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					Standard Form 424
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< http://es.epa.gov/ncer/rfa/forms/sf424-v2.0.pdf>




                                              i
Key Contacts
This is just a place holder for the Key Contacts Form
< http://es.epa.gov/ncer/rfa/forms/keycontacts.pdf>




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Table of Contents
Standard Form 424 .......................................................................................................................... i
Key Contacts.....................................................................................................................................ii
Table of Contents ............................................................................................................................iii
Abstract ........................................................................................................................................... 1
Research Plan .................................................................................................................................. 2
   1. Project Description .................................................................................................................. 2
       i. Challenge Definition ...........................................................................................................................................2
       ii. Innovation and Technical Merritt .....................................................................................................................3
       iii. Relationship of Challenge to Sustainability ......................................................................................................5
       iv. Measurable Results ..........................................................................................................................................6
       v. Integration of P3 Concepts as an Educational Tool ...........................................................................................7
   2. Project Schedule ...................................................................................................................... 7
Partnerships .................................................................................................................................... 9
References .................................................................................................................................... 10
Letters of Support ......................................................................................................................... 11
Appendix ....................................................................................................................................... 16
Budget ........................................................................................................................................... 18
   Budget Outline .......................................................................................................................... 18
   Budget Justification ................................................................................................................... 18
Resumes ........................................................................................................................................ 19
Current and Pending Support ....................................................................................................... 21




                                                                                   iii
                                                                         EPA-G2009-P3-Q4



Abstract
Funding Opportunity      P3 Awards: A National Student Design Competition for Sustainability
                         Focusing on People, Prosperity and the Planet, EPA-G2009-P3-Q4,
                         EPA-G2009-P3-Q1 (additional area).
Title                    Design and Assessment of Environmental Micro-Finance for
                         Impoverished Farmers in Rural Africa
Principal Investigator   Campbell JE, Assistant Professor, Environmental Engineering,
                         University of California, Merced, ecampbell3@ucmerced.edu
Institution              University of California, Merced (Merced, CA)
Student Investigators    Undergrads: Bernardo L (leader), Bianchini L, Chambers A, Flanagan
                         J, Harrison C, Lee J, Nakimuli C, Ochoa L, Saito D, Yee V, Zaveri S
Student Departments      Computer Science, Environmental Engineering, Psychology
Period                   August 15, 2009-May 15, 2010
Amount                   $9,800

Project Summary: The rapid growth of micro-finance in developing countries has resulted in
increased environmental pollution such as when agriculture micro-credit is used to purchase
pesticides and fertilizer, forest lands, and cattle. An emerging approach to environmental
micro-finance is weather-indexed crop insurance that dramatically improves land use efficiency
(Planet) in developing countries while benefiting rural economies (Prosperity) and food security
(People). Supplying environmental micro-insurance requires significant capital investment. A
U.S. non-profit, Kiva, developed an online person-to-person (P2P) micro-loan approach that has
effectively matched micro-investors in the developed world with micro-entrepreneurs in the
developing world. While, a novel application of the online P2P approach with environmental
micro-insurance appears attractive for sustainable development, its design and effectiveness at
recruiting micro-investors is unknown. Here we propose to develop and assess a model of
online P2P micro-insurance based on the P2P tools of Kiva and the precipitation-indexed micro-
insurance projects completed by the World Bank in Malawi, Kenya, and Tanzania. We will use
the model in an experimental assessment with human subjects at UC Merced, collecting active
and passive data to measure the likelihood of participation by micro-investors. The
experimental data will be used to improve on our P2P-insurance design and to work with our
project partners at Kiva to determine the feasibility of a regional deployment by Kiva. The
project will be conducted by our interdisciplinary team of students enrolled in UC Merced’s
Engineering Service-Learning course (ENG097/197) representing Computer Science,
Environmental Engineering, Psychology, and other departments. The project will provide
educational benefits through our coursework, anticipated publications in the International
Journal of Service Learning, and presentations at the annual meetings of Engineers without
Boarders and Engineers for a Sustainable World. This sustainable agriculture project furthers
the EPA’s air and water pollution goals (CAA Section 103, CWA Section 104). Keyowords:
sustainable agriculture, food security, engineering economics, precipitation, soil, watersheds,
psychological.

