Field Actions Science Reports Cultural change and financial benefits in Rio de Janeiro, Brazil CULTURAL CHANGE AND FINANCIAL BENEFITS @BULLET SUSTAINABILITY @BULLET ELECTRICITY ACCESS @BULLET INCLUSION @BULLET OLYMPIC GAMES @BULLET LIGHT

Field Actions Science Reports The journal of field actions Special Issue 15 | 2016 Decentralized Electrification and Development Cultural change and financial benefits in Rio de Janeiro, Brazil Fernanda Mayrink and Eleanor Mitch Publisher Institut Veolia Environnement Electronic version Printed version URL: http://factsreports.revues.org/4157 Date of publication: 7 octobre 2016 ISSN: 1867-8521 Number of pages: 54-63 ISSN: 1867-139X Electronic reference Fernanda Mayrink and Eleanor Mitch, « Cultural change and financial benefits in Rio de Janeiro, Brazil », Field Actions Science Reports [Online], Special Issue 15 | 2016, Online since 07 October 2016, connection on 07 October 2016. URL : http://factsreports.revues.org/4157 The text is a facsimile of the print edition. Creative Commons Attribution 3.0 License  www.factsreports.org Launched in 2011 in Rio de Janeiro, “Light CULTURAL CHANGE Recicla”, an electricity access project, provides a wide range of benefits to low-income AND FINANCIAL communities. It was launched because regularized electrical connections and waste of “free” electricity made bills a financial BENEFITS burden. The project promoted bill payment, recycling, reduced consumption while in Rio de Janeiro, Brazil generating income, encouraging financial education. We describe the project history from its inception to its potential during major Eleanor Mitch Fernanda Mayrink events such as the Rio 2016 Olympics. Independent consultant Independent consultant eleanor@emstrategyconsulting.com INTRODUCTION In Rio de Janeiro, “favelas”1, with traditionally irregular habitations, are located in different geographies: from hillsides to along riverbanks. They lacked and continue to lack basic public services, including access to electricity, accessed informally and precariously. The number of favela households with electricity access is hard to assess as the 2010 census data was questioned as under-estimated 2 (Paraisópolis.org, 2015; Schmidt and Almeida, 2011). Light is the major electricity distributing company in the Greater Metropolitan Region of Rio de Janeiro and serves the entire State of Rio de Janeiro. Its concession area counts approximately 600,000 low-income household clients in the city of Rio de Janeiro (Light, 2016). Ecoponto in Santa Marta Illegal connections (“gatos”) to electricity are Source: Light made in both favela and non-favela areas. In 2007, Rio de Janeiro had Brazil’s largest number of Eleanor Mitch is an independent consultant and visiting “gatos”: 200,000 (Nadaud, 2012). In 2010, researcher at the Centre Edgar Morin, EHESS, France, she irregular electric connections represented a BRL is on the Alumni Advisory of Wharton’s Initiative for Global 1 billion/year loss (Prates and Soares, 2010). Environmental Leadership & has a post-grad in Biodiversity By 2015, the estimated loss due to “gatos” was BRL 850,000/year (Schmidt, 2015). Management UFRJ/UFRRJ/ENBT, Rio de Janeiro, Brazil. She is currently completing a PhD in law at the Université de Given this context, in 2011, Light launched Paris 1, Panthéon-Sorbonne. the Light Recicla project to reduce irregular connections, prevent payment default, electricity Fernanda Mayrink is an independent consultant. She was thef t risks, promote recycling and waste responsible for the creation and implementation of “Light management and ensure that favela households Recicla” in Rio de Janeiro and other municipalities and has have a sustainable access to electricity. a post-grad in Corporate Social Responsability – COPPE / Universidade Federal do Rio de Janeiro, B.A. in Journalism – 1 Much debate exists on the use of the word favela or communidade, PUC/Univercidade, Rio de Janeiro, Brazil. the former is defined by public authorities as predominantly housing, characterized by low-income population occupation, precarious urban infrastructure and public services, irregular passageways, lots and unauthorized construction (not compliant with Art. 147 of the 1992 Rio KEYWORDS de Janeiro Master Plan). The latter, “communidade”, or community, intends to transmit a more positive perception. The Central Única das Favelas (CUFA), Brazil’s Union of Favela leaders, specifically chose • SUSTAINABILITY the term favela to show pride in the roots of this social, cultural and • ELECTRICITY ACCESS economic area. We use favela as it is used by CUFA and the municipal government (see for more information Luna Freire, 2008). • INCLUSION 2 For instance, the Instituto Brasileiro de Geografi a e Estatística • OLYMPIC GAMES (IBGE, 2010 and 2014) estimates the Rocinha favela population • LIGHT at only 70,000, whereas community leaders and researchers estimate it at least 125,000. 