For-Profit Uses Carbon Credits to Provide Free Water Purification Systems

Image: Saabira Chaudhuri 

A for-profit social enterprise that provides free water purification systems to the poor in developing countries, is using carbon credits to finance its business.

New York Times contributor Tina Rosenberg has written a blog post about how Vestergaard Frandsen, the producers of LifeStraw (I’ve profiled them before for this blog and for Fast Company) – a portable water purification device that filters bacteria and contaminants from water, to make it potable. The company also produces a larger, fixed version of the device, called LifeStraw Family, which they plan on distributing for free in the developing world.

Vestergaard Frandsen plans to adopt a carbon credit model, by which it earns credits for preventing the boiling of water (which can be very damaging for the environment) . Polluters will then buy these credits, providing a sustainable source of income for the company. 

“The company is on the way to getting approval from one of the carbon credit markets for the LifeStraw Family, and expects to win it in February,” writes Rosenberg. “Approval will provide a way for Vestergaard Frandsen to recoup its $24 million initial investment and to turn the product into a sustainable business ─ at no cost to users.”

She highlights the fact that, as opposed to traditional water projects in the developing world, that more often than not fall into disrepair, a carbon model incentivizes Vestergaard Frasen to distribute as many purifiers as possible, and to ensure that they continue to function properly – since the credits it receives are directly dependant on how much boiling it prevents and hence how much water its device can purify.