Rarely do you find a business that attacks two big problems–global poverty and climate change–at the same time.
This week, I came across two such ventures. As it happens, they have a lot in common: Both operate in East Africa, both work with the very poor, both were started by executives who came out of the fossil-fuel industry and both are made possible by 21st century cutting-edge technology.
One is called TIST, which stands for The International Small Group and Tree Planting Program. (You can tell it wasn’t started by a marketing guy.) TIST organize small groups of farmers to plant trees, make money from global carbon markets and reverse the devastating effects of deforestation in Tanzania, Kenya, Uganda and India. It’s been operating for less than a decade but has signed up a remarkable 65,000 farmers.
“It’s growing on its own by 50 to 100% a year,” says Ben Henneke, a veteran energy executive who started TIST after visiting Tanzania on a church mission back in 1998.
The other is Dissigno. A San Francisco-based startup, Dissigno operates a power and lighting project in Tanzania that provides villagers with battery-powered LED lights that are recharged with solar power. The company, which also has solar businesses in the U.S. and Czechslovakia, has big plans, hoping to expand its power and lighting business to Ethiopia, Botswana and South Africa.
“There are 1.6 billion people around the world who don’t have power,” says Gary Zieff, a founder of Dissigno. “That’s a business opportunity for us.”
I met Henneke and Zieff at an energy and climate conference organized by Center for Sustainable Enterprise at the Kenan-Flagler business school at the University of North Carolina. Next week I’ll tell you about another entrepreneur who spoke at UNC about his plans to bring high-altitude wind power to the global south. Since I spend most of my time writing about big companies and the government, it’s great to connect with entrepreneurial energy.
TIST traces its origins to a service at an Episcopal church in northern Virginia where parishioners including Ben Henneke and his wife, Vanessa, were encourage by the rector join in a service mission. As Henneke recalls, Vanessa whispered to him: “Maybe we’re supposed to go to Africa this summer.” He replied: “I hope you have a nice time, dear.” Six months later, they found themselves in Tanzania, and they were astounded by what they saw. People were poor even by the standards of Tanzania, where annual per capita income is about $440 a year.
“Here were their intelligent, resourceful, hard-working people, and they had a cash income of under $25 a year,” Henneke says. “If you needed school fees, which were $10, that was 40% of their cash income. We had a friend whose child died of Malaria because they couldn’t afford the medicine. People had to be tremendously innovative just to stay alive.”
Henneke, who is 63, had graduated from Yale in 1968 (the same year as George W. Bush) and Harvard Business School, and like the former president, got involved in the energy business, doing coal deals, working in biofuels and during the 1990s getting deeply involved with developing emissions trading systems as part of both the 1990 Clean Air Act and what would become the Clinton administration’s cap-and-trade proposal that became part of the Kyoto Protocol. His experience led him to wonder: “How do we get money back to these really hardworking farmers who have half an acre to two acres of land from this complicated business called the carbon market?”
He began by creating TIST as a project of a project jointly implemented by the Institute for Environmental Innovation (I4EI), a nonprofit based in Tanzania, and the Clean Air Action Corporation (CAAC), his own company, which helps governments and businesses curb air pollution. Then he persuaded Ontario Hydro, a Canadian utility, to finance a pilot project in Tanzania for submission to UN regulators as part of a program called the Clean Development Mechanism, or CDM, which allows regulated emitters of greenhouse gases to offset their emissions by financing projects in the developing world. (For more on CDM, see my 2008 FORTUNE story, Carbon Finance Comes of Age.) It took nearly six years and $8 million of investment to get the tree-planting program approved, but once the methodology got the OK from the UN, TIST was off and running.
TIST has since been funded by an array of companies, governments and nonprofits, including a big European hedge fund, the U.S. Agency for International Development, the Dow Foundation and private donors. (You can buy your own offsets from TIST on ebay.) Farmers are paid depending on how many trees they plant. Some plant fruit or nut trees, while others plant trees for firewood which, once they are cut down, stop generating income.
Maybe the most creative thing about TIST is the way it employs local people and global information technology to track its progress, a requirement under the UN rules. Using GPS technology and
Here’s a video about TIST.