                                               1
Research Plan

1. Project Description
i. Challenge Definition

Micro-finance is growing rapidly in developing countries and so are the environmental impacts
of the resulting development. In rural areas, micro-loans result in increased environmental
pollution when credit is used to finance application of pesticides and fertilizers, the conversion
of forest lands to croplands, and intensive cattle grazing (Lal and Israel 2006). These problems
are driven by the rapid expansion of agriculture in developing countries due to a doubling in
food demand by 2050 (Tilman et al. 2002) and escalating biofuels demand (Azar 2005).

An emerging approach to environmentally sustainable micro-finance is weather-indexed crop
insurance that dramatically improves land use efficiency (Planet) in developing countries while
benefiting rural economies (Prosperity) and food security (People). Many small farmers in
developing countries achieve extremely low crop yields because they cannot obtain the micro-
credit needed to purchase high-yield seeds and environmentally sustainable levels of fertilizers
(NRC 2008; Sachs 2007). Given these low yields, larger areas of land are needed to grow food,
resulting in increased conversion of forests to croplands and the resulting environmental
pollution. Often these farmers cannot obtain credit because of the risk that a drought would
cause crop failure. However, a precipitation-indexed insurance policy could help mitigate this
risk. Such insurance projects have recently been completed by the World Bank in Malawi,
Kenya, and Tanzania with promising results (Osgood et al. 2007). These insurance contracts are
based on precipitation measurements from rain gauges and satellites that trigger the insurance
payout in case of drought. The results suggest that a green agricultural revolution in Africa
should be supported by a financial revolution that utilizes such risk management techniques.

To scale environmental micro-insurance to a global level requires significant capital investment.
A U.S. non-profit, Kiva, developed an online person-to-person (P2P) micro-loan approach that
has effectively matched micro-investors in the developed world with micro-entrepreneurs in
the developing world. Kiva collaborates with micro-finance institutions (MFI) in developing
countries to obtain individual profiles of micro-entrepreneurs in need of loans. Micro-investors
can then log on to the Kiva website to chose which micro-entrepreneur to fund ($25 to $1200).
In three years this approach has achieved $50 million in loans with a modest 3.5%
delinquency rate.

With the recent success of Kiva in securing capital for microloans by means of a P2P approach,
we are compelled to believe that a similar approach might be successful with the novel
application to environmental micro-insurance contracts. The existing P2P loan approach has
been successful because it exchanges money for information in the form of the micro-
entrepreneurs profile and business diary entries. This information can be difficult to collect by
the MFI’s due to the remote location of the micro-entrepreneurs. Information might be easier

                                                 2
to collect by the P2P environmental micro-insurance in the form of automated measurements
such as rain guage data and satellite imagery. Furthermore the risk associated with weather
variability might be far more intriguing to potential micro-investors than the risk associated
with loan repayment delinquency.

While, a novel application of the online P2P approach with environmental micro-insurance
appears attractive for sustainable development, its design and effectiveness at recruiting micro-
investors is unknown. The design will need to translate streaming precipitation data into a
form that is relevant to the insurance contract and easily understood by the micro-investor.
The risk of a weather-related payout will have to be clearly and succinctly presented to the
potential micro-investors who are more familiar with risks associated with loan repayment
delinquency. Finally, the motivation for supporting sustainable agriculture development will
need to be incorporated into the website in a manner that draws the micro-investors to
participate and educates them with respect to these sustainability issues.

We hypothesize that an online P2P micro-finance approach with environmental micro-finance
would recruit micro-investors at the same level as the existing P2P micro-loans, while also
educating the micro-investors about the challenges to sustainable agriculture in developing
countries. We propose to design and build a model of online P2P micro-insurance based on the
P2P tools of Kiva and the precipitation-indexed micro-insurance projects completed by the
World Bank in Malawi, Kenya, and Tanzania. We will use the model in an experimental
assessment with human subjects at UC Merced, collecting active and passive data to measure
the likelihood that such an approach would successfully recruit micro-investors and educate
them with respect to sustainable agriculture. We will meet all EPA and UC Merced
requirements for studies using human subjects prior to implementing any work with these
subjects.

