14. The crisis of rural energy in developing countries

Kunio Takase

1. The background of the study

Since the World Commission on Environment and Development published its report entitled Our Common Future (WCED, 1987), a number of international conferences have been held to minimize the hazards of indiscriminate exploitation of natural and ecological resources and, at the same time, to eradicate poverty in the developing world. In spite of many agricultural studies on existing environment and resource management in the rural development sector, little effort has been made to analyse and synthesize them into action programmes to form the basis of socio-economic development in the third world.

It was in this context that in 1990 the Japanese Ministry of Agriculture, Forestry, and Fisheries, through the International Development Centre of Japan (IDCJ), initiated a comprehensive four-year study entitled "Global Environment and Agricultural Resource Management." The study has four main focuses, each of which has become a topic of the year with a three-country case-study, as follows:

1.	1990/91:	Slash-and-Burn Cultivation (Brazil, Nigeria, and Indonesia)
2.	1991/92:	Overgrazing and Land Degradation (Syria, Kenya, and Bolivia)
3.	1992/93:	Fuelwood Harvesting and Forestry Degradation (Mali, Honduras, and Nepal)
4.	1993/94:	Land Degradation by Soil Salinization and Erosion (Pakistan, Egypt, and Mexico)

This paper is based on the IDCJ Mission's study in 1992/1993. Figure 14.1 is the IDCJ Mission's schematic concept of socio-economic development and global environment, finalized after a series of discussions between the Mission and its partners in the 12 countries and international organizations visited by the Mission.

At the top of the scheme, the Mission placed "population explosion and economic growth" as given propositions of socio-economic development and the main causes of environmental destruction. Three major development sectors ("rural development," "industrial development," and "urban development") are placed at the second level.

The "industrial development" sector has three major environment-related development objectives, namely "wood production," "water resources," and "energy resources." The major energy resources, such as fossil fuels (e.g. coal) and nuclear power, are not free from environmental destruction, resulting in greenhouse effects, acid rain, and nuclear waste. Frequent use of gas is also harmful, because it creates an ozone layer hole. "Wood production" requires cutting trees and inevitably involves the extinction of species, greenhouse effects, forestry degradation, land degradation, and soil erosion, and finally results in grassification and desertification. The "urban development" sector comprises the areas directly affected by population explosion, particularly in developing countries. Inadequate habitation causes health hazards and diseases. Massive unemployment leads to further deterioration in low-income families' living conditions and accelerates urban pollution. These two development sectors are, however, not directly related to agriculture and rural development per se, and major international efforts, governmental and non-governmental, are already under way in these problem areas.

The Mission's main focus is, therefore, the "rural development" sector, in which "food production," "enterprise" (income-oriented agriculture), and "fuelwood" (energy source for home consumption) are the major development objectives. In particular, food production has been the top priority in the world since the end of World War II owing to continuous and accelerating population explosion. It takes different forms, such as slash-and-burn cultivation, pasturage, migration, modern agriculture (supported by chemical products including fertilizers and insecticides derived from "energy resources"), and irrigation and drainage (supported by "water resources"), while agricultural enterprise is often associated with plantations, including non-food products such as rubber, coffee, and fibre crops. These activities, if carelessly planned and implemented (as in many cases in the past), contribute a great deal to environmental destruction including forest degradation, land degradation and soil erosion, and desertification, as shown at the bottom level in figure 14.1. Such environmental destruction is intricately connected to poverty, which further accelerates environmental destruction, thus forming a vicious circle with irresponsible development efforts.

Fig. 14.1 The IDCJ Mission's schematic concept of socio-economic development and global environment (Note: This diagram is not intended to be exhaustive or definitive in explaining all factors concerning socio-economic development and the global environment, but facilitates a systematic way to carry out the four-year-study without losing sight of the entire conceptual framework)

The statistics show that the major causes of forest degradation are slash-and-burn cultivation (45 per cent), overgrazing (30 per cent), and "other," including fuelwood harvesting (25 per cent). The Mission adopted a theme for each year on this basis. In accordance with the emphasis in each year, a step approach was taken (1, 2, 3, and 4) in the scheme, so that the four-year study was able to maintain its systematic approach without losing sight of the overall conceptual framework. It was the Mission's conviction, after the field trips, that "technical innovation," "financial resources," and "implementing capacity" supported by "political will" and "people's participation" (see fig. 14.1) are the minimum requirements to prevent environmental destruction and to maintain compatibility between development and the environment. This schematic concept is considered to be a good starting point for logically organizing many complicated and integrated factors related to the "three Es," namely energy, economy, and environment.