54  Mini-grids: it is essential to adapt to local technical and economic constraints www.factsreports.org As part of the regularization process, in 2008, 1. PROJECT PRESENTATION Light established a “Special Tarif”7 for low-income clients, gradually increasing bills. This consisted 1.1. ORIGINS of of fering a 50% reduction on the price of Light is a century-old company based in Rio de Janeiro City serving electricity consumption the first month and, for Rio de Janeiro State. It built the region’s power plants. Key to each additional month, the 50% was reduced by the country’s development, it introduced electric lighting, the 2% until there was no more reduction (FGV, 2012). telephone, and was one of the first to provide service in low-income communities. 1.2. THE LIGHT RECICLA CONCEPT Up to the 1950s, informal electricity access was precarious, In par t, a culture of waste existed pre- but tolerated. During the military dictatorship, access was used regularization because electricity was considered for clientelistic purposes. In the late 1970s-1980s, Light was “free”, leading to high consumption rates and, nationalized and official electrification of the favelas began as part after regularization, high bills. One example of high of opening to democracy. In 1979, electricity began being installed consumption is leaving the refrigerator door open in favelas when local groups demanded basic services (water, to “cool” the home. Also, access to credit cards electricity, garbage collection). By 1982, 186 communities relied on with installment payments permitted purchases of metered direct electricity consumption. high energy consumption products: refrigerators, T Vs, irons, water heater, lighting, microwave In the 1990s, the electricity sector was privatized. Light’s first oven, sewing machine, hair dryer, electric fans, regularization program in the city of Rio de Janeiro (1996-2002), air conditioners (only 1/5 favela households), Programa de Normalização de Áreas Informais (PRONAI), sought to etc. (Nadaud, 201 2; BR ASIL, 201 2), fur ther regularize informal connections (Observatório das Metrópoles, 2015). contributing to increase electricity consumption Federal Law 9.991/2000 requires that electricity providers invest and bills. a minimum of 0.5% of net operating income in Energy Efficiency Three factors, regularization, increased demand Programs (EEPs) of the National Agency of Electric Energy (ANEEL) and bills, led to high electric bills, which had a (BRASIL, 2000; Nadaud, 2012) 3. In 2003, Light began the Efficient major impact on household budgets in the favelas Community Project4: social inclusion and education for conscious with UPPs units where Light regularized electricity and safe electricity use. It installs electricity in favela homes and access. This represented a payment default and provides for the exchange of appliances for National Electrical electricity theft risk. Energy Conservation Program (PROCEL) labeled lower electricity consumption ones: refrigerators, fluorescent for incandescent bulbs. To respond to this risk, in 2011, Light launched an EEP under the ANEEL, a public-private partnership In 2008, the State of Rio de Janeiro Security Secretary sought to called “Light Recicla” 8 . It creates electric bill recover areas under the control of drug traffic, militias and promote credits for collected recyclable materials. The the social inclusion of favelas. The Rio de Janeiro State public security materials are sold for market value by Light to program policy was to occupy and “pacify”5 favelas controlled by a recover partially the project cost. The goal is to so-called “parallel power” (trafficking or militia). Once occupied, facilitate bill payment, limit defaults and provide the policy implemented Pacifying Police Units (UPPs) 6 . The state long-term access to electricity in favelas while government asked utility service providers to regularize service promoting waste management and recycling. as part of the pacification process. The process is a two-step From its inception to the present, BRL 6.8M has partnership: the State rids areas of armed groups, setting up security been invested in Light Recicla. The current cost monitoring, then Light technicians replace old electricity networks, of running the project is around BRL 1.2M/year expand the system and electricity is regularized (Nadaud, 2012). (Light, 2015a). As of February 2016, there are Prior to regularization, in some favelas there were paying clients, but 13,900 clients registered in the project. many had to depend on narcotrafficker or militia-controlled service provision. These “providers” were under no obligation to provide services, among other imaginable problems. Upon regularization, the client received a bill that served as a legal document, proof of residency, required for many administrative processes, facilitating access to other citizen rights. Becoming a client also created consumer rights and responsibilities. 