Archive for category: Economy

Information and stories about economy.

,

The True Costs of Fast Fashion

Fast Fashion
The fashion industry used to be “four seasons in a year; now it may be up to 11, 15 or more.” This phenomenon is resulting in “fast fashion.” Currently valued at $1.2 trillion, with more than $250 billion spent in the U.S. alone, the fashion industry has exploded as increased wages have increased demand. With this overload in consumption, there is inevitably much waste which damages the environment and exploits poor workers.

According to the Environmental Protection Agency, 15.1 million tons of textile were created in 2013. More than three out of every four garments has been incinerated or put in landfills. Traditionally, the U.S. has tried to reduce waste by selling used clothing to countries such as Pakistan, India, and Russia. With the strong dollar and increasing availability of cheap clothing from Asia, however, demand for secondhand clothing has decreased. As a result,  large amounts of waste needed to be taken care of.

The fast fashion industry also imposes an immense burden on the environment. The industry produces “10 [percent] of global carbon emissions and remains the second largest industrial polluter, second only to oil.” Producers consume nearly 70 million barrels of oil a year in just the production of polyester fiber and dump 1.7 million tons of dyeing chemicals into the environment. The industry also goes through an estimated 1.5 to 2.4 trillion gallons of fresh water a year, polluting much of it and damaging both human health and the environment.

While recent progress has created worker empowerment, the use of cheap labor in the fashion industry has been marred by tragedy. In 2013, a garment factory in Dhaka, Bangladesh collapsed, killing more than 1,100 people. Like other countries experiencing immense poverty, Bangladesh would “see its economy collapse” without the textiles industry. Brands such as Gap, Adidas and H&M have also been criticized for using child labor, paying wages of 50 cents per hour and demanding 10-hour shifts. With other options only as good as intensive agricultural work, many uneducated women find these abusive jobs as their best options. Workers also have had very little leverage in negotiating their working terms and so have less job security.

As all these issues continue to be exposed, however, progress will continue to be made. Since the factory collapse, registered trade unions in Bangladesh have increased from three to 120 and wages nearly doubled. As consumers have grown warier, smaller brands have emerged to promote the “slow fashion movement,” where people shop for quality over quantity and buy products made of sustainable materials. Larger brands have also sought change. H&M and Patagonia launched trade-back programs where customers can send in unwanted clothing that will be recycled and sold again. Nike has also worked to eliminate child labor and improve working conditions.

Although it is always great to see businesses take the initiative in improving the fast fashion industry, the ultimate dictator of change is the customer. Customers are the deciding factor in what companies produce. If the purchasing culture changes to one where customers primarily value how companies have treated its workers and the environment, then the necessary change will follow.

– Henry Gao

Photo: Flickr

, ,

The Missing Middle of Economies in Development

Missing Middle of Economies
Cited in the 2015 award-winning documentary “Poverty, Inc.,” the “missing middle of economies” refers to the theory that a gap of “small and medium enterprises” in developing nations prevents economic prosperity.

The Harvard Kennedy School’s Center for International Development is studying this issue to develop solutions that could lead these countries out of foreign aid dependency and into an environment that encourages local entrepreneurship and development.

World Bank Group databases suggest that small and medium enterprises (SMEs) “are responsible for 50 percent of GDP and over 60 percent of employment” in higher-income nations. Rates are “less than half of that” in developing, low-income countries, a fact that indicates major hurdles to economic autonomy and prosperity.

While small and large businesses may profit in low-income countries, the missing middle of economies produces roadblocks to development that keep countries dependent on foreign aid.

In a 2006 study published in Elsevier’s Journal of Financial Economics, researchers highlighted the challenges local entrepreneurs face with “entry costs” or “entry regulation.” They concluded that “entry regulations hamper entry,” an effect that is heightened in developing countries.