Our proposed project addresses the agriculture (EPA-G2009-P3-Q1) and information technology
(EPA-G2009-P3-Q4) research areas. The potential contribution to increased land use efficiency
and reduction in environmental pollution from agriculture furthers the EPA’s air and water
pollution goals (CAA Section 103, CWA Section 104). We will present our design and assessment
results to our partners at Kiva to demonstrate the potential for a regional deployment by Kiva
of our P2P environmental micro-insurance design.


ii. Innovation and Technical Merritt

Environmental micro-insurance and online person-to-person micro-finance are intimately
related, yet work has not been done to formalize the fundamental connections between them.
Environmental micro-insurance has been developed as a tool that can reduce environmental
degradation, improve food security, and benefit rural economies (Roberts 2005; Sachs 2007).
There is a need for this form of risk management in Africa where crop yields are a factor of
three less than on other continents (NRC 2008; Sachs 2008). Environmental crop insurance has
had promising results in Malawi, Kenya, and Tanzania (Osgood et al. 2007). However, for

                                               3
environmental micro-insurance to be scalable, significant investment is needed (Linnerooth-
Bayer et al. 2005). Previous applications of online person-to-person micro-finance by Kiva and
other emerging NGO’s have shown great promise in funding micro-loans by matching micro-
investors with micro-entrepreneurs in need of credit.

Our proposed project aims to combine the successful approach to online P2P financing used by
Kiva with the crop index insurance program piloted by the World Bank. Kiva is the world’s first
P2P micro-financing website, which enables individuals from around the world to lend to
entrepreneurs in developing regions. Although P2P tools have been enormously successful with
loans, they have not been implemented with other financial services such as index insurance.
The online model that will be created for this project will assess the likelihood that micro-
investors will contribute in a micro-insurance program at a similar rate as their current
contributions to the existing micro-lending services offered by Kiva.

This proposed project is well suited for our interdisciplinary student team which includes
environmental engineering majors to develop the content for this online tool, computer science
majors to translate this content to the interactive website, and psychology majors who would
lead the experimental assessment of the model. Our team will benefit from our faculty mentor,
Prof. Campbell, whose environmental engineering research includes a focus on sustainable
agriculture with respect to land use, carbon cycle impacts, and predicting crop yields. We also
have an interdisciplinary group of mentors including Premal Shah (expert in micro-finance,
President, Kiva), Anjali Khurana (expert in web design, Product Engineer, Facebook), and Joanne
Gaskell (expert in developing world agriculture, Research Assistant, Stanford University).

In our online model, the index insurance will be offered by MFI’s which create profiles of the
groups they wish to insure. The profiles will be posted on our website and will have a link to
take users to a secure lending page. The online user will contribute their desired amount of
funds to an individual or to a collective capital pool for the group they wish to insure. When the
specified amount of capital has been collected the MFI will issue an insurance package to the
designated individual or group, backed by the electronically collected capital pool. Should the
insurance package not have a payout event the funds will be returned in whole to the micro-
investor. However, if a payout event does occur, the capital pool will be used to pay for
damages and any funds left over will be returned to the investor with a letter explaining how
the money was used. Figure 1 depicts the lending process for our index insurance model.

The ability of the project’s website to successfully collect funds for the capital pool is of critical
importance to the project’s success. Steps will be taken to ensure that there is sustainable
interest in, and usage of the project website by potential micro-investors. To increase interest
in the site, several techniques will be utilized. Periodically, users will be sent email notifications
informing them about the weather conditions and how it has or has not affected the
individual(s) that they are insuring. Doing so will keep the user informed about the current
conditions and possible forecast of weather to come, which will illustrate the potential weather
effects on the insured individual. Streaming weather graphics will be displayed on the website
which will allow users to visualize the weather conditions and familiarize themselves with the

                                                  4
region. In addition, the streaming rainfall data will be used to update a payout graph the relates
the accumulated rainfall to the insurance payout trigger. The real time weather data will
present users with new information each time they log on to the site, possibly having the effect
of drawing the users back to the site.




Figure 1. Schematic of flow of information and funds in environmental micro-insurance.