7 Light created this tariff policy in 2008. Separately, in 2002, the Federal Government created an Electricity Social Tariff subsidy for low-income 3 For example, in 2012, Light had to invest BRL 25M. families, providing a discount on electricity bills up to 65%, depending on monthly consumption (Law 10.438). The criteria are national and do 4 For registered Social Tariff participants, part of the ANEEL’s EEP. Since 2003, more than 9,000 electricity not consider the residence site. installations have been made in favelas. (World Resources Institute, 2016; Diário do Vale, 2014; Light, 2015b). 8 The inspiration was Ceará electric company’s (COELCE) initiative 5 Much polemics exist around the term “pacify”, we use it to reflect official use by government bodies Ecoelce, launched in 2007, in which recyclables are exchanged for as this paper’s focus is electricity access (Andrade, 2013; Carneiro, 2011; Catcomm.org, 2015). electric bill credit. Ecoelce is implemented in Fortaleza and other Ceará 6 This program began on December 18, 2008. Currently, there are 50 UPPs in place (UPPRJ, 2015). cities. Light Recicla focuses only on UPPs. 55  www.factsreports.org How the project works The Light Recicla system is shown in Figure 1: Step 1: Client registers and receives a Light Recicla card. Step 2: Client separates recyclable waste, brings it to the collection point (ecoponto). Step 3: Recyclables weighed and valued. Step 4: Light carries the credit issued onto one of four possibilities that the client selects. Figure 1. The Light Recicla system Source: Mayrink et al., 2015 Fixed and mobile ecopontos both exist. Fixed shows the massive electricity consumption that had become the ecopontos are implemented in favelas and are run habit (regularized consumption was metered, so counted; irregular by two professionals. Mobile ecopontos are used consumption was unmetered). in fairs, exhibitions, etc. to introduce people to the In July 2011, the pilot Light Recicla project was implemented in project. the Santa Marta favela, Humaitá and Botafogo with a holistic The recyclable waste (paper, metal, glass, plastic methodology. The two first ecopontos opened in Santa Marta and vegetable oil) is weighed and converted into during the summer 2011, and three other ecopontos opened credit amounts reflecting the recycling market between October and November 2011 in Humaitá and Botafogo. value. For example, on March 31, 2015 the credits Communication and educational activities in synergy with civic and granted in the city of Rio de Janeiro were BRL sustainability practices were developed to encourage a change in 1.55/kg for aluminum cans, BRL 0.75/kg for daily habits and consumption attitudes. other aluminum products or BRL 0.80/kg for PET Professionals working at ecopontos were trained in selective plastic (Light, 2015c). collection and environmental issues. An in-situ communication The four different ways the client can use credit are: methodology was used at the ecopontos. Each ecoponto had an educational booklet available for use. Banners, posters, etc. informed 1. Apply it to his personal electricity bill; the public about the price of recyclable materials, accredited social 2. D o n a te i t to a p ro j e c t-a c c re d i te d s o c i a l institutions, electricity savings achieved by selective collection, institution’s bill. (Only non-profit institutions are events, campaigns, etc. Wide communication contributed to project accredited. Currently, there are 51 registered transparency and provided information to all passersby. institutions including the Santa Marta Samba S c h o o l , a Ro c i n h a c o m m u n i t y c e n te r, a children’s hospital, etc.); Machine recording credit amounts, Light Recicla card and transaction receipt, digital weighing of 3. Donate it to another project participant or; recyclable material - Source: Light 4. For community businesses only: apply 50% of the credit towards bill payment and donate 50% to a participating social institution. 1.3. PILOT PROJECT (JULY 2011 – SEPTEMBER 2013) At least in the shor t term, the regularization implied by the UPP policy was very effi cient with regard to the percentage of bills paid and the amounts collected by Light. For instance, in Santa Marta, before the regularization (pre-2009), only 15% of bills were paid, for a total amount collected of BRL 242.17. After the regularization (prior to Light Recicla implementation in 2011), 93% of bills were paid, with a total amount collected of BRL 87,729.95 (Light, 2015a). Hence, an increase of 36,126.6%, representing a huge financial burden shock, and a very important long or medium term risk of payment default. This large amount also 56  Mini-grids: it is essential to adapt to local technical and economic constraints www.factsreports.org Different media were used. For example, community radio stations9 “ONE KEY TOOL WAS HOME VISITS, WHICH disseminated specific events, provided project information and WERE CRUCIAL AT THE BEGINNING TO tips to encourage residents to adopt positive attitudes and habits regarding electricity consumption and selective waste. Traveling INCREASE BUY-IN AND PARTICIPATION. collapsible booths transformed easily into information booths. CULTURALLY, IT ENSURED A CLOSE These were used at events and fairs. Educational games, talks, CONNECTION WITH THE CLIENT campaigns and events increased participation. BY PROVIDING INDIVIDUALIZED One key tool was home visits, which were crucial at the beginning INFORMATION. THIS HELPED REDUCE to increase buy-in and participation. Culturally, it ensured a close THE FEAR OF NOVELTY. IN SANTA MARTA, connection with the client by providing individualized information. HOME VISITS REACHED ALMOST 100% This helped reduce the fear of novelty. In Santa Marta, home visits reached almost 100% of households. OF HOUSEHOLDS.” Transparency is key to the success of this project. Participants can consult the value tables for each recyclable material paid for by the project. They watch as the deposits are weighed and see the monetary amount given in credit. Finally, partnership creation encouraged wide reach, especially in and cooperatives. 3E Engineering Company the private sector. Private schools donated recyclables’ value as operates the computer system responsible for credit to accredited social institutions (daycare, community centers, billing data transmission and oversees report shelters, church groups, etc.). A restaurant’s recyclables generated control and production. A cooperative, COOPAMA credit that was applied to the electric bills of its employees. - Cooperativa Popular Amigos do Meio Ambiente Ltda., is responsible for collecting vegetable oil. The Thanks to the system’s fl exibility, wide dissemination and partner NGO Doe Seu Lixo is responsible for other logistics, promotion, it encouraged “hill-asphalt”10 integration, since credit ecoponto operation, collection and transport of from waste collected in wealthier neighborhoods can be donated to recyclable materials. social institutions or other participating accounts. The project pilot helped generate visibility so Since its inception, the project has had the City’s support, cooperating that the project could be scaled up, create new with different departments (Depts. of Environment, Social action partnerships and replicate in other UPPs. and Public Space Conservation, Companhia Municipal de Limpeza Urbana the Instituto Pereira Passos and Southern Zone (Zona Sul) One of the best means of increasing participation Subprefecture 11). It also counts on the partnership of companies was “word of mouth”. Figure 2 shows the sharp increase in recyclable waste amounts collected with the opening of the three new ecopontos 9 Some favelas have speakers installed on top of poles connected to a central radio station, usually in Humaitá and Botafogo. By March 31, 2012, the neighborhood association. 187 tons of recyclable materials were collected at 10 “Asphalt” refers to the planned city and “Hill” to the hillsides where favelas arose. the 5 initial ecopontos, generating BRL 29,920 in 11 Rio is somewhat separated into the Northern Zone, traditionally more disadvantaged and the Southern Zone, traditionally more wealthy. credit on electricity bills. 1.4. PROJECT DEVELOPMENT Recyclable waste collected in tons Af ter the successful pilot phase, the project from August 2011 to March 2012 was expanded to other areas. The evolution of the number of fixed ecopontos created per 200 year is shown in Table 1. We note that after 2011, 180 ecopontos were created sparingly as Light sought 160 to provide the necessary resources to running 140 each ecoponto correctly: quality, not quantity 120 was the main objective of expansion. The first city outside of Rio de Janeiro to receive the project was 100 Mesquita 12 (one ecoponto in Chatuba and one in 80 Banco Nacional de Habitação neighborhoods) in 60 2014. In 2015, Japeri and Paraíba do Sul welcomed 40 their first ecopontos. 20 0 aug-11 sep-11 oct-11 nov-11 dec-11 jan-12 feb-12 mar-12 12 The result of the partnership between Light, Mesquita City Hall, the Source: Mayrink et al., 2015, modified by Mitch in 2016 Figure 2 Renascer Association of Waste Collectors of Mesquita and the Hope Association of Workers Collectors of Recyclable Materials of Mesquita. 