Charcoal use from cooking can be reduced by half if Liquefied Petroleum Gas (LPG) stoves are subsidized. A consequence would be reduced premature deaths due to indoor air pollution, as well as saved forests in Eastern Africa.
In his recent PhD thesis, “Essays on Field Experiments and Impact Evaluation,” at the University of Gothenburg, Remidius Ruhinduka gives some concrete policy recommendations on how governments can give the right incentives to increase urban households’ use of LPG stoves.
What is your thesis about?
“One theme in my thesis is what can hinder people in starting to use new, environmentally friendly technology. This is important for policy makers to understand, so that policy design meets people’s realities when behavioral change in society is needed. One example I investigate in my thesis is the use of LPG stoves (Liquified Petroleum Gas) in urban Tanzania. The high start-up cost of switching to modern cooking technologies, such as buying a new stove, has been shown to be the key factor that stands in the way of changing from charcoal to relatively cleaner LPG stoves in Tanzania.
In collaboration with a local microfinance institution, we gave different households the opportunity to either get a loan and buy an LPG stove on credit or buy an LPG stove at a reduced price. The results show that both access to credit and subsidies reduced charcoal use substantially, but with credit the reduction was by 41% and with subsidy 54%, which implies that a subsidy is more effective.”
What do you think are your most interesting findings?
“Addressing financial constraints among urban households could reduce charcoal consumption by almost half. This is good news from an environmental point of view. Also, the fact that a subsidy has a larger impact than credit has policy implications regarding how to scale up these results to a larger population. These findings are very timely, due to the recent discovery of huge naural gas reserves in Tanzania. A message to our policy makers is that reducing the import duty on LPG stoves could increase their use, and consequently reduce charcoal consumption. Urban households need real incentives to switch to clean energy sources and save the remaining forest resources of Africa. This paper gave me very personal satisfaction as a researcher. It showed that people can change given the right incentives.”
Why is this research important and who can benefit from it?
“Forests are cut down to produce charcoal and people die of indoor air pollution. People don´t need to risk their health and die early due to indoor pollution or other climate change-related disasters. This research addresses the constraints people face when switching to a new technology and shows that these constraints can be addressed, both in a Tanzanian setting and in other developing countries. Households will benefit if governments acknowledge our results and reduce import duties on LPG stoves. If so, the product will become cheaper for households. Society at large and the climate benefit since forests can be saved. Also, microfinance institutions can learn from this study, in understanding peoples’ incentives to repay credit provided under different schemes.”
What do you hope that your results can contribute to?
“EfD Tanzania will be organizing a policy workshop in January 2016, with invited participants from the ministries of energy, agriculture and finance and also the National Bureau of Statistics. I will be presenting my research findings during this workshop and hope that there will be a lot of interest in the results. We argue for a policy that encourages a switch in energy use rather than just decreasing the amount of biomass used. We will also need to make the politicians understand that there could be financial benefits, as well as health-related and environmental ones. For example, if the government loses revenues on import duties, it can gain some revenues on increased volumes of natural gas sold.”
Now that you have completed your doctoral studies, what will you do next?
My current plan is to go back to my country, Tanzania, and to make sure that I use the training I got from the University of Gothenburg to impact my society in a positive way. I work for the Department of Economics at the University of Dar es Salaam, which is a training hub for a large number of students (both undergrad and graduate level) from different countries in Sub-Sharan Africa. I hope to share my knowledge through teaching this large pool of future African economists. I also plan to speed up my research work. I am glad to be part of the Environment for Development (EfD) network, which provides me with an excellent platform to spearhead my research work. I already have a couple of ongoing research projects that have received funding from EfD and the International Growth Center (IGC) that I will continue working on as soon as I am settled in Dar es Salaam. This is the starting point to my post-doctoral research career.”
Link to Remidius Denis Ruhinduka’s thesis http://hdl.handle.net/2077/40983