| Boiling Point No. 25 - August 1991 |
Reproduced (abridged) from "Urban Edge" of May 1990 (published by the World Bank - the views and interpretations contained in the newsletter are those of its editors and contributors and should not be attributed to the World Bank)
Last year, developing countries spent about $50 billion on energy, $17 billion drawn from the international community - the bulk of which was for multi-million dollar electrification projects.
But while countries in the Third World scramble for ever greater sums to increase their energy output and service the debt from previous investments in this sector (an estimated $100 billion is sought this year), half the world's population relies on woodfuels (firewood and charcoal) to cook and boil water and in some areas, for heating: across the Third World, daily woodfuel consumption is equal to 21 million barrels of oil, or the total pumped by OPEC countries each day.
Despite these figures, governments, as well as bilateral and multilateral donors, have tended to ignore woodfuel issues - focusing mainly on electrification projects linked to development. This is partly because woodfuel shortages - and thus the growing crisis - are not all that apparent. In some countries, market stalls are still flush with wood or charcoal, and neither the public nor the authorities perceive that abundance is illusory, since the supply is harvested from ever more distant woodlands, some as far as 300 kilometres from urban centres.
The problem with such single-mindedness is that the woodfuel supply in some areas has nearly vanished. In Haiti, Ethiopia and Sudan, major cities are encircled by rings of woodless wastelands.
According to most observers, the situation can only get worse, as the demand for woodfuel - firewood and charcoal - is intensifying. In fact, current use may be far greater than estimated, since a good deal of informal sector activity, like roadside food stands, beer making and brick and tile production, relies on woodfuels, says Carolyn Tager, an economist in the household energy unit of ESMAP (Energy Sector Management Assistance Programme - a joint UNDP, World Bank and bilateral aid-supported programme). Such activity can account for as much as 20% of the total woodfuel consumed in urban areas. Most important, household demand in the cities is soaring. This is because the cities themselves are exploding - in Africa, for example, many are doubling in populationin 20 years. Al ginger, President of the Biomass Users' Network, a southern organization with headquarters in Costa Rica, explains, "This is not due to 'natural growth', but because of the steady stream of rural migrants who move to the cities, searching for jobs".
Once the newcomers settle, they rarely collect dead wood or take what they need from the family plot as they did when they lived in the country. So they must buy their cooking fuel; but because they are poor, they cannot afford alternative fuels, such as kerosene, LPG or electricity. Even if the fuel costs the same as wood or charcoal (as kerosene occasionally does), the stove needed to bum it is well beyond the means of the poor - up to 10 times as expensive. The traditional three-stone stove, although less efficient, costs nothing and charcoal stoves are relatively cheap.
Most of the wood loss is due to clearing of previously undeveloped land primarily for agricultural purposes. In fact only a small portion of the trees are cut directly for household energy needs - with estimates placed at about 20% of the total.
At the human level, it is the urban poor, as is often the case, who are hit hardest. Because they can only afford to buy small amounts - as they rarely have enough money for more than a day's supply and have little room to store larger quantities - the cost is always higher than when buying in bulk. What this means is that fuelwood absorbs from 10 to 20% of the income of the poorest, sometimes even more than the amount spent on food.
The policies suggested vary, however, because observers disagree sharply about their effectiveness. In fact, some argue that the strategies most frequently suggested look good on paper but are difficult, if not impossible, to implement.
In general, solutions focus on three courses of action:
- conserving existing supplies by controlling where, when, and how much of certain species may be cut, as well as promoting more efficient methods of charcoal production;
- replenishing and increasing the supply by promoting planting of seeds and seedlings, involving the forestry service, farmers, individuals, or whole communities;
- reducing demand, by encouraging households either to cook with wood or charcoal stoves that use less fuel, or to switch to alternative fuels, such as kerosene or LPG, or those produced from industrial or agricultural wastes.
