Clean, convenient, and fiscally equitable: household energy for cooking

Choice of energy for cooking affects the wellbeing of children and women disproportionately. Fully capturing the health benefits of clean energy requires not only adopting non-polluting practices but also abandoning polluting ones. Many governments have provided universal price subsidies for cooking gas in the belief that such support will enable its sustained use by the poor, but in practice the rich benefit far more. Using cooking gas as an illustration, this column argues that while no government can hope to achieve universal access primarily by subsidizing clean energy, faster progress can be made by better understanding household behavior and market dynamics.

The traditional use of polluting fuels by households has high economic costs: smoke emitted causes 3.2 million deaths and many more illnesses a year, while time spent collecting free biomass harms children’s education and adults’ productive activities.

The richer half of the world uses only electricity and gas for cooking for convenience and cleanliness. For households that want to cook with gas, piped gas is preferred, but in its absence, bottled gas is most commonly used. Other technologies—such as solar cookers, ethanol stoves, and biogas stoves—are used far less for a variety of reasons. Advanced-combustion biomass stoves are emerging as a clean and potentially lower-cost option.

Electricity may not be a viable option where there are acute power shortages and rolling blackouts. Power shortages and the absence of natural gas pipelines characterize sub-Saharan Africa, which lags all other regions in access to clean cooking fuels and technologies.

Limits of fiscal support

By far the greatest barrier to achieving the United Nations’ goal of universal access to affordable, reliable, and modern energy services by 2030 is financial. To overcome the financial barrier, governments have provided universal price subsidies, and those for bottled gas remain prevalent in many developing countries.

But decades of such fiscal support show not only that universal price subsidies for bottled gas are highly regressive, benefitting the rich far more than the poor, but also that they are fiscally unaffordable and no country can hope to ‘subsidize its way out’ of the access problem. Recently, several governments have shifted from universal to targeted subsidies, thereby making them more progressive and limiting the fiscal burden, although with varying degrees of success.

These subsidy reforms faced new challenges as international prices rose steeply from late 2020 to mid-2022 while many countries’ currencies depreciated. As a result, several governments have reversed their reforms and brought back universal price subsidies—El Salvador and Peru among them. Where no subsidies are provided, retail prices have soared, as in Nigeria, where the cost of refilling gas cylinders doubled between August 2021 and June 2022.

What about densified pellets?

One way of avoiding the volatility of global fuel prices is to rely on advanced-combustion stoves burning densified pellets using locally sourced biomass. If operated as designed and maintained properly, these stoves slash emissions of harmful pollutants. Advanced-combustion stoves may therefore hold the best promise, particularly for rural households.

To reap the full benefits, some work remains. Where end-users are largely households, achieving requisite economies of scale for cost-effective pellet production calls for widespread adoption combined with regular use. To avoid excessive emissions of pollutants, it is imperative to use the right start-up materials and pellets of the correct size. Reloading pellets during cooking and letting the ashes smolder afterwards can also increase emissions significantly.

Component failure, especially of batteries, is not uncommon, increasing emissions and requiring repairs or replacement that can be costly. Automating the initial ignition and continuous pellet feeding will add to the cost but control pollutant emissions more effectively. More efforts are needed to resolve these problems for stove adoption at scale.

Using only clean fuels and technologies

To protect health, households need to abandon polluting practices. There is ample evidence that this is much more difficult to achieve than adoption of clean energy. Abandonment is also difficult to measure, as a result of which tracking of progress toward universal access collects data on primary energy use but not abandonment. Fuel stacking—whereby households that have adopted clean fuels and technologies continue to cook with kerosene, charcoal, wood, and other solid fuels—is common even among the rich in many developing countries.

A recent study of sub-Saharan African households that cite bottled gas as their primary cooking fuel finds, unsurprisingly, that abandonment occurs among the better off. These ‘abandoning households’ also tend to be smaller than fuel-stacking households that retain polluting fuels. These findings might suggest that cooking exclusively with bottled gas is easier when preparing small meals.

But the observed pattern cannot be simplified to ‘the smaller the household, the more likely to abandon’. The average size of the fuel-stacking households in the top 20% of income groups was smaller than the average size of the abandoning households in the next 20%—despite the abandoning households being poorer. That is, reasons other than purely financial seem to explain who abandons and who stacks polluting fuels.

Aside from personal and cultural preferences, one possible explanation is the state of the market, including the reliability of supply, the ease and transaction cost of refilling cylinders, and the degree of commercial malpractices in the market, such as rampant underfilling.

Conclusion

A critical policy challenge is how to promote adoption of clean fuels and technologies, and, over time, abandonment of polluting energy practices. Universal price subsidies are not cost-effective even for adoption because the rich consume far more energy than the poor. Because abandonment occurs primarily among the better off, government subsidies would be even less equitable and cost-effective.

By contrast, anything that can lower the effective prices paid by consumers and make fuel purchase more convenient—setting stove efficiency standards and enforcing them, setting penalties for underfilling sufficiently high and collecting them fully so as to make it not worth attempting, and creating healthy and fair competition in the market—will help to accelerate progress toward universal access and abandonment without incurring large fiscal costs.

For those cooking with biomass, when high combustion efficiency—which reduces pollutant emissions—is combined with high heat transfer, households use less fuel while protecting health, thereby lessening both the financial and health burdens of cooking. Because the markets for advanced-combustion stoves are still in their infancy, some government support may be helpful. In providing assistance, lessons from past government support for household energy point to the importance of carefully considering fiscal sustainability and avoiding economic distortions.

 

Author:

Masami Kojima is a Lead Energy Specialist in the Energy and Extractives Global Knowledge Unit, Energy and Extractives Global Practice, at the World Bank.