Harvard Kennedy School’s Asim Kwaja is a professor of public policy and principle investor in the Entrepreneurial Finance Lab Research Initiative, a pilot program designed to open entrepreneurial opportunities in developing African markets. Kwaja mentioned a “frustration” he has experienced throughout his career.

“There is a perceived massive cost, a political cost,” Kwaja said, for developing nations’ governments to set policy for local entrepreneurship. Tax codes and permit requirements, among other regulations, ultimately stymie development.

The Entrepreneurial Finance Lab Research Initiative investors have tested their model in seven countries, trying its ability “to stimulate entrepreneurship, access to finance and economic growth across the developing world.” Kwaja looks to change the “little perception of any returns” by encouraging policy reforms to stimulate the growth of SMEs.

On top of regulatory obstacles, local entrepreneurs face competition from low-cost (or no-cost) foreign aid suppliers like NGOs and non-profits.

Michael Matheson Miller, director-producer of “Poverty, Inc.,” holds graduate degrees in international development, philosophy and international business. He is a fellow at the Action Institute, a non-profit organization that aims to promote “a free and virtuous society.”

“Poor people are not poor primary because they lack stuff,” Miller said in a radio interview in May 2016. He asserted that the world’s poor lack the political liberties and economic opportunities they need to prosper.

“Poverty, Inc.” highlights the way unpredictable influxes of foreign aid mire economic opportunism. While most charitable giving is motivated by altruistic intentions, Miller stated that non-profits, NGOs and even foreign governments treat the poor as “objects” rather than “subjects and the protagonists of their own story of development.”

The missing middle of economies engenders a need for more strategic coordination to help developing countries gain a chance at economic prosperity.

– Tim Devine

Photo: Flickr

,

Quality of Internet Use is Influenced by Economic Status

Internet Use
Long considered the means by which the democratization of information would be achieved, the internet is increasingly becoming a platform where wealth disparities are made evident. According to a report released in July 2016 by the Organization for Economic Co-operation and Development (OECD), the quality of internet use among students seems to be influenced by socioeconomic status.

The OECD report, which studied teenage students’ time spent online, highlighted the so-called “digital divide” that exists between their respective, qualitative internet use. In addition to this, the report found that despite having equal access, which theoretically should imply equal opportunity and success, poor students were less likely to know about or take advantage of the myriad benefits internet access affords.

Interestingly, in 21 out of the 42 countries from which data was collected, poor students actually spent more time online than wealthier students. Wealthy students, according to the study, spend their time online reading the news and learning. “But disadvantaged students may not be aware of how technology can offer opportunities to learn about the world, practice new skills or develop [professional plans or internet-based communication opportunities],” according to the OECD report.

The report noted that internet use among rich and poor students is strongly correlated with more general academic performance measures. It appears that the problem of ignorance about internet benefits both perpetuates and is perpetuated by lack of education.

A separate, unrelated study by the London School of Economics, published in February 2016, showed that people of the “higher social status” (wealthier and more educated people) benefited from their time spent online. “To some extent, the findings suggest that access to and use of the internet might exacerbate existing inequalities offline,” the study’s author remarked.

The OECD report noted that work aimed at ending these disparities is underway but that far more needs to be accomplished in order to make a difference.

One related effort attempting to tackle the issue of internet access is the Digital Global Access Policy (GAP) Act, which is currently making its way through Congress. This legislation is designed to bring internet access to the 60 percent of the world that is currently offline.

Though not directly related to efforts to leveling the playing field among people who are already online, the Digital GAP Act should have indirect but related benefits, as its passing will mean wider dissemination of internet education.

– James Collins

Photo: Flickr

,

Palm Tree Oil Plantations in Gabon Create Rural Jobs

Palm Tree Oil Plantation
With notoriety for being one of six leading oil producing countries in Africa, Gabon embarked on a new project — developing palm tree oil plantations aimed at reducing the poverty gap and encouraging sustainable development.