57  www.factsreports.org Table 1. Evolution of ecopontos in the city and in the Greater Metropolitan Region of Rio de Janeiro Projected 2011 2012 2013 2014 2015 Total for 2016 City of Rio de Janeiro 5 3 2 0 1 11 1 Outside the city 0 0 0 2 2 4 2 Total 5 3 2 2 3 15 3 Source: Light modifi ed by Mitch in 2016. Figure 3. Location of ecopontos and length of operations (in months) at December 31, 2015 - Source: FERDI ³ # BRASILIA $ Paraíba do Sul ³ ³ 2 % Rio de Janeiro # Villa Isabel 500 Santa Teresa Km # Tijuca Botafogo Rio de Janeiro # # # # Japeri # # # Copacabana Mesquita # Gavea # # Months in operation Leblon Ipanema # <6 Months in operation Rocinha # # # 6-9 <6 # # 20 - 29 ## # 20 - 29 # 30 - 39 Rio de Janeiro # 30 - 39 # ### # # 40 - 49 # # 40 - 49 # 50 - 54 ### # 50 - 54 0 2.5 5 0 5 10 Km Km This expansion policy can be seen in Figure 3, representing the distribution of the ecopontos in 2. RESULTS AND IMPACTS OF LIGHT RECICLA the State of Rio de Janeiro and in a zoom on the 2.1. DISSEMINATION, PARTICIPATION AND POPULARITY city of Rio de Janeiro and their length of operation. By December 31, 2015, there were 13,752 clients registered in Light We note that the main cluster of longest-operating Recicla. Among them, 6,143 actually benefited (44,7%) from the ecopontos is in the Botafogo neighborhood. This project. 4,893 clients were considered as regular participants (35.6%). can be explained by the fact that Santa Marta became the first UPP in 2008. We note that other It is interesting to note the evolution of Light Recicla participants neighborhoods do not count as many ecopontos. over time. The pilot phase (July 2011 – September 2013) succeeded While the ecoponto in Rocinha, Latin America’s in involving more participants than the following phase of the project. former largest favela, has been operating for over Thus, 61,7% of the Light Recicla card were distributed during the 48 months, it is the sole one for 143.72ha (Rocinha first 27 months of the project. received its UPP in September 2012). This can be explained in par t by the difficulty in maintaining community motivation and program loyalty, even with the greater variations in the buyback price table used in Light Recicla. Moreover, there were operational difficulties that arose due to closing of ecopontos due to public works on the steep slopes of the favelas and internal conflicts in the community also contributed to the participation reduction. Participation fluctuated also due to the 58  Mini-grids: it is essential to adapt to local technical and economic constraints www.factsreports.org In Fig ure 5 , we c a n se e th e dis trib u tio n of Collected waste in tons credit granted from July 2011 to January 2016 from July 2011 to March 2015 (no available data for the 50/50 option only used by participating businesses). The large majority 3,000 of the individual clients (97.06%) opt to apply the credit to their own bills. 2,500 2,000 Allocation of credit uses 1,500 0.25% 2.69% 1,000 Used to lower client’s own bill 500 Donated to another project participant 0 2011 2012 2013 2014 1st quarter of 2015 Donated to a participating Source: Mayrink et al., 2015, modified by Mitch in 2016 Figure 4 social institution 97.06% relative distance between ecopontos. A higher density in an area provides more deposit opportunities for the population, not to mention greater dissemination to increase participation. Nevertheless, the number of deposits made at the ecopontos increased by 33.8% between the pilot project and the following of Source: Mayrink et al., 2015, modified by Mitch in 2016 Figure 5 the project. By December 31, 2015, 169,193 deposits have been made at the 15 ecopontos. And, as shown by Figure 4, the collection In May 2012, a satisfaction survey was conducted of recyclable wastes kept on increasing. among 119 Light Recicla participants. The results By December 31, 2015, more than 6,132 tons of recyclable wastes showed that 23 % of the participants rated the have been collected by the project Light Recicla. The main products project “excellent” and 57% “good”, showing the collected are paper, plastic and glass, representing respectively project’s popularity. 43.3%, 33.1% and 18.2% of the weight of the total amount collected. 2.2. IMPACTS OF THE PROJECT By December 31, 2015 the recyclables collected at the 15 ecopontos had As explained earlier, at least in the short term the generated BRL 649,129.70 in credit. From July 2011 to December 2015, regularization was very efficient with regard to the the average credit per month per Light Recicla participant was BRL 1.96 percentage of bills paid and the amounts collected (approx. EUR 0.5), and on average deposits at ecopontos were made by Light. The main objectives of Light Recicla were every two months. These averages mask the fact that some people to relieve Light customers from the huge financial participated a lot while others did so only occasionally, which explains burden shock implied by regularization and to the low average. Indeed, as the project depended on self-discipline and prevent a risk of payment default. organization, some residents participated more and saved more than others. Some made enough credit to use towards electric bill payment Table 2 presents the situations in Santa Marta before for several years. For three years, Severino, a resident of Santa Marta, regularization (pre-2009), after regularization before paid his electric bills by exchanging recyclables for credit. Vera Lucia da Light Recicla implementation (2011) and in December Costa, a resident of Cruzada São Sebastião, did so for two years. 