2. Global forest resources

The global forest area is estimated to be in the range 3-6 billion hectares (ha) and its share of the global land area to be between 20 and 45 per cent. The large ranges in these statistics are due to the inaccuracy of the basic data available, particularly in developing countries. Table 14.1 shows forest areas in the world in 1980. The total forest area was 4,300 million ha (32 per cent of total land area) and, in addition, forest in fallow and bushes occupied 1,000 million ha. This makes the total area of woody vegetation 5,300 million ha, or 40 per cent of the total land area of the world.

Table 14.1 Global forest resources, 1980

	Forest areaa (million ha)	% of total land	Forest area per capita(ha)	Forest in fallow and bushes (million ha)	Total area of woody vegetation (million ha)
World	4,320.5	32.3	0.9	1,030.4	5,350.9
Developed countries	1,967.8	34.8	1.6	0	1,967.8
North America	734.5	37.9	2.4	0	734.5
Europe	158.9	30.5	0.3	0	158.9
Japan	25.3	67.9	0.2	0	25.3
USSR	928.6	41.5	3.5	0	928.6
Othersb	120.5	13.1	2.3	0	120.5
Developing countries	2,352.7	30.4	0.7	1,030.4	3,383.1
Africac	739.6	25.4	1.6	608.3	1,347.9
Latin America	987.6	48.2	2.8	313.4	1,301.0
China	170.0	17.7	0.1	-	170.0
Asiad	272.8	17.8	0.3	62.2	335.0
Oceaniae	182.7	66.3	0.3	46.5	229.2

Source: FAO, Forest Resources 1980, Rome, 1985.

a. Total of closed and open forest.
b. Australia, New Zealand, Israel, South Africa.
c. Excluding South Africa.
d. Excluding Japan, China, and Israel.
e. Philippines, Indonesia, Brunei, Papua New Guinea, etc.

The total growing stock of wood resources in the world is estimated at 340 billion m³ and the average wood-growing stock is calculated at 80 m³/ha. The per capita forest area is roughly estimated at 0.83 ha and the per capita wood-growing stock is 65 m³ The three main factors controlling forest growth and distribution are temperature, rainfall, and human activities. According to Mather (1990), potential wood production is estimated at 3-12 m³/ha/year.

In pre-history, forest was believed to cover more than half of the global land area and benefited human life a great deal through hunting and collecting food, and over 90 per cent of the demand for forest resources was for fuelwood. After industrialization in the seventeenth century, however, much wood was used for shipbuilding, house-building. and other industrial products.

In North America, by the nineteenth century about 60 million ha of forest had been opened up, of which 90 per cent was for agriculture, 9 per cent for fuelwood and construction, and the remaining 1 per cent for pasture. About half of this area (30 million ha), however, remained uncultivated as barren land. In 1891, the Forest Reservation Act was promulgated, and in 1905 President Roosevelt made a speech about forest conservation. Russia and the middle European countries also recognized the importance of forest conservation and started taking conservation measures.

In Africa, however, colonial Europeans drove out traditional forest for development and commercial logging. The Mediterranean countries, too, suffered from forest degradation. In China, a slow but gradual deforestation process started in 3000 B.C. and continued until the nineteenth century. Most of its forest area was lost, falling to only 9 per cent of the total land area in 1950. It recovered to 12 per cent of the total land area in 1980 through intensified afforestation efforts.

In Japan, until the end of the nineteenth century, fuelwood and other products had been sufficient for consumption needs. From the end of the seventeenth century man-made forests began to be created in an attempt to compensate for primary forest harvesting, which had reached its limit. The afforestation method undertaken in the Yoshino area (central Japan) was a forerunner of agro-forestry (the technology was known as the Taungya system in Myanmar and later Tumpangsari in Indonesia). Even in 1936, about 15 per cent of agricultural land in the mountain area of Japan, or 77,000 ha, was rotated as shifting cultivation or agro-forestry with integrated utilization of agriculture, fodder, logging, and fuelwood. With these very careful conservation practices, the forest area is still roughly 68 per cent of the total land area even today, which is exceptional.