Since 2013, Gabon has been facing a decline in its oil reserves. The government committed up to one million hectares of sustainable land to appeal to investors in agricultural development and spawn economic diversification.

Collaboration With Olam Palm Gabon

Olam Palm Gabon, Singapore’s Olam International Ltd and Gabonese government-owned company made an agreement with the government of the Republic of Gabon to utilize 50,000 hectares of land for palm plantation.

The development of palm tree oil plantations will enable the country to diversify its dependency on oil and instead invest in a more lucrative and long-term venture. Palm oil trees can produce fruit for more than 30 years with a plant yield far more advantageous than any major oilseed crop.

Sustained Economic Livelihood

Gabon has a population of 1.9 million, the highest urbanization quota in Africa with more than four in five Gabonese citizens residing in the metropolitan area. With an additional unemployment rate of 20%, partnership with Olam to build plantations will generate a revenue of $400 million and up to 5,000 new jobs.

Planting began in 2011; currently, 31,000 hectares exist. Upon complete production, the plantation is expected to yield 24 metric tons of fruit bunches per hectare and 5.2 metric tons of oil per hectare. The total estimated investment in phase one development of plantations, palm oil mills and related assets was $500 million.

Six thousand five hundred and two hectares have been sold and leased for $130 million. This proves Gabon’s ability to support innovative financial structures designed for the growth of the palm oil sector.

Job and Investment Opportunities

Experts believe that investment in the palm tree oil plantations in Gabon and the rest of Africa is thriving and will create local jobs and guarantee the stability of the local economy. Ali Bongo Ondimba, the head of State, commissioned on Sept. 16 the new production site of sustainable palm oil of Olam, in Kango, in the Estuaire province. Eight hundred jobs have been created in this location, with an inevitable 120 contracts planned. Social contracts signed by Olam ensure small farmers are key sellers in the project with a mutual benefit of electricity, road repair and water supplies.

Falling oil prices in Gabon have had the most severe effect on the country’s poor. The project also entails support of local community farming around Kango with the construction of 400 accommodations and social infrastructures.

“In Sub-Saharan Africa, many countries rely on extractive industries for revenues, but extractive industries don’t create a lot of jobs, and so countries are beginning to invest more in agriculture as a means of job creation,” said Gagan Gupta, chief executive at Olam Gabon Enterprise. “To succeed, however, agriculture projects must take into account, and invest in, local communities.”

Given the attention Gabon has received for their actions, it is hopeful that such efforts will continue to yield fruitful results encompassing economic growth.

– Shanique Wright

Photo: Flickr

,

Inequality and Poverty in Namibia: A Gaping Wealth Gap

Poverty in Namibia

Namibia is a country in southwestern Africa, bordered by the Atlantic Ocean to the west. It is home to diverse wildlife species. Namibia is one of just nine countries in Africa categorized by the World Bank as “upper middle income.” Poverty in Namibia, however, is still prevalent and the country is rife with extreme wealth imbalances.

The Namibian Economy

The Namibian economy boasts relatively high growth, with an average growth rate of 4.3% between 2010 and 2015. The economy is heavily based on the country’s mining industry, which accounts for 50% of foreign exchange earnings. Despite its high income, Namibia has a poverty rate of 17.2%, an unemployment rate of nearly 20% and an HIV prevalence rate of 11% percent.

Poverty in Namibia is acute in the northern regions of Kavango, Oshikoto, Zambezi, Kunene and Ohangwena, where upwards of one-third of the population lives in poverty. Furthermore, the country’s status as upper middle income makes its most vulnerable population ineligible for aid from the United Nations Development Programme (UNDP) and other development groups.

Economic Disparity in Namibia

The apparent imbalance between Namibia’s high income and simultaneous extreme prevalence of poverty can be traced to enduring income inequalities. Namibia has the second most unequal wealth distribution globally, with a Gini coefficient of 0.63, after South Africa, making it one of the most unequal countries. High inequality persists despite several government initiatives, reflecting the nation’s history when the apartheid system created significant economic and social disparities between the white minority and the Black majority.

