types of carbon markets A carbon credit represents one unit of carbon dioxide or other greenhouse gas and is generated when a project produces emissions below its regulated allowance. This excess capacity or credits can be sold on the carbon market to buyers whose projects produce greenhouse gas emissions in excess of their legally allowed limit. This market based approach attaches a financial cost to carbon emissions and provides an economic incentive for investing in cleaner methods of production and consumption. Carbon markets exist in two forms: voluntary markets and compliance markets. Although both marketbased mechanisms, they differ in that a voluntary market is unregulated and a compliance market is a government run initiative. The voluntary market is based on voluntary certification of emissions reductions, for which Gold Standard certified credits are considered to be of the highest grade and fetch a premium over credits which have not had their quality or validity ascertained. Carbon credits generated for sale in the voluntary market are known as Voluntary Emission Reduction units (VERs) and anyone can participate. The voluntary market can be accessed through an exchange such as the Chicago Climate Exchange. The compliance market emerged from the Kyoto Protocol. Examples of compliance markets include the European Union Emissions Trading System and the United States Regional Greenhouse Gas Initiative. Carbon credits generated for sale in the compliance market are known as Certified Emission Reduction units (CERs) or Emission Reduction Units (ERUs) and can also be sold in the voluntary market. The compliance market has an estimated total annual volume of US$140 billion 1000 times the volume of credits traded in the voluntary market. Objective 2: Three methodologies for linking HWT activities to carbon funding Currently, there are three methodologies under which HWT projects can generate carbon credits. The first methodology, the Gold Standard, is a large scale voluntary market methodology. There is no cap on the number of credits which can be generated, making it attractive to initiatives such as Vestergaard Frandsen s Carbon for Water project which has distributed 900,000 filters in Western Kenya. Obtaining Gold Standard certification can be a complex process. 2 The second, AMS III.AV, is a small scale compliance market methodology which may be used by projects employing HWT that meets either the interim performance target as per the World Health Organization (WHO) performance recommendations forhwt options (WHO, 2011) or a comparable national standard. AMS III.AV is a Kyoto Protocol Clean Development Mechanism initiative and generates CERs. This methodology has a standardised approach and could be the most attractive option for most HWT implementers. 3 A third, AM0086, is a large scale compliance market methodology developed by the Indian firm Hindustan Unilever for its own purposes. AM008 is also a Kyoto Protocol Clean Development Mechanism initiative and generates CERs. This methodology has a very specific applicability and may not be useful to most HWT implementers. 4 Conditions apply to the generation of carbon credits under such methodologies. For more information refer to Mr Roman Schibli s webinar presentation or directly: r.schibli@southpolecarbon.com. 2 Learn more about Gold Standard: content/uploads/2011/10/gs_110411_tpddtec_methodology.pdf. 3 Learn more about AMS III.AV (v3.0): 4 Learn more about AM0086 (v2.0): 2

3 Objective 3: Considerations in utilising carbon finance Improved financial sustainability and potential for scale Income generated from carbon credits provides a potential income source to implementing organisations (including government agencies), mitigating the challenge of continuously fundraising for program activities. This could enable organisations to scale up operations or increase focus on vulnerable populations who are unable or unwilling to pay for HWTS but for whom benefit is greatest. Technology performance Under methodology AMS III.AV, HWT options seeking carbon credits for sale in the compliance market (ie through the Clean Development Mechanism) must meet at least the interim performance target as per the WHO performance recommendations for HWT options (WHO, 2011). Th Impact on local business Webinar participants raised concerns about the impact of private firms and NGOs placing large quantities of foreign manufactured HWT products into local communities to take advantage of carbonbased funding. They noted an influx of foreign product could disrupt local filter manufacturers. Although local organisations may also take advantage of carbon based funding, their capacity and resources to initiate the process may be limited. Cost and complexity of certification Certifying projects for carbon credit generation is a complex and costly process. Several steps must be followed prior to the issuance of a CER that could be sold in the compliance market. Activities include documentation, approval, validation and ongoing monitoring and evaluation. The total cost of that process can reach between 100,000 and 150,000 Euro. South Pole Carbon has developed a platform through which project certification costs could be substantially reduced. Please refer to slide #10 of Mr Roman Schibli s presentation for further details. Suppressed demand The Kyoto Protocol s Clean Development Mechanism provides for the concept of suppressed demand and specifically with respect to HWT