Another strategy is to turn the management of the woodlands over to communities or villages. The advantage, says Willem Floor, a household energy economist at ESMAP, is that instead of the focus being on enforcement, which is difficult to achieve, it is on providing incentives that will motivate people to cooperate.
He cites a project in Niger, where rural people have been given exclusive tenure or long-term users' rights to certain parcels of land that allow them to harvest wood from these areas. They can consume or sell it, but if they choose the latter, they must do so at a certain locale, where traders who sell the wood in the cities come to buy it. The villagers are also responsible for preventing animals from grazing on the sections where new shoots are growing.
The villagers benefit because the sales supplement their incomes. Traders benefit as well, because they can collect their stock in one place, instead of having to travel around the rural areas: they save time and as a result, profits increase. At the site of the transactions, forestry staff give the traders certificates of origin that permit them to sell the wood in the urban market, and they must present these receipts at checkpoints located on the outskirts of cities.
"Although the project in Niger has only been under way for a year, it seems to be working. One bottleneck in this arrangement will be in the area of organization. The plan is very dispersed and depends on a good many individuals functioning in a concerted fashion. Further, we don't yet know if the villagers will feel the extra income is worth the effort, or if they can get more money doing something else. But we will know the answers to both issues in a relatively short time," Floor says.
ESMAP's Forestry Economist Mr Openshaw says "Rural people know what is happening in these areas, and if they have a vested interest, they will get involved in protecting the forest. In some regions in India, this is already happening. The point is that if they want to keep it renewable, they can only take out what is grown that year." He adds that to encourage this, the price of wood must increase so that both the rural people and the government benefit (the latter, since it will be paid increased fees for wood extracted from national land).
He admits that, in the short run, the cost of woodfuel might rise, as charcoal producers and traders pass on the new fees to the public. But, in the long run, it is expected that higher profits would encourage more producers into the market, which in turn would increase the supply and lower prices.
When a variation of this plan was introduced in Malawi, however, a problem developed: "Since it was a communal activity, no one took responsibility to manage it" said Mr Belo of the Malawi Department of Forestry. Thus some way must be found to correct this, he adds. In Malawi, because the government found that tree planting on government plantations was quite costly, it decided to encourage the public to become involved. In 1976, government nurseries sold seedlings at subsidized prices, with the hope that various sectors and institutions - for example, farmers, schools, individuals, local governments, churches and other associations - would participate.
The initial response was almost negligible; by 1980, only 250,000 seedlings had been distributed. By 1987, however, the number had reached 22.6 million. The dramatic increase, Mr Belo explains, was because the government opened additional nurseries in the rural areas and authorities promoted the programme on the radio, in pamphlets and at political meetings, telling people where the nurseries were located and what kinds of seedlings were available. Equally important, no restrictions were placed on whether the trees had to be grown for personal use or sale.
The shortcoming with either tree-planting or forest management schemes, says Mr ginger, is that the wood will be sold where it will bring the greatest profit, which means either to local industry or as poles, for building. In Gujarat, India, farmers grow trees for commercial energy and sell only the surplus on the woodfuel market. He notes that to make it economically viable to grow trees for woodfuel, the price of wood or charcoal has to be 2 to 3 times the going rate and governments are unable to set prices for either of these products.
However, sales to industry or the timber market are limited, while between 80-90% is used for fuel. So if rural people want to increase their income, they have to sell the cuttings for woodfuel after a certain point - even if they earn less profit by selling to this market.
According to Mr Floor, by failing to develop the woodfuel sector, governments are also missing important economic opportunities. "The wood and charcoal trade is big business. In Mali, for example, it's valued at 10 billion francs (CFA) a year. Moreover, it employs far more people than the power sector - about 50,000 work in the charcoal trade in Haiti and Zambia, while 30,000 are involved in producing and selling firewood in Cameroon. Thus governments could raise revenues substantially if they promoted this sector."
