238 Oliver W. Johnson et al.
develop and manage forests in a sustainable manner certainly exists, although it is
not necessarily in the hands of those who need it most, namely the owners or
users of land where charcoal is produced. Both pathways face considerable challenges in obtaining the finance needed for upscaling. Both have trouble accessing
capital due to perceived risks.
Distribution of risks
It is not easy to identify risks associated with implementation and consequences
of geothermal power development and sustainable charcoal production – and
neither are the distribution and comparisons of those risks. The fairly rudimentary framework used in this study, in which we separated risks associated with
each energy pathway into implementation and consequential risks, has limitations given that different actors clearly frame risks and benefits in different ways.
Indeed, it is possible to separate the risks according to how they are distributed
between private economic interests, duty bearers, and rights holders.
Within geothermal, many of the financial risks fall upon private investors
and project developers seeking to invest debt and equity into exploration, drilling, and power generation ventures. Investors and developers are typically
willing to shoulder risks that are internal and inherent to the project, such as
those related to failing to prove the steam resource. But in order to mitigate
against external risks, such as the inability of the offtaker to meet the terms of
the power purchase agreement or nationalisation of private assets, they often
seek guarantees from the national and county governments that their investments will be protected. Meanwhile, sustainable charcoal production offers an
opportunity to better clarify and manage the distribution of financial risks compared to the dominant informal and unsustainable charcoal trade, where traders,
distributors, and government officials pursue their own private economic interests at the expense of the public interest. Promoting sustainability in the charcoal sector can support income generation for the producers and generate tax
revenue for the government, which can be reinvested in reforestation programmes or other livelihood initiatives.
The social and environmental risks of geothermal power development and
sustainable charcoal production are largely borne by local communities, which
are rights holders of the land where the activities generally occur. Kenya’s strong
land rights mean that traditional communities even maintain some access rights
on privately owned lands. Since the livelihood of many of these communities is
so closely tied to the land, the national and county governments – as duty
bearers for the citizens they govern – have a responsibility to uphold these
rights. This is particularly the case where the capacity of rights holders to
manage social and environmental impacts is limited. For geothermal, this means
effectively regulating private project developers and state- owned electricity utilities. For charcoal, this means ensuring charcoal producer associations maintain
established standards and that forest resources are sustainably managed.
Environmental and social impact assessments, with associated resettlement
develop and manage forests in a sustainable manner certainly exists, although it is
not necessarily in the hands of those who need it most, namely the owners or
users of land where charcoal is produced. Both pathways face considerable challenges in obtaining the finance needed for upscaling. Both have trouble accessing
capital due to perceived risks.
Distribution of risks
It is not easy to identify risks associated with implementation and consequences
of geothermal power development and sustainable charcoal production – and
neither are the distribution and comparisons of those risks. The fairly rudimentary framework used in this study, in which we separated risks associated with
each energy pathway into implementation and consequential risks, has limitations given that different actors clearly frame risks and benefits in different ways.
Indeed, it is possible to separate the risks according to how they are distributed
between private economic interests, duty bearers, and rights holders.
Within geothermal, many of the financial risks fall upon private investors
and project developers seeking to invest debt and equity into exploration, drilling, and power generation ventures. Investors and developers are typically
willing to shoulder risks that are internal and inherent to the project, such as
those related to failing to prove the steam resource. But in order to mitigate
against external risks, such as the inability of the offtaker to meet the terms of
the power purchase agreement or nationalisation of private assets, they often
seek guarantees from the national and county governments that their investments will be protected. Meanwhile, sustainable charcoal production offers an
opportunity to better clarify and manage the distribution of financial risks compared to the dominant informal and unsustainable charcoal trade, where traders,
distributors, and government officials pursue their own private economic interests at the expense of the public interest. Promoting sustainability in the charcoal sector can support income generation for the producers and generate tax
revenue for the government, which can be reinvested in reforestation programmes or other livelihood initiatives.
The social and environmental risks of geothermal power development and
sustainable charcoal production are largely borne by local communities, which
are rights holders of the land where the activities generally occur. Kenya’s strong
land rights mean that traditional communities even maintain some access rights
on privately owned lands. Since the livelihood of many of these communities is
so closely tied to the land, the national and county governments – as duty
bearers for the citizens they govern – have a responsibility to uphold these
rights. This is particularly the case where the capacity of rights holders to
manage social and environmental impacts is limited. For geothermal, this means
effectively regulating private project developers and state- owned electricity utilities. For charcoal, this means ensuring charcoal producer associations maintain
established standards and that forest resources are sustainably managed.
Environmental and social impact assessments, with associated resettlement