Journal
ENERGY POLICY
Volume 75, Issue -, Pages 217-227Publisher
ELSEVIER SCI LTD
DOI: 10.1016/j.enpol.2014.09.017
Keywords
Fuelwood scarcity; Shadow price; Energy substitution; Rural household; Welfare effect; Energy access
Funding
- Dr Hermann Eiselen Doctoral Programm of the Foundation fiat panis
- Deutscher Akadamischer Austschedienst (DAAD)
- German Federal Ministry for Economic Cooperation and Development (BMZ) via project Bioenergy, Bioeconomy and food security
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In Ethiopia biomass is predominantly utilized for household energy needs often using inefficient rudimentary stoves which cause adverse environmental and welfare effects. This paper examined the contribution of biomass resources to rural household energy use and energy substitution. The analysis applied the ordinary least square in the final stage estimation of fuelwood and overall biomass energy consumption by using predicted shadow prices. The paper used Tobit model to estimate charcoal and agricultural fuel consumption due to the presence of censoring. An increase in fuelwood shadow price was associated with reduced household fuelwood consumption with price elasticity of -0.38. The cross price elasticity between fuelwood and agricultural fuels revealed no evidence of energy substitution, which conforms to the findings of previous studies. Household access to electricity was associated with lower household biomass energy utilization but kerosene was not fiielwood substitute. Household energy use conformed to the 'fuel stacking' or 'multiple fuel use' concept, but households preferred modern energy options as welfare increased in areas where modern energy is available. This suggests that there is a promising prospect for fuel-transition, but access to modern energy and economic growth have key roles. The findings suggest that a concerted policy effort is required that would help diversify rural livelihoods, improve living standards and encourage economic growth, encourage inter-fuel substitution through improved modern energy access and afforestation to increase biomass supply. (C) 2014 Elsevier Ltd. All rights reserved.
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