2015, allowing a before/after comparison. Table 2. Impacts of Light Recicla in Santa Marta Post-regularization Pre-regularization (pre-2009) December 2015 (2011 before Light Recicla) Number of clients 73 1593 1664 Amount billed BRL 1,585.64 BRL 93,914.21 BRL 170,225.32 Amount collected BRL 242.17 BRL 87,729.95 BRL 163,410.71 % bills paid 15.3% 93.4% 96% % illegal connections 93% * ~ 7% ** ~ 0% % commercial loss for Light*** -93% -10.9% -5% * Based on 1991 Census data (Zaluar and Alvito, 1998). ** Based on 2010 Census data (RIO, 2016). *** Light method of calculations based on % of unpaid bills and % of illegal connections Source: Light modifi ed by Mitch in 2016. 59  www.factsreports.org In Decemb er 201 5, Santa Mar ta was 10 0% The credits allowed by Ligth Recicla eased the cost burden for regularized. Illegal connections almost the project par ticipants, improved bill payment and reduced disappeared among the community. While, the disconnections and electricity theft risk. amount billed increased by 81.3% between 2011 In addition to facilitating electricity access post-regularization (before Light Recicla) and 2015, the amount through the credit scheme, the recycling encouraged by the project collected rose by 86.3%. 96% of bills were paid also promoted electricity savings (Table 3). against 93.4% in 2011 before Light Recicla. Table 3. Energy calculation from July 2011 to December 2015 Household consumption/ Recyclable Total collected (Kg) kWh saved* month equivalent ** Paper 2,654,837.41 12,106,058.59 60,530 Plastic 2,029,424.94 10,755,952.18 53,780 Glass 1,116,669.01 714,668.17 3,573 Metal 253,846.79 1,345,398.59 6,727 Tetrapak 46,155.60 235,393.56 1,177 Oil 31,535.31 118,257.41 591 Total 6,132,471.06 2,5275,728.5 126,379 * EPA, 2000 ** Calculation = kWh saved/Average household consumption. Method based on Calderoni, 2003 Source: Mayrink et al., 2015, modifi ed by Mitch in 2016. From July 2011 to December 2015, 25,275,728.5 kWh were saved thanks to Light Recicla. This total 3. LESSONS LEARNED AND SCALABILITY energy saved is equivalent to the consumption of OF THE PROJECT 126,379 households/month (Mayrink et al., 2015). This represents a population size equivalent to 3.1. KEY DIFFICULTIES FROM 2011-2014 about 49% of Dharavi in India, the world’s largest One major difficulty was the time and effort required to align slum (Rai, 2015). government needs with those of the private companies operating as Light’s project partners. Constant negotiation was required, upsetting project timelines. This impacted the expansion of the project in a more clustered fashion. Another dif ficult y arose in process logis tics as recyclable materials required removal from ecopontos on a constant basis. In Rio de Janeiro, laws restrict the circulation of loaded trucks to specific times, which resulted in a logistically difficult and costly transportation process. Limited space for ecopontos in the communities made operations difficult. Mobile ones required more maintenance and transportation logistics to set up, remove and store. “TRANSPARENCY IS ONE OF THE Recycling market price volatility, which depends on the amount of KEYS TO THE SUCCESS OF THIS recyclable waste circulating, was a major difficulty because it resulted PROJECT. PARTICIPANTS CAN in fluctuating credit values. This impacted the credit granted. CONSULT THE VALUE TABLES FOR Finally, Rio de Janeiro lacks recycling companies able to work at the EACH RECYCLABLE MATERIAL PAID project scope. FOR BY THE PROJECT. THEY WATCH 3.2. SCALABILITY AS THE DEPOSITS ARE WEIGHED Replicable in other favelas, this project generated income to pay AND SEE THE MONETARY AMOUNT household electric bills, helping facilitate access to regularized GIVEN IN CREDIT.” electricity. 60  Mini-grids: it is essential to adapt to local technical and economic constraints www.factsreports.org electric bill, concern arose about sponsors who had paid for branding privileges. For example, when the Central Única das Favelas (CUFA), Brazil’s main organization centralizing favela leaders and communities, tried to organize the “Favela Olympics” so that community residents might benefit from the Games dynamic, they were contacted by International Olympic Committee (IOC) lawyers who threatened legal action for any use whatsoever of the word “Olympic”, as it is considered the intellectual property of the IOC13. Also, there was a relative lack of interest in the proposal. Light inaugurated the Complexo São Carlos ecoponto without Rio 2016. Since electricity access for low-income populations is a key to development, allocation of subsidies is a telling factor. Federal subsidies allocated for low-income consumers, promoting electricity