Sustainability Science Program

Can Regulation Reduce Household Use of Polluting Fuels?

Overview

Can Regulation Reduce Household Use of Polluting Fuels?

Margaret McConnell

Close to half of households in the developing world use traditional fuels as their primary source of energy. The World Health Organization (WHO) World Health Report 2002 estimates that indoor air pollution accounts for almost 4% of lost years of life in the developing world (WHO 2002). Moreover, indoor air pollution can have serious economic consequences (Duflo et al. 2008). An alternative to biofuels that offers clear health benefits would be the adoption of the more modern Liquid Petroleum Gas (LPG) fuel stoves. While households have access to many alternative fuels, conversion to modern fuel technology is often slow. Many households in poor areas use a variety of different fuels simultaneously, switching from cooking with traditional fuels such as charcoal and wood to modern fuels like LPG in a single day of cooking. However, most data collected around household cooking patterns collects information only about households’ primary fuel source. In order to understand why households use mixed fuels, better data is needed to understand how price, availability and convenience contribute to the choice of fuel source.

In this project, funded by the Governance Initiative, the research team is examining how to make the most effective use of subsidies (both demand- and supply-side) in encouraging households to change their cooking behaviors. A crucial component of the transition from traditional fuel to modern fuel technologies is the ability of supply channels to make modern fuel affordably available to a wider portion of the population. Suppliers may assume that the poor have low demand for costly improved fuel technologies and may face low incentives for experimenting with new delivery channels for poor communities. Better regulatory practices could alleviate the supply-side barrier to the adoption of modern energies by ensuring they are both affordable and widely available. In order to achieve this objective, governments could directly subsidize household purchases of alternative energies or provide grants for improving the delivery of alternative energies in under-served areas. However, without corresponding changes in demand for alternative energies, expanding supply may not produce sustainable changes in energy practices.

Researchers are investigating the potential effectiveness of subsidies to modern fuels, especially in urban areas where modern fuels are readily available. This study will provide valuable information to regulators about the effectiveness of fuel subsidies in encouraging the adoption of modern fuels.

McConnell is collaborating with Innovations for Poverty Action to conduct two simultaneous weekly longitudinal surveys in Accra, Ghana in an urban neighborhood with access to LPG but low use of the gas. The first survey covers 120 households, measuring their weekly purchases and use of an array of different fuel types. The second survey collects data from 20 suppliers of charcoal, LPG and wood in the geographic area of the surveyed households to simultaneously track the availability and price of fuels. Together, the two surveys will help better understand how households respond to short term changes in fuel prices and availability by suppliers. Survey work is ongoing, and complete data collection is expected by the end of 2013.

References

Duflo, E., Greenstone, M., & Hanna, R. (2008). “Cooking stoves, indoor air pollution and respiratory health in rural Orissa.” Economic and Political Weekly: 71-76.

World Health Organization (2002). The World Health Report 2002: Reducing Risks, Promoting Healthy Life. Available at http://www.who.int/whr/2002/en/ (accessed 30 September 2013).