Climate Change Adaptation by Households and SMEs in Central Asia Through Action in the Microfinance Sector - MikroKlima

Background

Central Asia is one of the regions of the world most affected by climate change (Intergovernmental Panel on Climate Change, 2007). The consequences in Central Asia are felt particularly in rural areas where day-long power outages are not uncommon. The living and economic basis of the population is thus directly affected. At the same time, the vulnerability of the region for the negative consequences of climate change is particularly high due to their natural spatial and social vulnerability. The legal and institutional preconditions for effective climate adaptation and prevention there are currently only available to a limited extent, whereby energy efficiency measures and the introduction of renewable energies will be hindered.


In the Central Asian emerging markets, fossil fuels are almost exclusively used so far, which amplify the problem of climate change through increased greenhouse gas emissions, rather than counteract it. . Thus, there is a high potential to solve the problem of non-sustainable energy supply through the introduction of renewable energy and energy efficiency programs (German Energy Agency (dena), 2012). Since a large proportion of the population lives in remote rural regions, there is also great potential for micro-energy systems based on renewable energies, such as solar dryer, mini wind plants, micro- hydro and biogas.


Because of the regional economic structure and the political environment, households and small and medium-sized enterprises (SMEs) play a key role. It is politically more effective to directly build capacity where the effects of climate change are felt directly and adaptation measures can be put into practice, than to wait for political institutions take on the topic. Nevertheless, most SMEs in the region possess neither a track record of borrowing nor the amount of collateral required by banks (ECSSD Microfinance Team, 2004). The microfinance sector can crucially counteract this dilemma. Some possibilities are special energy loans for the financing of micro-energy systems and energy efficiency and adaptation measures. In Central Asia, where poverty rates remain high and a formal financial sector is still underdeveloped, microfinance plays an important role in the economic development and poverty reduction (ECSSD Microfinance Team, 2004).


The Project

Thus, a research project is to be initiated between partners in Germany and in Central Asia at the interface of microfinance, micro-energy systems and adaptation to climate change. The aim is the joint research on the key question: to what extent the microfinance sector in Central Asia may contribute, through appropriate products and services, to strengthen the resilience of households and SMEs to the effects of climate change and at the same time to reduce their greenhouse gas emissions? The focus is placed on measures to increase energy efficiency, to develop renewable energy and decentralized energy systems, for micro insurance and to strengthen local communities through microfinance networks. The application-related goal of the research is to strengthen the microfinance sector in Central Asia with regard to adaptation to climate change by providing science-based knowledge to the risks associated with climate change and socioeconomic vulnerabilities on the micro-level of households and SMEs.

 

Moreover, the aim is to, together with the research and practice partners in joint workshops and via a common field study, concretize the already developed research design and develop appropriate methods in order to answer the above outlined research question. Furthermore, the project partners will strive to develop a common theoretical framework, a common language and the leap from multidisciplinarity to interdisciplinarity. In addition, a better understanding of the mutual strengthening of climate change mitigation and adaptation measures (win-win solutions) should be developed and implemented in practice.


Expected results

  • Design of a transdisciplinary research project on adaptation to climate change of low-income households and SMEs in Central Asia based on measures of the microfinance sector
  • Developed set of methods for interdisciplinary research in the field of climate change, micro-energy systems and microfinance
  • Roadmap to further steps and applications
  • Established network of German and Central Asian scholars and practitioners within the field of climate change, micro-energy systems and microfinance
  • Completed Master's theses by students in Germany and Central Asia
  • Results of the joint field study
  • Final Report

MikroKlima in Central Asia


Timeline

September 2015 – May 2017


Workplan

Joint workshops that provide an intensive exchange and the implementation of a joint field study are planned. This will be implemented in 6 Work Packages, which are to be processed jointly by the project partners. The geographical focus is initially on Uzbekistan, and should then be gradually extended to other countries in the region.

  • WP1: Development of the research design
  • WP2: Training of young scientists
  • WP3: Stakeholder consultations
  • WP4: Development of methods
  • WP5: ME Atlas adaptation
  • WP6: Joint field study

For more information, please contact:

Mathias Koepke
Researcher
mathias.koepke(at)microenergy-international.com

Meerim Ruslanova
Research Assistant
meerim.ruslanova.me(at)microenergy-international.com