projects. Suppressed demand assumes that in an area where there is no public distribution network supplying safe drinking water, households may not treat their water due to low income levels or technology issues. For example, a family may not be able to afford the fuel needed to boil drinking water but as income increases it is assumed they would take up the practice. If the practice of boiling depends on the use of non renewable biomass or fossil fuels, then providing an alternative (such as solar disinfection or a ceramic water filter) can contribute to reduced emissions. In addition, a minimum daily quantity of drinking water provides a baseline figure around which to make an estimate of suppressed demand (therefore, suppressed emissions) beyond current demand (current emissions). In such a way, suppressed demand allows a project to earn carbon credits for both suppressed emissions and avoided emissions thereby improving financial viability. Several webinar participants raised challenges to the concept. First, it was noted that in many countries and particularly in African countries, boiling is not a common household water treatment practice. Secondly, participants claimed that there is limited evidence that the practice of boiling increases with economic development or higher income levels. Finally, it was noted that estimating suppressed demand for boiling water is subject to various assumptions and contextual factors. 3

4 Speakers Webinar presentations available online at: Mr Roman Schibli is a consultant with South Pole Carbon, a Swiss firm focused on developing carbon emission reduction projects. Roman has worked on projects in Africa and the Middle East in a variety of sectors: water, energy and waste management. More recently, Roman has been involved in setting up an international platform to enable HWTS projects to access financing in the carbon market. Roman can be contacted at r.schibli@southpolecarbon.com. During his presentation, Roman explained how HWTS can be financed using carbon credits, arguing that it provides a more sustainable and alternative model to donor funding. He discussed the concepts of avoided emissions and suppressed demand. Roman provided an overview of three methodologies through which HWTS projects can generate credits. One of the critical drivers of carbon credits for HWTS is the assumed (or measured) baseline level of the household practice of boiling drinking water prior to consumption. A key barrier is the high cost of certifying projects for carbon credit generation. South Pole Carbon developed a platform, known as a Program of Activities, to allow HWTS projects to consolidate their efforts and more easily access financing through either the compliance or the voluntary markets. Dr Regula Meierhofer is an environmental scientist with the Department of Water and Sanitation in Developing Countries at Eawag, the Swiss Federal Institute of Aquatic Science and Technology. Regula focuses on the development and evaluation of technologies for household water treatment, and in particular effective strategies to promote solar water disinfection (SODIS) and gravity driven membrane filtration. Regula can be contacted at regula.meierhofer@eawag.ch. Regula discussed a gravity driven membrane filter project developed under AMS III.AV, a compliance market methodology. Filter use is promoted in collaboration with NGOs, community based organisations, entrepreneurs and health workers. She stressed that in order to be eligible for carbon credits, the HWT option must meet WHO performance t. Project monitoring activities included a baseline study, continuous monitoring and data collection methods. Regula also presented scenarios illustrating the impact on financial viability of a changing price for CERs. Ms Tara Lundy works in the Climate Business Unit at Vestergaard Frandsen, the Switzerland based manufacturer of the LifeStraw water filter. Tara is responsible for identifying new technologies and developing new programs that address environmental sustainability, health and development. She also plays an integral role in the management and operations of Vestergaard Frandsen s Carbon for Water Program in Western Kenya. Tara can be contacted at tal@vestergaard frandsen.com. Tara described Vestergaard Frandsen s Carbon for Water (CfW) Program in Western Kenya, through which LifeStraw Family filters are provided to households with the aim of improving drinking water quality and avoiding carbon emissions from boiling. Key program activities include behavior change communications, school based promotion, the establishment of locally based service centers to maintain the filters and periodic surveys to monitor use. Vestergaard Frandsen reported that 83% of households report using the filter twice a week and that an initial health impact study (not yet published) has shown a decrease in the odds of diarrhoeal disease. Over the program s period of implementation, Vestergaard Frandsen expects to recoup its initial investment of US$30 million and make a profit. The company is considering launching similar programs in Indonesia, Myanmar, Rwanda and Bangladesh. The program is certified under the Gold Standard and carbon credits generated can be sold in the voluntary market. 4