Equally important, says Mr Floor, "woodfuels save desperately needed foreign exchange, while converting urban households to modern fuels will increase oil import bills to levels the debt-ridden LDCs cannot afford."
Projects were launched in Burkina Faso and Mali to correct these flaws, develop the means to evaluate which stoves were best, improve the fuel efficiency of wood burning stoves (to lower fuel consumption and reduce the pressure on the region's wood supplies) as well as decrease the workload of women by shortening the time needed to collect fuel.
Ms Crouch of Vita News explains that the improved metal stoves are extremely popular. "We don't have to convince women to use them - they are quite able to see how efficient they are and they pay for themselves in a matter of weeks. But the problem is affordability. Many women still use three stone stoves because they just don't have the money, since the stones are free and this stove is 1,200 CFA francs, or four times more for the bigger one.
Ms Crouch notes there was "a lot of romantic nonsense in early stove projects about developing ones that women could build themselves. But this was unrealistic, as there was no way to assure quality control. Further, it would have taken an army of extension workers to meet with women all around the region".
Nevertheless, at present, there are far too few stoves to meet the demand, so ways must be found to increase production, thus moving out of the informal sector. Ms Crouch states that if small factories were created, economies of scale could be gained, for example by buying raw materials in larger quantities. And this in turn, could reduce the consumer price. She also suggests that projects must help organize producers, for example, to buy supplies cooperatively, besides providing them with new technology and training them how to use it.
Ms Crouch and others involved with these projects observe that, although the improved stoves save on fuel, it appears that fuel consumption does not decline as a result. Rather, nutrition and health improve, because women use the money they save on fuel to buy extra food and cook more than before.
According to A Churchill, Director of the Industry and Energy department at the World Bank, because woodfuel is running out, countries have no other option but to encourage urban households to switch from wood and charcoal to fossil fuels such as kerosene, gas or electric stoves.
But, insists Mr Churchill, prices could drop if authorities took certain steps. He notes that at present kerosene is imported in African countries for about US$22 a barrel, but by the time it is sold to small consumers, it costs as much as $80 - often the result of artificial monopolies. He contends that if competition were introduced, the price would come down.
Critics respond that promoting the use of kerosene in oil importing countries will only add to their already onerous debt problems. "In Jamaica, half the foreign exchange earned goes to pay the foreign debt. About $260 million, or one quarter of the foreign exchange budget, is already earmarked for oil imports. So increasing this amount would only make a bad situation worse" says Mr ginger. He adds that between 1972-1988, energy prices jumped so dramatically that many Jamaicans who had switched to kerosene or LPG returned to woodfuels.
However, Mr Churchill observes that the urban poor use very little fuel - the average family burns just one quarter of a gallon of kerosene a day, while it takes 15 gallons of gas to fill the average car. "If authorities would divert just 5% of their energy budget to kerosene for household needs, this amount could provide fuel to an entire urban area", he says. He notes that the issue is a matter of policy - whether countries continue to import gasoline for the cars of the rich, or kerosene for the public to cook with.
He adds that a move to alternalivc fuels could benefit the poor indirectly. While very low-income families will not be able to afford kerosene, others will; and this will take the pressure off the woodfuel market, which should allow prices to drop. In the same fashion, he notes the commercial and household sectors are tightly linked; that between 25 and 50% of woodfuel is consumed by businesses such as laundries, restaurants and food-processing plants. He suggests that fuel programmes could first encourage these large users to switch, instead of focusing on thousands of households, since this would be a more manageable goal. If substitution were achieved, it would free up more woodfuel for the household sector.
Mr Floor explains that switching normally occurs when the distribution system is well organized, when families have the income both for the fuel and stove, when the fuel is accessible and when the price is attractive, relative to other fuels.
The views quoted in this article are clearly those of a cross section of people working in the World Bank's Energy Programme. Many readers may disagree with some or all of what is said. Reactions would be most welcome for publication in future issues.