Figure 14.2 reveals the change in forest areas between 1971 and 1986. In developed countries, the forest areas slightly increased, whereas in developing countries they continued to decrease, especially in the tropical regions. From 1981 to 1990, the average area of deforestation was 16.9 million ha per year (0.9 per cent of the total forest area). In contrast, the area of afforestation was 1.1 million ha per year, which represents only 6.5 per cent of the deforested area. In Asia, the afforestation rate was 12.5 per cent, while in Africa it was 2.5 per cent. It can be concluded that the afforestation efforts are far from adequate and should be increased over tenfold if the forest resources are to be sustainable.

Fig. 14.2 The change in forest areas, 1971-1986 (1971 = 100; figures in brackets denote volume in 100 million ha. Note: Forest areas include natural forest, artificial forest, and fallow areas for replanting; "tropical countries" = 76 developing countries in the tropical area. Source: FAO, Production Yearbook 1987, Rome)

3. Fuelwood and rural energy

Fuelwood and industrial wood

The consumption of wood can be divided into two major uses: industrial wood use (timber, pulp, panel, and paper) and fuelwood for energy use. According to Food and Agriculture Organization (FAO) statistics for 1985 (Masher, 1990), over 80 per cent of wood harvested in developed countries was for industrial use, whereas in developing countries about 80 per cent of wood harvested was for fuelwood. Furthermore, 76 per cent of industrial use occurred in developed countries, whereas 84 per cent of fuelwood was used in developing countries, as shown in table 14.2.

In developed countries, about US$58 billion were earned from timber exports from 2 billion ha of forest, whereas in developing countries only US$10 billion were earned from timber exports from 2.3 billion ha of forest. Since most of the fuelwood harvesting was taking place in tropical dry forest and open forest, which was causing serious environmental destruction, the FAO and World Bank started in 1978 to invest in community forest projects. The World Bank's historical lending records in the forestry sector reveal that before 1970 most of the lending was for industrial forestry. However, since its social forestry project started in the Philippines in 1977, 32 projects out of 64 over the next 15 years were for social forestry, 21 projects were for industrial forestry, and 11 projects were for environmental forestry. However, the performance of these projects has been mixed. Recently, more people-oriented projects, with special attention to their ownership and with more incentives for farmers, such as community forestry, farm forestry, and household trees, have become the new fashion.

Table 14.2 Wood usage, 1985

	Fuelwood		Industrial wood		Total
	Volume (m. m³)	%	Volume (m. m³)	%	Volume (m. m³)	%
Developed countries
Volume (m. m³)	263	16	1,160	76	1,422	45
Per cent	18		82		100
Developing countries
Volume (m. m³)	1,384	84	358	24	1,743	55
Per cent	79		21		100
Total
Volume (m. m³) 1,646	100	1,518	100	3,164	100
Per cent	52		48		100

Source: Mather (1990).

The demand for and supply of fuelwood in developing countries

The FAO has conducted a systematic survey of fuelwood harvesting in developing countries for the past 40 years and published the results in the World Forestry Inventory in 1953, 1958, and 1963. At the UN Conference on New and Renewable Sources of Energy in August 1985, the FAO predicted that the oil crises of 1974 and 1979 would lead to an energy crisis in the third world, and clarified the link between fuelwood harvesting and forest degradation by processing data on the supply and potential sources of fuelwood. This survey was very comprehensive and conducted by local consultants in various regions under the supervision of the FAO. It involved 2.1 billion people in 95 developing countries (of whom 1.7 billion were found to be suffering from shortage) and was carried out from February 1980 to July 1981 (table 14.3).

Fuelwood is the fourth-largest energy source, after only petroleum, coal, and gas. It supplied 5.4 per cent of world energy consumption in 1978 and is the largest renewable source of energy. Demand for fuelwood for cooking and heating varies according to cooking method, climate, lifestyle, and the efficiency of stoves, and ranges from a minimum of 0.5-1.0 m³/ha/year. to 3.0 m³/ha/year. in the mountain area. On the supply side, the productivity of fuelwood varies from 4.0 m³/ha/year. in closed forest to 2.0 m³/ha/year. in conifer forest, 1.0 m³/ha/year. in savanna forest, 0.5 m³/ha/year. in low savanna, 0.1 m³/ha/year. in shrubby forest, and 0.1 m³/ha/year. in fallow forest. About 1 ha is required for one person's energy per year. To estimate the global balance of fuelwood, 2.3 billion ha of forest in developing countries can supply fuelwood for only 2.3 billion people, but the population of the developing countries has already reached 4.1 billion. Population increase in developing countries will further aggravate the balance of fuelwood supply.