The evaluation of the website will guide any needed changes necessary to improve the
website’s appeal to the public. The project's psychology team will recruit subjects who
participate in an experimental assessment as micro-investors in our online micro-insurance
simulation. The website shall be a comfortable online environment and shall clearly present
information on how the project works. The subjects response to the simulation will be
quantified through surveys (active data) to gauge their understanding of the website, to
determine their willingness to participate in the micro-insurance program in the future, and to
take their suggestions. The users activity on the website and their wiliness to follow links sent
to them by email will also be recorded (passive data).


iii. Relationship of Challenge to Sustainability

The environmental micro-insurance research of our proposed project would address the
Renewable Resources and Economics research themes in the EPA’s Sustainability Research
Strategy (EPA 2007). The Renewable Resources theme demands that we determine how best
to obtain to protect natural resources. The objective of environmental micro-insurance is to
increase the land use efficiency of agriculture and thus limit the amount of natural lands that
must be converted to crop lands. Furthermore our project designs and assesses an approach to


                                                       5
make the economics of sustainable agriculture more favorable for small farmers in developing
countries.

Sustainability has been defined as “meeting the needs of the present without compromising
the ability of future generations to meet their own needs” (World Commission on Environment
and Development 1987). Sustainable agriculture addresses this need by attempting to meet the
growing demand for agriculture products (food, feed, and fuel) while preserving natural
resources for future generations. By improving land use efficiency, environmental micro-
insurance works to reduce rates of tropical deforestation which contributes to water pollution
and significant emissions of greenhouse gases (Fargione et al. 2008).

People

There are nearly 900 million undernourished people worldwide and finding the means to
provide them a sustainable food supply is a grand challenge for the global community. An
emerging solution is weather-indexed micro-insurance for small farmers who improve their
food security by increasing average crop yields and rural incomes.

Prosperity

Weather risk leads to poverty traps when farmers consume their assets to survive which leads
to hardships down the road. For example, after a crop failure a farmer has no income and may
have to eat a cow used to plow the fields in order to survive. This poverty trap might have been
avoided with insurance that allows farmers to survive the drought years. Furthermore, drought
insurance gives farmers the opportunity to obtain credit to purchase drought-resistant, high-
yielding seeds that lead to further prosperity.

Planet

If the crop yields can be improved via environmental insurance, then the amount of land being
farmed can be reduced. This in effect reduces the impact that agriculture has on natural
systems through pollution runoff, water supply depletion, and deforestation. More abundant
farm yields equates to fewer farms needed to supply adequate food crops.


iv. Measurable Results

We will use the model in an experimental assessment with human subjects at UC Merced,
collecting active and passive data to measure the likelihood of participation by micro-investors.
The experimental data will be used to improve on our P2P-insurance design and to work with
our project partners at Kiva to determine the feasibility of a regional deployment by Kiva. We
will meet all EPA and UC Merced requirements for studies using human subjects prior to
implementing any work with these subjects.


                                                6
During a simulation with a subject, hypothetical profiles of farmers based on World Bank
examples (Osgood et al. 2007) will be posted on our website and will have a link to take the
subjects to a secure lending page. The online user will contribute their desired amount of
pseudo-funds to an individual or to a collective capital pool for the group they wish to insure.
We will randomly select from a statistically representative distribution of scenarios including
drought resulting in maximum payouts, a moderate amount of rain results in a partial payout,
and a good season resulting in no payout.

We will measure the likelihood that micro-investors will participate in an environmental micro-
insurance P2P website. Measurements with active data we will be based on a surveys given
before and after the simulation. We will also use passive data in our evaluation methods. With
passive data collection we will see how often users return to the website and see how effective
or successful any email announcements would be in getting subjects to click a link to return to
the website and check in on the status of the insurance package they helped fund. The subjects
will be given an account with a limited number of credits which they can use towards insuring a
farmer of their choosing based on the farmer’s profile. These test subjects will consist of
university students as well as community subjects who represent a range of potential micro-
investors.

We hope to find a way to make this website a success. Through testing our implemented
techniques, we hope to not only find the best way to grab and maintain interest of the people
who will invest, but to keep them coming back. Our goal will be to keep our users as active as
possible thus keeping them willing to continue to fund insurance policies.


v. Integration of P3 Concepts as an Educational Tool

The project will provide educational benefits through anticipated publications in the
International Journal of Service Learning, and presentations at the annual meetings of
Engineers without Boarders and Engineers for a Sustainable World. The proposed project is
also part of our service-learning coursework (ENG 097/197) which includes project-related
readings, group discussions, field trips, and writing assignments. We will also build an
informational website that will educate people about our project design and outcome. Finally
we will give presentations in other classes at UC Merced and Merced community events.


