An Innovative First – (Carbon for Water)x( for Health)

19Apr11

Rarely have I been so excited about an innovative global health financing initiative than: Carbon for Water (yes, that is right, it doesn’t even have the word health in the name!)

Carbon for Water is what I would call a second-generation innovative global health financing tool that combines the powers of the carbon markets, new innovative technology to provide safe drinking water for millions affordably and provides exponential positive health benefits.

Innovative Financing For Health:

First Generation: UNITAID – using a small airline tax levy to collect funds that make up 64% of the procurement pool resource base to increase access to HIV/AIDS, TB and Malaria drugs. This airline solidarity tax can be in the form of a fixed fee (as in Chile) or a differentiated tax depending upon economy or business class or domestic versus international flights (as in France). UNITAID is innovative because it has aggregated the powers of small individual taxes into a billion-dollar per annum procurement tool to guarantee sustainable, predictable markets for drugs. UNITAID is the first example of a global health agency to pursue public health outcomes through market impact.

Second Generation: Carbon for Water is a project of Vestergaard Frandsen, a European company specializing in complex emergency response and disease control products. VF has developed a LifeStraw water filter product that is a point-of-use water microbial treatment device for resource-poor settings.

Their forces for change are as follows:

– VF is distributing the LifeStraw water filtration system to 90%+ of households in the western province of Kenya in partnership with the Ministry of Health (May/June 2011)

– By utilizing the LifeStraw water filtration system, the rural villagers reduces their need to boil water to kill bacteria/viruses and to purify the water. This reduces the need to burn firewood to boil water (reduces carbon emissions)

– An independent accredited auditor will carefully monitor the use of the LifeStraw and carbon emission levels every 6 months post implementation. Carbon credits will be issued to VF after each verification round.

– VF will sell the credits to the Voluntary Emissions Reductions (VER) market and recoup its investment and sustain the LifeStraw program (this program is certified by the voluntary gold standard)

I think this is a great example of an innovative pay-for-performance business model by VF. The program is entirely funded by VF (estimated to be $25 million) and not dependent on any long-term aid or grant programs. The benefits are multi-fold:

-carbon emission reductions (good for the environment)

-cleaner water (numerous health benefits to combat MDG health goals and diarrhoeal diseases)

-reduced need for women to collect firewood to burn for boiling water (often cumbersome and dangerous)

-reduced need for burning indoors (decreasing chances of accidental burns and toxic fumes inhaled by women and young children).

-in one mechanism, Carbon for Water makes progress towards at minimum, 5 MDG goals!

This plan looks amazing on paper – high impact and affordable access for the individuals in low and middle -income countries and financially sustainable for the business in collaboration with the ministry of health.  Implementation is scheduled to begin in one-two months and watch this space for further updates… as I will be keeping a close eye on this program!

I have tried to keep this blog focused on financing global health and innovations in drugs, devices, vaccines and delivery.  I have rarely commented on climate change and water/sanitation – but this all just may change… as this second generation innovative financing mechanism shows, the ecosystem is increasingly interconnected. carbon x water x health!

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