5 Questions & Answers Q. Is there a simpler and faster process for voluntary projects, especially small scale projects, using methodologies and lessons learned from the compliance market? A. By Roman Schibli: There are special procedures for so called micro scale projects under the Gold Standard (a voluntary market methodology). Micro scale projects are projects with emission reductions below 10,000 tons per year. Special provisions for micro scale projects also exist under the Clean Development Mechanism (a compliance market methodology). A. By Tara Lundy: The Gold Standard process (voluntary) for program development and registration does take time but is designed to efficiently evaluate a program without compromising rigor in terms of program integrity, baseline measurements, local stakeholder engagement and meeting sustainability criteria required of all Gold Standard programs. Comparatively, the Gold Standard process requires less time than the compliance market. In addition, micro scale projects that include less than approximately 10,000 households are further streamlined and have significantly shorter timeline to registration. I would suggest checking with the Gold Standard Foundation ( directly about this. Q. Has anyone looked at the risks of carbon finance in comparison to other funding options? A. By Roman Schibli: I am not aware of a specific study for HWTS projects, but there s extensive literature on the risks (and opportunities) of carbon finance in general. See for example this link: Q. How can a company with a water treatment technology form a partnership with a registered company to benefit from carbon credits? A. By Roman Schibli: Suppliers of HWTS technology could enter into agreements with a carbon developer. This is commonly the case for cook stove developers. Q. We sell water filters in Indonesia with some success, many of our consumers previously boiled their water but mostly using kerosene or renewable wood sources. Can these filters still get carbon credits? A. By Tara Lundy: Yes. A. By Regula Meierhofer: Great news is that the 3rd revision of the CDM methodology AMS III.A.V. (Version 3.0) has recently been accepted by UNFCC. The new methodology requires that project technology achieves compliance with a) at least the interim performance target as per the WHO performance recommendations (WHO, 2011) or b) an applicable national standard or guideline. In other words, this means that projects that promote ceramic filters can be submitted under this methodology (and obtain carbon credits). Under the previous Version 2.0, HWT options had to meet at least the protective WHO performance target. Q. What are the implications for locally manufactured filters if a company, such as Vestergad can distribute 1,000,000 units for free? A. By Tara Lundy: In the area that Vestergaard Frandsen distributes its filters (Western Province, Kenya), there was not an existing market of size for water filtration technologies to be disrupted. The penetration of any water treatment in general was low (boiling was the highest at around 30% while other treatment 5

6 methods were reported in some areas but were not province wide nor widely adopted across communities). Given the time and complexity that would be necessary to grow the local market to achieve equitable distribution among the population, regardless of economic status or other demographic characteristics, Vestergaard Frandsen felt it important to target universal coverage of the population (more than 90% without access to safe water). This planning and program implementation was done in close partnership with the Government of Kenya and designed with a primary goal of reducing the water borne disease burden in the region, which was increasing. Q. Thanks to all the presenters. I think there's potential here, but we have to be robust and ensure that we are actually making a difference. Aside from the issue of suppressed demand, I think there are still 2 major outstanding questions that would be good to explore further 1) are these schemes actually financially viable? There are many risks related to the carbon market (not least price) that are not adequately explained. I have not yet seen a sufficiently robust financial breakdown, so would be great to follow up with Tara et al. 2) The actual social benefits are not clear either as mentioned earlier (Boisson et al, 2010), there is evidence that although 'usage' is technically high, untreated water is still being used, so it needs to be part of a more holistic approach. And how does this approach impact upon domestic supply chains? A. By Tara Lundy: There are a variety of factors that need to be figured into a financial analysis in order for a group of financiers to move forward on a project. Not every country has similar parameters that make carbon funded water projects viable (for example, differences in the fraction of non renewable biomass (fnrb) rates), and different markets and methodologies can also affect financial performance. For that reason, each proposed project likely needs to be evaluated individually to evaluate financial viability and risk. It is also true that the current state of international carbon markets including CDM has changed in the last year and do carry more risk and lower prices than we have historically seen. Like all funding or financing mechanisms, there is risk that prices will fall or in the example of grant funding that program funding will be changed or not be renewed at the end of a grant cycle. As is the case in development projects, risk is mapped and managed. The market prices have changed and will continue to do so and carbon programs will work with market mechanisms and