2. Project Schedule

Our proposed project schedule is a 9 month time frame broken into 3 week segments, of which
there are 12. The project is scheduled to begin August 15, 2009 and conclude May 15, 2010.
We will have written, analyzed and rewritten our site’s HTML code five times before coming up
with a completed website to present to our partner Kiva in early-mid April, 2010. We have also
allotted for time for the DC trip May, 2010.



                                                7
Project Task                                                                Trimester 1                     Trimester 2                     Trimester 3

                                                                            1       2       3       4       1       2       3       4       1       2       3       4

Trip to San Francisco to meet with partners                             x

Meet with Web Design Firm                                               x

Purchase Web Domain and Hosting                                         x

Create Initial Source Code for Site                                             x

Assess initial site with Partners                                               x

Make initial changes of site and make ready for limited access                  x

Create Trial site rev. 1 for testing purpose                                            x

Assess public's opinion of rev. 1 site                                                          x       X

Create Trial site rev.2 for testing purpose                                                                     x

Assess public's opinion of rev. 2 site                                                                                  x       x

Create Trial site rev. 3 for testing purpose                                                                                            x

Assess Public opinion of rev. 3 site                                                                                                            x

Create Final Site for presentation to our partners                                                                                              x

Creation of Final P3 report; Submit paper for publication in IJSL                                                                               x       x       x

Washington DC trip                                                                                                                                              x




                                                                    8
Partnerships

  1. Premal Shah, President, Kiva, San Francisco, CA, premal@kiva.org.
     Type: NGO
     Description: This project includes the use of the P2P micro-finance approach developed
     by Premal Shah and others at Kiva. Our team has met with Shah three times in the Fall
     of 2008 to develop this proposal. During the proposed project we would meet quarterly
     with Shah for feedback on the environmental micro-insurance design. We will present
     the results of our experimental assessment to Kiva to demonstrate the potential of a
     regional application by Kiva.
  2. Rosalina Aranda, Engineering Service Learning Program Manager, UC Merced,
     raranda@ucmerced.edu
     Type: Educational Institution
     Matching Contributions: $1000/semester
     Description: Much of the proposed project work will be executed as part of the UC
     Merced course title Engineering Service Learning (ENG 097/197). Aranda provides
     mentoring and resources for our team and other service learning teams at UC Merced
  3.
     including $1000 per team per semester ($2000 for the proposed project period).
  4. Anjali Khurana, Product Engineer, Facebook, anjalik@gmail.com
     Type: Industry
     Description: Khurana is an expert in web product development and will provide
     mentoring for our design of P2P web tools through quarterly meetings during the
  5.
     proposed project. In preparation of this proposal, we met with Khurana in Oct-08.
  6. Joanne Gaskell, Research Assistant, Stanford University, jgaskell@stanford.edu.
     Type: Educational Institution
     Description: Gaskell is an expert in food security for agrarian communities in the
     developing world and will provide mentoring for the our use of data from the African
     crop insurance projects of the World Bank. Gaskell will provide feedback on our
     approach through quarterly meetings during the proposed project.