Efficient utilization of fuelwood and alternative energy

Improved cooking stove

Most of the cooking stoves used in developing countries are not heat-efficient and produce thick smoke, which is not good for health. If cooking stoves were improved to be heat-efficient and to produce less smoke, this would be good for rural people. But experience has proved that things are not that simple, because rural people claim that these improved cooking stoves do not warm the inside of the house and they miss the smoke's effect of killing insects. So it is important to develop a variety of improved cooking stoves that meet the varying priorities of rural women and are also economical and easy to use.

Table 14.3 Areas of fuelwood shortage in developing countries, 1981

Classificationa	Item	Africab	North Africa and Middle Eastc	Asiad	Latin Americae	Totalf
A	No. of areas of shortage	19	0	4	6	29
	Population, 1980 (m.)	55	0	31	26	112
	Study area	Mali (North)	-	Nepal (Mountain)	-	-
B	No. of areas of shortage	19	11	10	10	50
	Population, 1980 (m.)	146	104	832	201	1,283
	Study area	-	-	Nepal (Terse)	-	-
C	No. of areas of shortage	14	0	5	5	24
	Population, 1980 (m.)	112	0	161	50	323
	Study area	Mali (South)	-	-	-	-
Total	No. of areas of shortage	52	11	19	21	103
	Population, 1980 (m.)	313	104	1,024	277	1,718
	No. of areas surveyed	535	268	1,671	512	2,986

Source: Compiled by the International Development Centre of Japan from various FAO materials presented at the UN Conference on New and

Renewable Sources of Energy, August 1985.

a.

A - Extreme shortage: minimum requirements cannot be met even by over-harvesting.

B - Shortage: minimum requirements can be met. but over-harvesting may result in extreme shortage in near future.

C - Shortage in future: production of fuelwood met demand in 1980, but will be short in 2000.

b. In the past, most people lived in the savanna areas, but when the population exceeded 20 persons/km², both fuelwood and food (crops and livestock) became short, owing to the low productivity of the forest. However. fuelwood is sufficient where abundant rainfall prevails. Per capita fuelwood demand in Africa is larger than that in Asia owing to different cooking methods.

c. The oil-producing countries do not use fuelwood. However, fuelwood consumption increases as oil consumption increases.

d. Fuelwood provides one-third of total energy in Asia. and as much as three-quarters in the Mekong countries and Nepal Animal dung and agricultural residuals are also used for both energy and fertilizer, in equal proportions.

e. Sufficient energy supply is maintained by hydropower. petroleum. and replanted forestry in the Andean countries, whereas the energy supply is inadequate in Central America and the Caribbean countries.

f: About 1.7 billion people were suffering from a shortage of fuelwood in 1980. It is predicted that this number will increase to 3 billion by 2000, and the energy situation will worsen.

Charcoal

Charcoal may be considered as an alternative to fuelwood where the forest resource is abundant. Charcoal has the merit of long-life storage and low-cost transportation for its smaller volume and weight (one-third to one-fifth those of fuelwood). Powdered charcoal can also be used as an insecticide and soil conditioner. Furthermore, comparing heat efficiency, charcoal gives out 7,000 kcal/g compared with 3,000 kcal/g from dry fuelwood and 1,000 kcal/g from green fuelwood. In Zambia, a package project, comprising an oval briquette and a clay charcoal stove, is being successfully implemented. On the other hand, in Nepal it is customary for only lower-class people to produce, sell, and utilize charcoal. Finding a way to comply with the culture and customs of the users is a first step for the success of a project. However, charcoal may be used widely in urban areas and more advanced areas in future.

Development of alternative energies

Alternative energies such as solar energy, wind energy, hydropower, and biogas are still far from meeting the large demands of rural energy, because of the immaturity of the technology and its high cost. In developing countries, the practical use of hydropower and thermal power as alternatives to fuelwood for domestic energy is limited. However, the use of kerosene and liquefied petroleum gas (LPG) for lighting and fuel, respectively, is increasing in urban areas because of their low cost, cleanness, and ease of use.

