Selling Offsets By Mobile Phone in Ethiopia

Small farmers near Bahir Dar, Ethiopia, are testing a carbon offset market facilitated by mobile phones.
Small farmers near Bahir Dar, Ethiopia, are testing a carbon offset market facilitated by mobile phones.

NYT, Wednesday, 28 October 200, By Jeffrey Marlow

One of the most daunting hurdles for the trade in carbon offsets is the logistical challenge of connecting customers — typically carbon dioxide emitting companies based in America or Europe — with offset producers in places like South America, Asia, and Africa.

With the help of an innovative new program developed by Veli Pohjonen and the Finnish Ministry for Foreign Affairs, however, this global interaction may soon become as easy as sending a text message.

Many carbon trading efforts have struggled because of their cumbersome administration and multiple middle men, Mr. Pohjonen said — adding that they have “not led to anything remarkable in the combat against climate change.”

Under Mr. Pohjonen’s system, small Ethiopian farmers, for example, would measure the diameters of trees on their land twice a year and put the information into a text message, which, along with each farmer’s unique identification code, is then sent to the regional Watershed Users’ Association office.

Software computes the amount of carbon stored on each farm as well as the change from the previous measurement; any increase in stored carbon dioxide is converted into cash using the going rate of CO2 on international markets, and farmers are paid by their local association.

Major challenges remain, of course. Not least: keeping farmers honest and verifying the data they report, a hurdle that would almost certainly demand at least some of the administrative overhead that Mr. Pohjonen aims to avoid.

And the computer modeling used to calculate the amount of CO2 absorbed by stands of trees — a blunt tool at the moment — would need to be calibrated to account for the idiosyncrasies of Ethiopian ecology, and later, to those of other regions that might use the tool.

But finding more efficient ways to connect remote carbon offset projects to a faraway industrial world increasingly hungry for them is, to Mr. Pohjonen, the first hurdle. “Transaction costs can be minimized in another manner,” he said, “rather than just making projects bigger.”

Mr. Pohjonen’s son Matti, a Fellow in Digital Culture at the University of London’s School of Oriental and African Studies, has been overseeing the technology end of the project.

“The standard function of a mobile phone is talking and texting,” the younger Mr. Pohjonen said. But it can also be used, he added, to access the Internet and run queries regarding carbon prices or exchange rates.

The Pohjonens have been testing the system on eight farms in the country’s central highlands, where the average farmer is earning approximately 1000 Birr, or $80, every six months from their carbon offsets.

“In the Ethiopian context it is considerable money,” says Mr. Pohjonen. “It would give an added value of 10 to 20 percent compared to what he would get selling the trees as poles.”