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As U.S. politicians and business leaders debate the economic feasibility of renewable energy and clean technology, and the Chinese government draws fire for polluted rivers and dirty air, reports say that a green revolution is taking place in rural China and transforming the lives of Chinese villagers.

Zhang Chengui is the leader of a village in northwest China’s Yunnan province, a region poor in money but rich in biodiversity, home to more than 17,000 plant and wildlife species. Commercial logging has been banned in Yunnan’s forests for a decade, but half a million households spend hours cutting and gathering firewood for cooking and heating—a labor-intensive survival chore that damages the environment and keeps families in poverty.

In 2003, using bank loans and grants from The Nature Conservancy, Zhang installed a solar water heater, energy-efficient stove, rain-collection cistern, and a biogas digester that converts human and animal waste to clean gas for cooking, lighting and heating. Zhang also uses slurry from the biogas digester to fertilize his fruit and vegetable crops.

By adopting alternative energy and conservation strategies, Zhang lessened his need for firewood, freed more of his time for farming, and tripled his annual income. With more income and less time spent chasing down firewood (a net gain of 100 working days annually for Zhang and his family), Zhang’s children were able to attend college. His son is now a magazine editor and his daughter is a government official. What makes all this possible is innovative financing through the GreenVillage Credit program—part of the United Nations Environment Programme’s China Rural Energy Enterprises Development (CREED) initiative—and the enlightened support of nongovernmental organizations such as

The Nature Conservancy that provide grants, training and other resources. The CREED initiative aims to reduce fuel wood consumption by 75 percent in rural China, which will cut the number of hours that families (mostly women and children) must spend gathering firewood and relieve many of the damaging health effects associated with wood burning and indoor pollution, thereby attacking some of the root causes of poverty.

GreenVillage Credit is helping to achieve that goal by providing small loans and technical support to help families invest in the kind of alternative energy and clean technology that Zhang adopted in his village. Loan applicants lay out a plan for the devices they want to purchase and how those investments will help them generate more income.

As a guarantee against default, 5 percent of the loan amount is deposited at a bank and five to eight other households agree to share responsibility for repaying the loan in 18 months. The program already has established an impressive track record of success in five African nations and parts of Brazil—and now it’s working in China.

By the end of 2007, more than 26.5 million households in rural China were using biodigesters, saving the equivalent of 44 million tons of CO2 emissions, according to the State Council Information Office of China. At the same time, The Nature Conservancy and its partners have taken their alternative energy project to 420 remote villages in Yunnan province, installing more than 14,000 biogas units, energy efficient stoves and solar water heating systems.

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