emissions reduction purchase agreements structures to mitigate this risk and maintain program activities. The benefit of this financing mechanism however, is that it does not pull from public funding and is structured to be sustainable over a longer time than most other sources of development financing. A. By Tara Lundy: In answer to your second question, there is a wide and varied body of evidence available about the efficacy of HWTS in general and LifeStraw specifically. For that reason, I will not produce a literature review in this forum, because I think the academic community that has been looking into HWTS and promoting it, has more to say about the social impact. In terms of LifeStraw specifically, I will point to a new study Assessing Water Filtration and Safe Storage in Households with Young Children of HIV Positive Mothers: A Randomized, Controlled Trial in Zambia, published in PLoS ONE (Peletz et. al, 2012). This study reported similar results of usage and acceptability to that of Vestergaard Frandsen s program in Kenya and included water quality testing to align reported usage and water quality. Like the program in Western Kenya, study utilized health education around safe storage and training, which may be a key differentiator in the user acceptability. In response to the question about domestic supply and disrupting local investments in safe water infrastructure; the LifeStraw program was designed in close partnership with the Government of Kenya and 6

7 is aligned with the Kenyan development strategy Kenya Vision During program planning, prior to implementation, it was discussed that the government was working on a 10 year timeline to get piped water to Western Province. This is why our program registration was done for a period of 10 years. We see that point of use technologies and programs are complementary to infrastructure investments and should be implemented in parallel to meet short run, medium run and long run needs for safe water. Investments in pipelines should not be delayed but at the same time, the communities in Western Kenya should not be denied access to safe water while they wait for the infrastructure to be built. Q. Presentation materials from three presenters show current situations of water supply project developments with CDM schemes of Kyoto Protocol. The presentation contents show advancement in these fields and interesting. I would like to know whether any introductions of integrated approach of water and sanitation or water supply and wastewater treatment into these development movements. CO2 emissions can make the investments possible in these fields. For wastewater, I think, we should estimate pollutant discharge as well as CO2 emission. This is because pollutant discharge reduction contributes to improvement of ambient water quality environment and hygiene health. This is especially important when we consider the MDGs targets goal for For Regula, what is the difference of slides #11 and 12 (Calculation of Carbon Revenue Models)? For Roman, what is the reason for no project having used AM0086? For Tara, on slide #5, which shows water consumption by district, what does the y axis show? Is that litres per day or or per week? (slide #7 may show the unit is L/p/d.) A. By Regula Meierhofer: The difference between slide #11 and slide #12 is the price per carbon credit. On slide #10, the price for a Voluntary Emission Reduction unit (VER) is 10 Euro. On slide #11, the price for a Certified Emission Reduction unit (CER) is 3.5 Euro.. A. By Roman Schibli: As a general comment, carbon finance is also available for wastewater treatment projects which avoid and/or use methane emissions from wastewater treatment. As for the AM0086 methodology, it is very complex and very specific for the technology of Hindustan Unilever. In the meantime, the first project using AM0086 has been started. Learn more at: A. By Tara Lundy: The 5th slide also shows L/p/d (taken as an average per district). Q. What are the baseline carbon reduction levels that can be assumed per person? I.e. what level of CER / VER can be earned per person when they are provided with clean water under your Program of Activities? A. By Roman Schibli: As demonstrated by Regula Meierhofer, a family of five can reduce their emissions by roughly 2 tons of carbon dioxide per year. This value is only indicative and depends on the local situation. Q. What is the cost of your shared Programme of Activities? What charges do you make, set up and % of ERs? A. By Roman Schibli: We ask for an upfront commitment fee and then take a % of issued emission reductions. The exact numbers depend on the project characteristics. If you have questions, feel free to contact me directly. r.schibli@southpolecarbon.com. Q. I'm concerned that the assumptions behind the baseline are flawed. In most cases people don't boil water and boiling water is not appropriate as a baseline. A piped system or better quality sources or hygiene education would be more appropriate baselines. This means that your methodology overestimates the 7