Fuelwood thermal power generation

According to an estimate by the Central Laboratory of Electrical Power in Japan, a fuelwood thermal power station of 50,000 kW capacity requires 5 kcal/g of wood as fuel. To provide fuelwood for this station, willow and poplar are planted on an area of 18,000 ha and one-eighth of that area is harvested each year. The cost of power generation is about Y10/kWh, which is comparable to the cost of a coal-fired power station (Y10/kWh) or an oil-fired power station (Y11/kWh). In addition, fuelwood is a renewable energy source, in contrast to coal and oil, so this seems a good alternative. However, in developing countries, it is not economical to use fuelwood thermal power for heat energy, because of large losses in transmitting electricity to distant areas in addition to the inherent loss in converting from heat energy to electrical energy and back to heat energy.

4. Sustainable fuelwood management

Basic problems of fuelwood resources

The IDCJ Mission concluded that reliable information and data on fuelwood are even more scarce than for slash-and-burn cultivation (year 1 of its study) and for overgrazing (year 2). The Mission failed to identify a clear-cut project exclusively for fuelwood harvesting. It should be recognized, therefore, that the lack of knowledge and data is one of the biggest constraints in fuelwood management.

It should also be recognized that one of the causes of forest degradation by fuelwood harvesting is a conflict among the following three viewpoints:

1. the farmer considers fuelwood harvesting to be his traditional right inherited from his ancestors;

2. governments stress the importance of forest management as part of the social and economic development of the country;

3. the global viewpoint insists on the importance of forests for the conservation of the global environment in the future.

Although fuelwood harvesting is normally a complement to industrial wood harvesting, because 50 per cent or more of the tree typically remains as a residue after logging operations, in some cases it is in competition with farm land, pasturage, and logging. People are so poor that the price of fuelwood needs to be in effect free of charge. It is therefore difficult to introduce alternative energy sources, such as kerosene and LPG, because they involve a cost. The only advantage of fuelwood as an energy source is its renewable nature, so fuelwood needs to be economical and environmentally friendly. Demand for it will increase, especially in developing countries not particularly blessed with natural resources.

Feasibility study and long-term development strategy

Since fuelwood management is a small part of forest management, it is imperative to confirm the feasibility of total land use (agriculture, pasturage, and forestry) and its conservation. The annual global growth rate of forest is calculated at 2.4-10.0 m³/capita. This is enough to meet average fuelwood consumption and logging requirements of 2 m³/capita. which varies from place to place. Forest management can be enhanced by planting carefully selected tree varieties and in carefully selected locations. The record indicates that production of 47 m³/ha/year. may be possible in large-scale planting in the Sahel area, at a cost of US$1,000/ha. This is enough to meet the average demand for fuelwood, which should be reviewed by systematic monitoring and evaluation of existing social forestry programmes. This type of research is urgently needed in order to establish the feasibility of forest management in different climatic conditions and with different trees.

As mentioned above, the basic problems of fuelwood resources management are not yet solved. It is necessary to start a comprehensive research programme through international collaboration. For example, it is important to look at energy demand in relation to each energy source and at the status of fuelwood in the global macro economy; and also to determine the feasibility of large-scale and long-term programmes, such as a 50-100 per cent increase in production and a large-scale plantation programme. To develop these programmes, it is necessary to continue financial and institutional international cooperation for at least five years with a firm global political will based on the spirit of the UN Conference on Environment and Development (UNCED). In addition, technology innovation based on environmental science and public participation (research and training) is a core part of this proposal. As far as the Japanese government is concerned, it is necessary to cooperate with the FAO, the UN Development Programme, the Consultative Group on International Agricultural Research, and other international agricultural research institutions, by increasing contributions to and funding for the Global Environmental Facility of the World Bank, as an essential follow-up to the UNCED.

Short-term strategy

As an immediate strategy, the Mission recommended the following programmes: (i) introduction of alternative commercial energy sources; (ii) construction of infrastructure for the transportation of fuelwood; (iii) improvement of the production techniques and marketing of charcoal; and (iv) introduction and dissemination of improved cooking stoves.