In Namibia, the most disadvantaged 20% of the population receives approximately 3% of the total expenditure, while the richest 20% receives more than 70%. Gender inequality is also a significant issue in Namibia. As of 2023, women make up only 55.8% of the labor force, while men make up 63.7%. This gender gap in labor force participation is lower than in other upper-middle-income nations.

Efforts

Even though poverty in Namibia has declined significantly in recent years, the United Nations (U.N.) and other advocacy groups have pressured the Namibian government to do more to tackle the large wealth gap. In response, the Namibian government has implemented several initiatives to narrow the wide gap between the most vulnerable and wealthy populations.

One of these initiatives is the Black Economic Empowerment (BEE) program. This policy aims to encourage the participation of the Black population in the economy, which could ultimately transform Namibia’s economy while narrowing the wealth distribution. Additionally, the New Equitable Economic Empowerment Framework (NEEEF), which the Namibian government implemented in 2018, encourages businesses to transfer ownership and skills to historically disadvantaged Namibians.

Final Remark

While these efforts are steps in the right direction, addressing Namibia’s significant wealth gap and inequality remains an ongoing challenge requiring sustained commitment and innovative solutions.

– John English

Photo: Flickr
Updated: June 01, 2024

Mondragon Cooperatives: Improving Spain’s Economic Struggle

Mondragon Cooperatives: An Alternative to Spain's Economic Struggle
Cooperatives are being used as an alternative to the usual corporate hierarchical business model. These are businesses created by people uniting voluntarily in a democratic manner, aiming to improve their economic and social needs.

Economists recognize the crucial role they play in improving Spain’s economic struggle. The largest worker cooperative in the world, Mondragon Corporation based in the Basque region of Spain, best exemplifies this claim. Once known as one of the poorest regions in Spain, the Basque region is now the richest, prospering due to a strong sense of self-determination, grassroots participation and non-governmental intervention.

In the 1940s, the young priest Don Jose Maria Arizmendiarrieta made it a goal to reduce the poverty rate at the time. The repressive policies of Franco’s regime were leading to economic restraints causing more Spaniards to emigrate from the country. Arizmendiarrieta wanted to counteract this by creating humanistic cooperative businesses that looked out for workers’ needs. Arizmendiarrieta and others created a technical school. He then established a cooperative bank, the Caja Laboral, leading to the first industrial cooperative in 1956.

Today, Mondragon is one of the most successful Spanish firms with global sales of $15 billion, employing close to 75,000 individuals in a total of 260 cooperatives. The people of Basque no longer experience the poverty they once did, “In Mondragon, I saw no poverty, I saw no signs of extreme wealth, I saw people looking out for each other,” said Sociology Professor Barbara J. Peters. “It is a caring form of capitalism.”

The Mondragon cooperatives are based on 10 principles: democratic organization, open admission, subordinate and instrumental nature of capital, value and importance of labor, participation in management decisions, fair payment, social transformation, cooperation, education and the university.

Workers in Mondragon have full control over their firm. Once a year members of each cooperative meet in a general assembly and elect who they want in charge; this board of directors is chosen to lead the cooperative in making important decisions and deciding the company’s strategy.

Moreover, the cooperatives are not accountable to shareholder’s needs; outsiders cannot buy any control, which allows management to invest solely on their cooperative with the long-term interest of the community in mind. Instead, the workers of Mondragon receive a share of the annual profits or losses based on a formula that tries to reflect the relative productive contribution of each worker.

Using this formula, most of the profits are reinvested, in turn creating new cooperatives and jobs as well as spurring the long-continued growth of Mondragon. Funds are also put aside for social welfare, providing care for retirement, widowhood and disability. Additionally, top CEOs at Mondragon are not earning exceptionally more than starting employees, somewhere between three to nine times more, which is significantly lower than most corporations.