development, universalizing electric power and expanding natural gas networks from the Energy Development Fund (CDE) (Eletrobras, 2015) are to be used for electrical Games works, causing polemics (Larkins, 2015; Konchinski, Currently, there are ecopontos in 15 locations. All favelas in Light’s 2014). S o m e alle ge d th at this re d u c e d th e concession area do not have ecopontos. In many, electricity access amounts for fund-dependent actions. It was has not yet been regularized, so there are areas in which the alleged that energy subsidies paid by the CDE and population has irregular, unstable access and in which Light has determined by the government would be greater great commercial losses. if the fund was not being used to pay for Rio 2016 Light has received more than 40 applications for expansion to other works. Indeed, supposedly, the Ministry of Sports areas, the municipalities of Nova Iguaçu and Barra Mansa, Public will pay for the electric works with its own funds; Defender’s Office and the Federal Accelerated Growth Program (PAC). however, only a small por tion, BRL 42M has been allocated. For the Olympic Park alone an Since 201 2, many private sector companies are interested estimated BRL 152M is needed for these works in the project. Some became ecoponto sponsors. These are: (Konchinski, 2014). Supergasbrás, Coca-Cola, Hortifruti and Leblon Shopping Centre. While some argue the legality of this use, the This project can be scaled for different situations – for small Olympic Act (BRASIL, 2009) establishes that the permanent ecopontos to temporary ecopontos for major events. federal government must provide the services Like the sister project in Ceará, it can expand state-wide. needed for the realization of the Games. Major events, like the World Cup and the Olympic Games are great opportunities. In 2014, the Organising Committee of the Olympic 3.3. PROJECT FUTURE and Paralympic Games Rio 2016 (Rio 2016) and Light tried to While the Light Recicla project provided great establish a partnership to benefi t the Host City’s most vulnerable benefits by offsetting bills, improving community populations and provide the tangible and intangible benefits of cleanliness, encouraging wiser electricity realizing the Games (Rio 2016, 2009; Minnaert, 2011). consumption and recycling, not everyone was able to pay their electric bills. A 2012 World Bank study The initial plan was to promote and establish recycling ecopontos, indicates that some people surveyed in UPP focus especially to benefit the City Center’s Complexo São Carlos groups had monthly electricity bills of more than Community, located right across from the Rio 2016 headquarters. BRL 50, in comparison to BRL 35 to BRL 41 in 2011 The plan was to encourage engagement, promote civics and (World Bank, 2012). This is quite high given the sustainable daily practices as part of the Olympic and Paralympic Rio State monthly minimum wage average of BRL Movement. Rio 2016 in-house recycling could be donated in part to 929.90, 5.35% of monthly income14. Data from a low-income community participant organizations. During Games- FIRJAN (Federation of Industries of Rio de Janeiro) time, Rio 2016 would donate part of the credit resulting from repor t on UPPs indicates average household recyclables to project-accredited social institutions. Problems arose given the commercial monopoly of the Games 13 Conversations with CUFA in 2014. sponsors (Louw, 2012). Although Light is the only electricity 14 It has not been possible to get a viable estimate for average income in distributor in the Games concession area and Rio 2016 pays an favelas (FGV, 2012; ADVFN, 2015). 61  www.factsreports.org income as BRL 644 in the Southern Zone (BRL People also noted habit changes, from appliance and electronics 422 for the Northern Zone) and unemployment accumulation and use to selling them and reducing electricity levels are 7.3% to 11.3% (FIRJAN, 2012). consumption (Ibid.). While some participants of World Bank focus Nonetheless, fear of not being able to pay electricity bills continues. groups criticized the quality of the electricity This factor is aggravated by the upswing in electricity bills due to infrastructure renovation, they recognized that new government rates due in part to low hydro power water levels the main benefit is that people began to believe and lack of water to generate electricity. From March 2014 to March again in public institutions and insurance of utility 2015, the electricity rate rose by 50%, leading to a 42% rise in provision (World Bank, 2012). Furthermore, people payment default disconnections among Light clients (Barros, 2015). saw regularized Light service as a positive measure According to the ANEEL, the increased electric bill cost led to a 113% because they could count on service repairs and increase in payment defaults among the lower-income consumers restoration when problems arose. Becoming