8 suppressed demand. What are your assumptions on carbon prices and the carbon market as a whole? The financial viability depends on these critical issues. A. By Roman Schibli: The Clean Development Mechanism methodology AMS III.AV excludes areas which are connected to a piped system, so unfortunately that would not be an appropriate baseline for AMS III.AV. The outlook for the compliance and voluntary markets are quite different: while the compliance market is very depressed, the voluntary market is holding up nicely. This presents an opportunity for HWTS projects. Q. There is absolutely no evidence that boiling becomes what Roman calls the "baseline scenario" as communities develop economically. There is evidence that economic development leads to an increase in access to improved water supply sources. A. By Roman Schibli: The evidence that I know of (Rosa & Clasen, 2010) clearly shows that boiling is the most widely used adequate HWTS technique worldwide and among the most popular also in Africa (together with using bleach). Q. Please advise on a more simpler way of submitting proposals for carbon based funding, based on the lessons learned to date. A. By Roman Schibli: Please refer to Q1. For further questions, I would be happy to discuss the different methodologies. I can be contacted by at : r.schibli@southpolecarbon.com. Q: On what basis did you calculate 1.97tCO 2 e per filter per year? What is the evidential basis for this? A. By Regula Meierhofer: The CO 2 reductions are calculated on the basis of the actual energy consumption required to boil the corresponding amount of water locally. Factors to be integrated into the calculation are the type of energy used for boiling (f.e. electricity, char coal, wood etc.), if wood is used it needs to be documented if the wood originates from sustainably operated sources or the local deforestation rate needs to be assessed, type of ovens used and local climatic conditions. Our calculations are based on the actual data collected in the project area in Uganda. Q. You mention that ceramics and biofilters are not eligible as they don't meet the required standard? A. By Roman Schibli: At the time of the webinar, this was indeed the case under AMS III.AV Version 2.0. HWT options were required to meet the protective performance target of WHO. However it has since been updated to Version 3.0 and they are now accepting HWT options which meet at least the interim performance target as per WHO performance recommendations (WHO, 2011). The Gold Standard (a voluntary market methodology) does not mention a specific level of performance for an HWT option but it needs to be demonstrated that the water is safe for consumption. Q. Why assume 10 Euro as the price of a Voluntary Emission Reduction unit (VER)? What is this based on? Do you have willing buyers at this price? A. By Regula Meierhofer: The price depends upon the buyer s willingness to pay. I assume it is possible to find voluntary buyers for this price level, but we have no experience about the volumes for which those prices can be obtained. Buyers appear to be more interested in supporting a project if they can achieve an additional social impact (e.g. improving access to safe drinking water). 8

9 Q. We have seen projections for CER price developments that suggest that CER prices (currently at 2.5 Euro) will increase to about 6 Euro by It is unlikely that there will be volume constraints for CERs. Q. You refer to sales and distribution of filters. Is the cost of the filter subsidised for the consumer or do they pay the full price? What is the full price? Do you offer consumer credit for payment over time? A. By Regula Meierhofer: In our experience, consumers at the bottom of the pyramid will not be able to pay the full price of a membrane filter. We are planning to sell the filters for a subsidised price whereby the subsidy would be funded through the carbon credits. We are planning to experiment with price ranges probably somewhere between 15 and 18 USD and payment schemes that will allow people to pay in installments. Q. Please discuss the high cost associated with distribution and household training as it relates to the scalability of these projects. What percentage of targeted households adopt the product? A. By Regula Meierhofer: Our experiences have shown that consistent water treatment behavior will only take place if a careful behavior change intervention has been implemented. Such an intervention contains a broad range of activities including repeated and direct contact with each individual household. For this, implementation costs are relatively high. Simply distributing filters will not do the job! Therefore, the question should not be what percentage of households adopts the product (i.e. is there a filter physically present in the household) but what percentage of HH is regularly and consistently treating their water. Q. How long will the service centre provide free replacement? what happens after the project? A. By Tara Lundy: The service centers will provide free repair and replacement throughout the life of the project (10 year period). This project registration period was chosen in collaboration with the Ministries of Health and Public Health and Sanitation in Kenya. After the 10 year project cycle, it was estimated that the government at that point would have provided accessed to piped water infrastructure in Kenya. Q. What is the carbon cost of production of the filter and how is this off set? A. By Tara Lundy: The estimate of carbon emissions associated with production of the filter, production of the membrane and transportation of the filter was calculated and is taken into account when carbon credits are issued. In effect, we retire or take a discount on the volume of credits that are produced and sold to offset the emissions we create producing and moving the filter to the households. Q. These audit