Due to Mondragon’s investment methods, they barely felt the loss of the 2008 recession, which deepened Spain’s economic struggle. Not a single employee was fired, remaining steady at around 84,000 worldwide, one-sixth of them Spaniards. Instead of firing workers, their employees’ average salaries dropped by around 5%, and those who were left without work found jobs at another co-op; all the co-ops back each other up, making sure they prioritize their profits, investing in the co-ops which are economically declining.

Since 1990, Mondragon has expanded its businesses to international markets. Today, they have 125 different businesses in different countries; however, these businesses are not all cooperatives. In 2006, Mondragon began working with Mexico, Brazil and Poland to educate trade unions on how to properly run a co-op.

The 2008 economic recession set the project back. Nevertheless, in 2009 Mondragon partnered with the United Steel Workers (USW) to lay the groundwork for the formation of Mondragon Union Cooperatives in the U.S.

– Marcelo Guadiana

Photo: Flickr

, ,

10 Facts About Refugees in Sweden

Facts about Refugees in Sweden
The number of refugees seeking shelter in Sweden increases with the passing of time. Below are 10 facts about refugees in Sweden and the Swedish refugee system as it stands today.

  1. In 2015, approximately 163,000 people applied for asylum in Sweden, a country with a population of 9.8 million.
  2. Of those who applied for refugee status in Sweden, 31 percent were of Syrian descent, 25 percent were of Afghani descent, 12 percent were of Iraqi descent and the remaining 32 percent of refugees came from other Middle Eastern countries, including Iran, Eritrea, Somalia and Albania.
  3. As of 2015, Sweden’s population of 9.8 million included around 16 percent of people who were not born in Sweden; therefore, they either immigrated or are refugees in Sweden from other countries. By comparison, 13.3 percent of the United States’ population in 2015 were immigrants not born in the country.
  4. Sweden, approximately the size of California, is made up of immigrants by 16 percent, resulting in a significantly higher concentration in comparison to the U.S.
  5. A popular destination for refugees in Sweden is Malmö, the country’s third-largest city. Forty-three percent of Malmö’s residents are of foreign background. At 40,000 strong, Iraqis constitute the largest racial group.
  6. Many refugees in Sweden establish businesses as soon as they are accepted into the country, building falafel houses; bakeries selling traditional Syrian, Iranian or another nationality’s pastries; dentistry; and other businesses that help to diversify the Swedish economic market.
  7. However, the Swedish government imposed new regulations on refugees recently. If a documented refugee wants to also have their family members come live in Sweden, they must apply for their family’s refugee status within three months of arriving in Sweden.
  8. If a refugee does not apply for their family’s relocation within three months of arrival, the refugee living in Sweden must show they have the means to financially support their entire family. Under previous legislation, refugees only had to prove they could financially support themselves when applying for their family’s transfer to Sweden.
  9. Sweden’s refugee policies have also changed for children and young adults seeking refuge independent of a family unit; any refugee under the age of 25 who applies for permanent residency must have completed high school and prove that they can support themselves financially.
  10. The precise number of minors crossing oceans and borders without their parents to reach other countries for asylum each year is unknown. Sweden registered 35,000 in 2015 alone. These children are assigned legal guardians who help nurture and prepare refugees for life in Sweden, including special language courses so they can attend Swedish public schools.

The recent influx of refugees in Sweden has made it a more diverse country teeming with potential. Refugees in Sweden have helped add to the economy of the country, and that help should not be trivialized. Sweden’s growth as a country on the global stage is something to look forward to, and their refugee population will surely lend a hand, if asked.

– Bayley McComb

Photo: Flickr

,

Tentree: Environmentally Friendly Business Through Selling Clothes

environmentally friendly business
A group of friends envisioned an environmentally friendly business. They combined one friend’s knowledge of tree planting with the world’s desire for apparel, which is how Tentree was formed.