a (Barros, 2015). Light Recicla helped ease the burden of electric client came with rights and duties that included bills for participants by helping them to reduce bills in exchange service fulfillment. Previously, if the irregular for recyclables. In addition, the project raised awareness of the electricity connection was lost, people had no importance of lower consumption, so participants purchased lower recourse to re-establishing electricity connections energy consumption appliances, like light bulbs, refrigerators, etc. unless there was a generalized problem. An added benefit was the improvement in waste disposal in favelas thanks to participants’ recyclable collection. CONCLUSION Exclusion is due to lack of basic infrastructure and the clients because it educated consumers on ways to inability to pay the costs associated with its consumption save electricity, reducing bills and disconnections due (Dieese, 2015). Light Recicla increases electricity access to payment default. Fur thermore, as the consumer in low-income p eri-urban communitie s , promote s became a regularized client, electricity service became conscious consumption and sustainability by promoting reliable, and the client learned that he/she should enjoy a behavioral change. It supports social, environmental, full benefits. By limiting illegal connections to electricity economic and cultural transformation. This permits the provided dangerously and unreliably, Light Recicla return on public and private actions and investments helps promote dependable electricity access to low- made by reducing illegal connections and facilitating income clients. bill payment. The project´s methodology and results can be used While the new (2016) electricity rate scheme is indexed to work in synergy with public authorities, civil society on hydro power production, reducing rates when it rains and private initiative to promote a real transformation a lot and much electricity is distributable, bill payment fo r sus t ai na b l e d eve lo p m e nt. T h e key te n ets a re is still a challenge for low-income populations given the civics, income generation, education, social inclusion, lack of access to better employment opportunities and tr ansp arency, cultural change and environmental pay. Moreover, recent droughts in Brazil have made preservation. These depend on ethics and transparency hydro power a not so sustainable option and, if rates as guidelines for material and electricity use decisions are indexed on rainfall and if there is little rain, rates made in companies. They are key to changing peoples’ remain high. daily behavior. Given this scenario, electricity providers can play a Despite varying electricity rates, we believe that this role extending beyond traditional Corporate Social project has great merit and can be expanded to other Responsibility missions, building partnerships in areas regions and other projects like the Rio 2016 Olympic and falling under government competence. It is important to Paralympic Games. Major events like the Olympics are focus on conscious consumption, as Light Recicla does, key opportunities to scale up and acquaint people with so that electricity access for low-income populations the project so that they will have already participated could be made long-term, rather than just on income once, making reiteration easier. In other regions or areas transfer. Noteworthy in this project is the change in of the world, this project can be scaled up to include an consumer behavior towards electricity efficiency. This entire state, as the inspiration for this project, Ecoelce, behavioral change promoted access for low-income demonstrates. 62  Mini-grids: it is essential to adapt to local technical and economic constraints www.factsreports.org REFERENCES ADVFN (2015), “Salário Mínimo - 2015”, Mayrink, F., Mendonça, M., Senra, P.M., Raad, A. (2015), br.advfn.com. “Projeto Light Recicla” Prêmio Associação de Comércio Rio de Janeiro 2015 – Light Electrical Services S.A. Andrade, H. (2013), “Desaparecimentos em favelas do Rio aumentam após início das UPPs”, Minnaert, L. (2011), “An Olympic legacy for all? The UOL.com.br, 3 Aug 2013 06:00. non-infrastructural outcomes of the Olympic Games for socially excluded groups (Atlanta 1996 - Beijing 2008)”, Barros, R. (2015), “Aumento da conta de luz eleva Tourism Management, volume 33, Issue 2. inadimplência dos consumidores no Rio em até 113%”, published on 23 July 2015 05:00, Nadaud, G. 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GENERATION, EDUCATION, SOCIAL Quando uma política urbana torna-se uma política de significados”, Dilemas, vol. 1, no 2, ICSF, UFRJ, Brazil. INCLUSION, TRANSPARENCY, CULTURAL CHANGE AND ENVIRONMENTAL PRESERVATION. THESE DEPEND ON ETHICS AND TRANSPARENCY AS GUIDELINES FOR MATERIAL AND ELECTRICITY USE DECISIONS MADE IN COMPANIES. THEY ARE KEY TO CHANGING PEOPLES’ DAILY BEHAVIOR.” 63