numbers are much higher than those observed in the 2010 study of the LifeStraw Family in Congo DRC (Boisson et al, 2010). A. By Tara Lundy: As was discussed during the Webinar, this study was operating in a different country context, and education and training messaging and follow up differed quite substantially from the program in Western Kenya. Some key examples are that in the DRC study, children were discouraged from filtering and people were taught to filter water directly into drinking glasses. In Western Kenya, we have seen that school children are high adopters of the technology. We also encourage filtering into a safe storage container, which allows storage of much higher quantities of filtered water and enhances the user acceptability. (The flow rate is too slow to filter each time one would like to drink). In addition, a recently published Clasen RCT of the LifeStraw Family in Zambia, shows similar usage rates to the Kenya program (Peletz et al, 2012). 9

10 Q. Is there any new mechanism under development for "crediting health", instead of emission reductions? Something like "certificates" for certain level of health ensured. A. By Tara Lundy: While there is no official new mechanism to credit health outcomes, there is a wider discussion within the results based financing sector about more specifically tying performance to achievable health outcomes. There are certainly lessons that can be applied from the carbon finance sector to the health sector in terms of establishing methodologies and monitoring and auditing guidelines to standardize and certify outcomes. The Carbon for Water program is engaging in several case control studies to look at health impact, and once results are finalized is looking to leverage these achievements to further catalyze this type of discussion. Q. Regarding compliance, is the 91% of household in possession of LSF doing self reporting? A. By Tara Lundy: The survey data from the program does rely on self reporting. This is generally the method being used in most evaluations of HWTS including the academic studies that have been cited in this discussion. The program does go through an intensive auditing process in which the survey results are independently verified by both a local Kenyan agency and an international UNFCCC accredited auditor. This is mostly for lack of a viable alternative that can be implemented cost effectively, although there are recent developments, particularly of note out of SweetLabs at Portland State University to, monitor actual usage through sensors. At this point, the sensors are quite pricey, but this could be a valuable tool for future programming. Q. What was the sample size for the VF survey [of households that boil]? A. By Tara Lundy: The sample size was 108. The Gold Standard methodology specifically calls for a sample size of 100 for programs of this size, so this was done in compliance with the Gold Standard Foundation. Q. On suppressed demand, there is no evidence (at least for Africa) other than what Tara is saying they conducted as part of their surveys that demand for boiling or the actual practice of boiling would increase with economic development. There is no evidence that exists for this. What does exist is that people gain increased access to improved water sources but not that they boil those sources. A. By Tara Lundy: Both the Gold Standard and Clean Development Mechanism methodologies that allow for water projects expressly recognize the concept of suppressed demand and allows its use in an effort to promote what is both and environmental and a public health intervention. From a pure public health perspective, even improved water sources such as springs, boreholes, and pumps can become microbiologically contaminated at the source or when the water is transported to the home. Therefore, point of use treatment becomes important, as the HWTS community has argued, in providing enhanced protection against water borne illness. Thus, in communities where point of use treatments are not available or there are financial constraints to obtaining them, boiling remains an important option for households to ensure their drinking water is safe. By replacing this need to continue to or to take up boiling with a cleaner technology, we are removing what would otherwise be an important demand for treating drinking water. As economies develop, and with increased education about the health implications of drinking safe water, we have seen populations achieve high rates of boiling for drinking water in such places as Indonesia. 10

11 References Boisson S et al. (2012). Field Assessment of a Novel Household Based Water Filtration Device: A Randomised, Placebo Controlled Trial in the Democratic Republic of Congo. PLoS One, 5(9). Available at: Peletz R et al. (2012). Assessing Water Filtration and Safe Storage in Households with Young Children of HIV Positive Mothers: A Randomized, Controlled Trial in Zambia. PLoS One, 7(10). Available at: Rosa, G. & Clasen, T. (2010). Estimating the Scope of Household Water Treatment in Low and Medium Income Countries. American Journal of Tropical Medicine & Hygiene, 82(2): Available at: WHO. (2003). Domestic Water Quantity Service Level and Health. Geneva, Switzerland, World Health Organization. Available at: WHO. (2011). Evaluating household water treatment options: Health based targets and microbiological performance specifications. Geneva, Switzerland, World Health Organization. Available at: l. 11