For every item purchased from the clothing line, 10 trees are planted. In an article published by the Business Development Bank of Canada (BDC), the company measures its success not on profits but by how many trees they have planted.

Tentree’s website includes an interactive map which displays where the trees have been planted all over the world. As of September 2016, the company has planted 9,382,290 trees. The following is a list of countries and its respective number of trees planted:

  • Madagascar – 4,936,830
  • Senegal – 1,395,500
  • Nepal – 1,463,290
  • Ethiopia – 724,140
  • India – 135,800
  • Malawi – 225,000
  • Kenya – 149,540
  • Canada – 57,780
  • Haiti – 278,560
  • Cambodia – 10,290
  • United States – 5,000

The website includes information on what individual consumers’ trees accomplish for the world and community. Some important contributions made by trees that are highlighted include lifting water out of the soil, providing food for the local population, supplying oxygen to breathe and removing carbon dioxide from the air.

A village in Madagascar, Mahabana, has seen the largest number of trees planted and the greatest improvement from the program. Tentree started a project in the village with 40 people working to plant trees.

In an interview with Now This, Kalen Emsley, one of the co-founders of the company reports that the project has grown to over 450 people working full time, completely supported by Tentree.

The restoration of the ecosystem of mangrove trees has lead to a return in wildlife, a rebounding fishing industry and people have been able to start selling fruit.

According to Canadian Broadcasting Corporation (CBC), Tentree planted 7,000 trees in the Lac La Ronge Provincial Park along with the government in the province after forest fires ravaged parts of Saskatchewan.

The forest fires burned parts of the park in 2015. Tentree announced their plans to help replant trees at the Saskatchewan Fashion Week. They shipped donations of clothing people who were evacuated in the Fort McMurray wildfire this summer and are beginning to make plans for replanting in that area.

Tentree hopes their environmentally friendly business goes beyond helping the environment. They work with local and global nonprofit organizations to ensure prime results like WeForest, Canadian Wildlife Federation, Eden Reforestation, American Forests and Trees for the Future. They hire people from the local communities to grow, tend and plant the trees.

As stated on the Tentree website: “Every consumer that purchases a Tentree branded piece of clothing is showing their dedication to the values our team shares: environmental stewardship, social responsibility, and the hope for a brighter future.” Tentree hopes to make a lasting community, both locally and globally, with their environmentally friendly business of clothing and tree planting.

– Rhonda Marrone

Photo: Flickr

,

Reducing Food Waste to Address Poverty and Climate Change

reducing food waste
Reducing food waste could potentially prevent climate change and help end global poverty. In the first study of its kind, the Food and Agriculture Organization (FAO) calculated that the world’s population wastes 1.3 billion tons of food per year. That food waste also results in 3.3 billion tons of greenhouse gases entering the atmosphere.

Food waste also costs the world $750 billion annually. The United States alone wastes $161 billion a year. Another study calculated that $265 billion per year would end world poverty and hunger by 2030.

The FAO’s study, “Food Wastage Footprint: Impacts on Natural Resources,” focuses specifically on the environmental impacts of wasting food. A 54 percent majority of this waste occurs during the production phase, and developing nations struggle most during this part.

On the other hand, 46 percent of food waste occurs during the distribution and consumption of those products. Developed countries waste more during the consumption phase; they are responsible for 31 to 39 percent of total food waste.

Reducing food waste requires positive change in all phases of the food production and consumption chain. The FAO also suggested teaching more environmentally friendly farming practices and better analysis of the balance between supply and demand. As a result, the entire food production process would be more efficient and profitable during both phases.

Not only does reducing food waste affect the economy and environment, but it also has a positive social impact. If consumers in developed countries reduced their food waste, then farmers in developing nations would have more land and other resources. These farmers could use the extra water and space to grow the foodstuffs their countries (and other developing nations) need.