                                            9
References


Azar, C. (2005). "Emerging scarcities – Bioenergy-food competition in a carbon constrained
         world." RFF, Washington, DC.
EPA. (2007). "Sustainability Research Strategy." U. S. E. P. A. Office of Research and
         Development, ed.
Fargione, J., Hill, J., Tilman, D., Polasky, S., and Hawthorne, P. (2008). "Land Clearing and the
         Biofuel Carbon Debt." Science, 219(1235), DOI: 10.1126/science.1152747.
Lal, A., and Israel, E. (2006). "An overview of microfinance and the environmental sustainability
         of smallholder agriculture." International Journal of Agricultural Resources Governance
         and Ecology, 5(4), 356-376.
Linnerooth-Bayer, J., Mechler, R., and Pflug, G. (2005). "Refocusing diaster aid." Science,
         309(5737), 1044-1046.
NRC. (2008). "Emerging Technologies to Benefit Farmers in Sub-Saharan Africa and South Asia."
         Committee on a Study of Technologies to Benefit Farmers in Africa and South Asia,
         National Research Council, Washington DC.
Osgood, D. E., McLaurin, M., Carriquiry, M. M., A., Fiondella, F., Hansen, J., Peterson, N., and
         Ward, N. (2007). "Designing Weather Insurance Contracts for Farmers in Malawi,
         Tanzania, and Kenya, Final Report to the Commodity Risk Management Group, ARD,
         World Bank." International Research Institute for Climate and Society (IRI), Columbia
         University, New York, USA.
Roberts, R. (2005). "Insurance of crops in developing countries." Food and Agrciulture
         Organization of the United Nations, Rome.
Sachs, J. D. (2007). "Sustainable developments - Making development less risky." Scientific
         American, 297(2), 33-34.
Sachs, J. D. (2008). "Sustainable developments - The African green revolution." Scientific
         American, 298(5), 42-42.
Tilman, D., Cassman, K. G., Matson, P. A., Naylor, R., and Polasky, S. (2002). "Agricultural
         sustainability and intensive production practices." Nature, 418(6898), 671-677.
World Commission on Environment and Development. (1987). Our Common Futurex, Oxford
         University Press, Oxford.




                                               10
Letters of Support




                     11
December 14, 2008



Dear Luis Bernardo:

I look forward to working with your student team in collaboration on the
investigation entitled “Design and Assessment of Environmental Micro-
Finance for Impoverished Farmers in Rural Africa”, that is submitted by your
faculty advisor, J. Elliott Campbell to the EPA P3 Research Announcement
EPA-G2009-P3-Q4. I intend to carry out all responsibilities identified for me
in this proposal. In particular, these responsibilities include providing
mentoring on the online person-to-person micro-loan approach employed at
Kiva. In addition, I will provide guidance in the interpretation of the
experimental assessment of your team’s P2P micro-insurance model. I look
forward to seeing a demonstration of your model and the outcome of your
assessment as I feel this environmental micro-insurance approach has great
potential to support sustainable agriculture and improve food security. Best of
luck in the review process.

Kind Regards,

Premal Shah
President, Kiva.org




                                        12
13
Dear Luis Bernardo

I am happy to write this letter in support of your student team’s investigation entitled “Design
and Assessment of Environmental Micro-Finance for Impoverished Farmers in Rural Africa”,
that is submitted by your faculty advisor, J. Elliott Campbell to the EPA P3 Research
Announcement EPA-G2009-P3-Q4. I intend to use my expertise in web development to provide
guidance on your online mircro-finance design through quarterly meetings. Furthermore, I
hope your project contributes to sustainable development.

Best,
Anjali Khurana




                                               14
12/16/2008



Dear Luis Bernardo

I am writing to acknowledge my support for your student team's proposed investigation
entitled "Design and Assessment of Environmental Micro-Finance for Impoverished Farmers in
Rural Africa", that is submitted by your faculty advisor, J. Elliott Campbell to the EPA P3
Research Announcement EPA-G2009-P3-Q4. I look forward to using my expertise in agricultural
economics and food security to advise you during quarterly meetings on your model of a
person-to-person crop micro-insurance website. This project is complementary to my current
research at Stanford.

Kind regards,



Joanne Gaskell




                                            15
Appendix

Background Information on Index Insurance

Index based weather insurance utilizes rainfall measurements to determine the payout
amounts that will be given to farmers. The main parameters that need to be established are an
exit, a trigger, and a maximum payout amount. All of these parameters are determined by the
historical and current meteorological data obtained in a region. The maximum payout is the
largest possible payout that a client can receive from the insurance package. The exit is the
maximum amount of rainfall that will result in the maximum payout. In other words, any
amount of rainfall under the exit will result in a maximum payout. The trigger is the maximum
amount of rainfall that clients can experience before they can no longer collect any payout. For
instance, if the rainfall exceeds the trigger, the client will not receive any payout. Therefore, any
amount of rainfall between the trigger and the exit will result in a payout of a certain
percentage of the maximum payout. The concept of how the payouts will vary depending on
rainfall is illustrated by the function of Payout = (1 – (Rainfall Sum – Exit) / (Trigger – Exit)) Max
Payout (Osgood et. al. 2007). The payout function is a linear function that ranges from no
payout to the maximum payout between the trigger and exit. This can be seen in the following
figure:




