Starting with the original GRAPHS cohort, my group has been interested in the determinants of household- and community-level barriers to transitions to cleaner cooking and to policies and business models that can overcome those barriers.
With support from Columbia World Projects, and in collaboration with along with Kelsey Jack from UCSB and Kwaku Poku Asante from KHRC, I co-lead the Combatting Household Air Pollution with Clean Energy Project (CHAP). CHAP is significant effort to assist the government of Ghana in its objective to secure access to clean cooking for lower income Ghanaians.
The CHAP Project was designed in two phases: an assessment Phase that elicited novel insights into the barriers to clean household energy transitions, an intervention Phase that seeks to test large-scale interventions informed by Phase I findings.
A key finding from our Phase I research is that charcoal users who purchase fuel spend about per capita as much as LPG users but purchase small amounts of charcoal at a high frequency. This is most pronounced for the poorest consumers, who purchase charcoal daily and forgo bulk discounts enjoyed by charcoal users who buy larger quantities. Our data suggest that, for these charcoal users, the main constraint on LPG use is not the overall cost but rather the challenge of saving up for a full cylinder (i.e., a liquidity constraint).
This of course is the same observation that led to pay-as-you-go regulators as used by Circle Gas, etc. Our analysis of that business model suggested that the combination of increased costs (due to the fancy regulator) plus the inventory costs implied by the fact that the gas company must carry all the unused LPG in consumers’ homes, means that this is a very hard model to operate without ongoing subsidies (donor financing, etc.).
We instead chose to explore the potential role of a digital payments system – GasPay – with two core built-in financial services aimed at addressing this liquidity constraint. Building on Ghana’s well-developed mobile money infrastructure, GasPay provides consumers with a dedicated LPG savings account with rewards that are designed to incentivize frequent small deposits that mimic charcoal expenditure patterns. Second, GasPay provides a small line of credit to established users who may need a new cylinder but haven’t quite saved enough (or, equivalently, it allows them to carry a negative balance on their savings account).
In addition to these financial services, the platform provides useful features including granular data on LPG use, a platform for targeting subsidies, and inventory management + cylinder tracking for LPG marketing companies.
All this was built by Rancard, a Ghanian software developer, and the financial services back end is powered by Zeepay, a Ghanaian mobile money provider that has all the regulatory approvals to hold consumer deposits, etc. As of May 2024, testing is underway in Techiman in central Ghana.
