The specific objectives of study include, a review of literature on energy demand, choice and distributional effects of energy fuel taxes in Kenya; examine the current demand for energy and determine the key drivers of consumption; evaluate how household make choice in energy consumption; estimate distributional effects of energy fuel taxes in Kenya and lastly provide
Many countries in the developing world have in the recent past witnessed an increasing demand for energy. The energy that is mostly consumed included electricity, fossils fuels and renewable energy. Due to increased economic activities and surge in population growth, the demand for energy has surpassed the supply in many of these countries. In Kenya’s power sector, the available capacity is far less than demand. Likewise, the demand for automotive gas oil, gasoline, kerosene and LPG among other petroleum products has also witnessed enormous increases. In addition, biomass still provides bulk of energy consumption, accounting for over 70 percent of total energy. The goal of this project is to analyze energy demand, choice, and distributional effects of energy fuel taxes and provides recommendation on best practices for Kenya with regard to demand management, consequences of these energy choices made and how to deal with progressive or regressive taxes in the sector in light of environmental sustainability and equity issues. The study will basically examine distributional effects of energy taxes in Kenya and how this relates to sustainability of the environment. The study will provide policy recommendations on demand management, choice and distributional effects of energy taxes in Kenya. In addition it will provide to the existing knowledge and literature in energy economics. It will to produce at most four referred journal articles. The study will be implemented through collaborative research and will be done in Kenya.