Both the Environmental Protection Agency (EPA) and FAO provide toolkits for reducing food waste. The EPA’s toolkit also provides a guide full of information specifically about the U.S. It also contains an implementation plan for starting a local advocacy movement. Here are just a few ways individuals can help reduce food waste:

  1. Plan before shopping. Checking the fridge and pantry before shopping can prevent overbuying.
  2. Buy the ugly fruits and vegetables. They are still perfectly good to eat.
  3. Keep track of “Sell By” and “Use Before” dates. Sometimes, food stays good much longer than a sell by date. In addition, make sure to eat foods that are nearing those use before dates.
  4. Be creative. If they are a little wilted or wrinkled, those foods are still great for smoothies, soups, pies, etc.
  5. Eat smart and share. Controlling portion sizes when cooking or ordering food while out will reduce food waste. If there are extras or leftovers, sharing with family and friends can also help.
  6. Freeze food. This will keep it fresh until a much later date.
  7. Compost. Buying a kitchen composter or recycling waste in a garden will keep food out of landfills.
  8. Donate. Donating untouched food to homeless shelters or others in need will be doubly beneficial. Instead of becoming waste, it will go to the people who desperately need it.

Food waste clearly has a widespread impact in all avenues of human life. Better communication and balance between farmers and distributors would save both money and the environment. More thoughtful purchasing and consumption at the individual level would also contribute. If the world can cooperate and reduce food waste, then there is greater hope for the end of environmental destruction and global poverty.

– Taylor Hazan

Photo: Pixabay

Brick Kilns in Bangladesh Reduce Emissions and Poverty

Brick Kilns in BangladeshIn South Asia, traditional brick kilns are known for both labor exploitation and the massive amount of pollutants they spew. A project sponsored by the World Bank Group is introducing new Hybrid Hoffman Kiln (HHK) technology into brick kilns in Bangladesh. The cleaner, more efficient kilns produce less pollution, better labor conditions and more stable income for workers.

Poor children who drop out of school to feed their families become a source of cheap labor for kiln owners in the northwestern Indian state of Jammu and Kashmir. These children often develop health problems as a result of long-term exposure to smoke and coal dust.

Along the same lines, an openDemocracy article published on July 21, 2016, revealed the cycle of debt and poverty generated by brick kilns in Pakistani Punjab.

Traditional fixed chimney kilns are also an environmental concern. According to the World Bank Group, an estimated 8,000 traditional kilns emit 10 million tons of carbon dioxide every year in Bangladesh alone.

The Bangladeshi HHK project, which began in 2008, has sought to address the many problems associated with traditional kilns. Thanks to financing and support from the World Bank Group and the Industrial and Infrastructure Development Finance Company Limited (IIDFC), there are now nine HHK brick kilns in Bangladesh.

HHK technology originated in Germany but has been modified to fit local needs. By recycling waste heat from the kiln and using a greener mix of coal and clay to burn the bricks, HHKs use only half as much coal as fixed chimney kilns, reducing pollution by 50 percent.

In addition to being environmentally friendly, the new brick kilns also have incredible economic benefits; their technology allows them to operate year-round. An HHK kiln can produce an average of 11 million more bricks per year than can a fixed chimney kiln. More efficient production means higher income for kiln workers.

Reduced pollution becomes an additional source of revenue for HHK kiln operators. By cutting carbon emissions, they receive certified carbon credits (CERs), which the World Bank Group’s Community Development Carbon Fund (CDCF) and the Danish government then purchase from them. Kiln owners must spend some of the money they earn from carbon credits on healthcare, better facilities and new safety measures.

The biggest problem with HHKs is the price tag. Building an HHK kiln costs 15 times as much as building a traditional one. It will take an estimated $3 billion to construct 1000 HHKs. However, their many environmental and economic benefits make these improved brick kilns a worthwhile investment.

– Philip Katz

Photo: Flickr