Results-Based Financing to Promote Clean Stoves : Initial Lessons from Pilots in China and Indonesia
Past market failures to deliver clean cooking and heating solutions, especially to low-income households, suggest the continued need for subsidies if universal access is to be achieved. To succeed, however, subsidies must be well-targeted, have low potential for “leakage,” and be calibrated to avoid destroying commercial incentives and discipline. Results-based financing, which disburses public resources against demonstrated results, can be used to mobilizeand sustain private-sector participation in scaling up access to clean stoves. Pilots implementing this approach under the World Banks Clean Stove Initiative show promising results.
Summary: | Past market failures to deliver clean
cooking and heating solutions, especially to low-income
households, suggest the continued need for subsidies if
universal access is to be achieved. To succeed, however,
subsidies must be well-targeted, have low potential for
“leakage,” and be calibrated to avoid destroying commercial
incentives and discipline. Results-based financing, which
disburses public resources against demonstrated results, can
be used to mobilizeand sustain private-sector participation
in scaling up access to clean stoves. Pilots implementing
this approach under the World Banks Clean Stove Initiative
show promising results. |
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