                                      Figure 1: Osgood et. al. 2007

There will be a time frame for when the insurance will be in effect. The insurance coverage time
frame should be broken down into phases. Ideally, these phases should correspond to the
growth stages of a particular crop. As a result, the crop itself will need to be evaluated to
determine its drought vulnerability and water stress level at different stages of growth. In
addition, it will be more beneficial to modify the length of phases and the triggers and exits to

                                                   16
more accurately address the stresses of the crop. For instance, the groundnut contracts for
Malawi have lower trigger levels and shorter phases for the first two phases where the
groundnut crop is most vulnerable to drought (Osgood et. al. 2007) since the triggers were
lowered, receiving a payout is less likely. However, this mainly protects the client from the
possibility of a major catastrophe early in the growing season. The last phase has a considerably
higher trigger and a much longer phase. Most likely during this phase, the clients will receive a
payment that should reflect their losses. Adjustments to the phases, trigger, and exit need to be
made to enhance the efficiency of the insurance.

While traditional insurance insure against crops failure, index insurance insure for a
measureable event such as rainfall deficits. Index insurance is more cost effective than
traditional insurance because index insurance makes use of meteorological data rather than the
physical in-field assessment of damages. Micro-finance insurance would use the advantages of
technology to update its users of any natural disaster threats to help farmers around the globe.
As the data in the Osgood et al. project shows, much of the success of index insurance is due to
the outstanding input and support of the regional project partners, especially the strong data
and analysis provided by the regional Meteorological services. The Osgood et al analysis states
that it is important to ensure that mechanism, such as the following meteorological services;
breeding programs, agricultural experiments, growth phases of crops and rainfall
measurements exist to provide resources for data collection, cleaning, reporting, and analyses.
Each implemented technological advancement available to provide information would play an
important role in using index insurances.

Index insurance acts to minimize a specific element of risk, such as rainfall or any other
particular natural disaster. It does not cover all risks. The current insurance design primarily
protects clients from losses due to the lack of rainfall. There is no clause in the contract that
protects them from losses incurred by having excess rainfall. An important trade-off for this
insurance design is simplicity over complexity. The design is relatively simple and is therefore
not a comprehensive form of insurance. It does not protect the clients from a wide range of
potential losses that they are likely to encounter during farming. With a more complex model,
the insurance should be able to efficiently address as many potential issues as possible by
introducing more parameters. By pursuing the more simplistic model, it is vital that the clients
have thorough understanding of their coverage.




                                                17
Budget
Budget Outline
                                                   Trimester 1        Trimester 2       Trimester 3


Travel to P3 Expo

Airfare ($500/person)                                   0                 0               $3000

Food ($35/day/person * 3 day)                           0                 0                $630

Ground transportation ($125/person)                     0                 0                $750

Lodging (3 shared rooms, $80/each)                      0                 0                $720

Equipment                                               0                 0                  0

Supplies

Laptop                                                  0                 0               $1000

Hats                                                  $150                0                  0

Large print media                                     $150                0                  0

F&A Costs (52%)                                       $156                0               $3172

                        Totals =                                                          $9728


Budget Justification
We have allotted for 6 members of our team to take part in each trip we will go on. The trip to
San Francisco will take place immediately and we will use dedicated UC Merced funds to shuttle
our team from Merced, CA to San Francisco, CA. The trip is roughly 300 miles trip and will
include dinner meetings with Premal Shah, President of Kiva and IT members of Facebook.

The final trip, the DC trip, is much more expensive as we will have to take Amtrak from Merced,
CA to Richmond, CA. From Richmond, CA we will take BART trains to Oakland International
airport and fly to Washington, DC. Modest per diem food will be provided as well for this trip.

Supplies include a dedicated web development computer for the design and upkeep of our
website as well as electronic data acquisition of survey results. Large print media are the
banners we will need for public display at conferences and tabling at campus events to recruit



                                              18
Resumes
                                        Elliott Campbell
         Assistant Professor, College of Engineering, University of California, Merced
                           http://faculty.ucmerced.edu/ecampbell3/

EDUCATION
BS         Stanford University, Civil & Environmental Engineering, 1998
MS         Stanford University, Civil & Environmental Engineering, 2000
PhD        University of Iowa, Civil & Environmental Engineering, 2007

EXPERIENCE
University of California, Merced, Merced, CA. Assistant Professor. (2008 – Present)
Sustainable bioenergy design and atmospheric pollution research.
Carnegie Institution of Washington, Stanford, CA. Postdoctoral Fellow. (2007 – 2008)
Production potential and climate effects of bioenergy systems.

MOST RELEVANT PUBLICATIONS
Campbell, J. E., Carmichael, G.R., Chai, T., Blake, N.J., Vay, S. A., Blake, D. R., Berry, J.A.,
Montzka, S.A., Schnoor, J. L, Stanier, C. O. (Accepted-In Revision), The photosynthesis basis
of plant uptake of atmospheric carbonyl sulfide, Science, 322(5904): 1085-1088.
Campbell, J. E., Fox, J. F. (2008) Carbon and nitrogen isotopic measurements from southern
Appalachian soils: assessing soil carbon sequestration under climate and land use variation,
Journal of Environmental Engineering, In Press.
Campbell, J. E., Lobell, D. B., Genova, R. C., Field, C. B. (2008) The global potential of
bioenergy on abandoned agriculture lands, Environmental Science & Technology,
doi:10.1021/es800052w.
Field, C. B., Campbell, J. E., Lobell, D. B. (2008), Biomass energy: the scale of the potential
resource, Trends in Ecology & Evolution, 23(2), 65-72.
Campbell, J. E., Moen, J. C., Ney, R. A. Schnoor, J. L. (2008), Comparison of regression
coefficient and GIS-based methodologies for regional estimates of forest soil carbon
stocks, Environmental Pollution, 152(2), 267-273.
Campbell, J. E., Carmichael, G. R., Tang, Y. H., Chai, T., Vay, S., Choi, Y. H., Sachse, G. W.,
Singh, H. B., Woo, J. H., Vukovich, J. M., Streets, D. G., Schnoor, J. L., and Stanier, C. O.
(2007), Analysis of anthropogenic CO2 signal in ICARTT observations using a regional
chemical transport model and its adjoint. Tellus, 59B, 199-210.

AWARDS: EPA P3 Honorable Mention (2006); NASA Earth System Science Fellowship
(2006); NCAR/MSRI Graduate Workshop on the Carbon Cycle (2006); Stanford Graduate
Fellowship (2000); Stanford Haas Public Service Fellowship (1999).

SERVICE: PNAS Reviewer (2007), ES&T Reviewer (2006-Present), IPCC Reviewer (2006).


                                                19
                                         Luis Bernardo
                                    Undergraduate Student
                    College of Engineering, University of California, Merced
           lbernardo@ucmerced.edu, (209)631-5695, 3110 Denver Ave # 1, CA 95340

EDUCATION

         University of California, Merced
         Intended Major: Mechanical Engineer, Applied Mathematics
         Intended Certificate: BS
         Coursework includes: Partial Differential Equations, Numerical Analysis, Engineering
             Economics, Thermodynamics.

         Merced High School
         Vice President of Movimiento Estudiantil Chicano de Aztlán (MEChA), Captain Soccer
         Team, member of the Poetry club.

EXPERIENCE

         Central Valley Opportunity Center, Merced, CA. (2004)
         Volunteer Teaching Assistant for emigrant summer school.

         Merced Community College, Merced, CA.(2006)
         Vice-President of the Science and Engineering Club.

         Merced Community College, Merced, CA.(2007)
         President of the Science and Engineering Club; Secretary of the Math Club.

UNIVERSITY ACTIVITIES

         Member of the ASME: Electric Car project.
         Leader of Team-Kiva Service Learning project.
         Member of SEA: Volunteer Tutor in Sciences.


AWARDS
    Merced Community College, Merced, CA.(2008)
    Best Engineering Student of the year (2008).

SKILLS
         Strong knowledge of Microsoft Word, Excel, Access, and PowerPoint. Bilingual
         Spanish/English, Mathematics, natural leader, Fortran, C++, Matlab.



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Current and Pending Support
This is just a place holder for this form
< http://es.epa.gov/ncer/rfa/forms/NCER_std_form_5-STAR_Grant_applications.pdf>




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