A sustainable biological system

Based on the experience of the short-term strategy and an interim review of the long-term strategy, it may be possible to work out an optimum combination of programmes for each area by considering cost, environment, and convenience. In order to find alternatives to slash-and-burn cultivation, a number of combinations of biological resources (trees, crops, animals, fish, and human beings) under given natural resources (topography, soil, and water) should be integrated. Figure 14.3 shows such an example. It may well be necessary first to build a minimum social and physical infrastructure to support farmers' daily life, particularly when the area is classified as extremely poor. It is important to draw from a number of research projects and experiments on the selected farming systems and their ecological cycles already undertaken by many international agricultural research centres and, where necessary, to conduct new pilot research. The best alternative would be determined as one, or a combination, of the following categories:

· upland (identification of appropriate farming systems, including agro-forestry, to maintain the physical and chemical properties of soil);

· lowland rice (rotation with legume crops to minimize chemical fertilizer application); and

· forestry (selection of high-value tree species suitable to the given topographic and climatic conditions).

Fig. 14.3 A sustainable biological system

It may not be sufficient to develop technically sustainable agricultural programmes, unless they are accompanied by attractive incentives to farmers. Sustainability in agriculture is largely dependent upon soil management, which involves both short- and long-term improvements. Unless security of tenure is assured, farmers have no incentive to replenish a depleted soil, because it requires a significant investment of money and time (which in certain cases may involve a decade or so). It is essential to take the following socio-economic and institutional factors into account when formulating a sustainable agriculture and rural development programme, because the existence of mass poverty is the main cause of environmental destruction: (i) governments should give their highest priority to "rural transformation," whereby the poorest farmers, including young people and women, are enabled to remain in rural areas; (ii) land tenure should be secure to encourage farmers to supply the necessary inputs; (iii) the farmer's workload should not be unduly heavy; (iv) the natural and economic risks of the programme should be minimized; (v) a reasonable income should be assured, enabling farmers to invest in agricultural resource management without being affected by government pricing policy; and (vi) marketing and transportation systems should be stable and reasonably assured.

5. Beyond the UNCED

The United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro, Brazil, in June 1992, reached broad consensus between: development and the environment; the rich and the poor; and governments and non-governmental organizations (NGOs). The highlights of the Rio Declaration are: (i) all people have equal rights to enjoy a healthy and productive life as the main actors in sustainable development in harmony with nature; (ii) there should be national sovereignty to utilize natural resources in accordance with its environmental and development policy without destroying environments in other countries; (iii) all nations should cooperate to eradicate poverty as an essential target in attaining sustainable development; (iv) priority should be given to the needs of the poorest developing countries suffering from environmental destruction; and (v) developed countries should assume international responsibility for sustainable development and provide technical and financial assistance. The Declaration also touched on: consumption and population control; NGOs' active participation; international law for compensation to the victims of environmental destruction; women's role; ethnic tribes' rights; and demilitarization.

I believe that poverty alleviation (or narrowing the gap between the rich and the poor) is the first step to solving environmental problems, including the crisis of rural energy in developing countries. Based on the broad consensus reached at the UNCED, realistic targets of socio-economic development in harmony with ecology should be sought. As one such indicative target, I have ventured to formulate a long-term projection of poverty alleviation in a programme with controlled population and GNP/capita growth rates, which could narrow the gap between the rich and the poor. I am fully aware of the fact that GNP per capita is not the best indicator of quality of life. However, in the absence of an internationally recognized best indicator, I decided to use it as the second-best indicator of growth. To establish a first approximation, I referred to the World Development Report 1991 (World Bank, 1991a). Out of 124 countries, 25 countries (19 OECD members, 3 oil producers, Israel, Hong Kong, and Singapore), with GNP per capita of US$6,000 or more, were classified as rich and the remaining 99 countries as poor. Their populations and GNP per capita in 1990 are summarized in table 14.4.

The three most important assumptions as regards reducing the disparity between the rich and the poor relate to: (i) the time needed to reach the goal; (ii) average population growth rate; and (iii) the target ratio of GNP per capita between the rich and the poor. First, I assumed that the target year should be 2040, which is long enough for development purposes and short enough from an environmental point of view. The population assumption is rather difficult. Records show that world population growth decreased from 2.1 per cent in 1965-1973 to 1.8 per cent in 1980-1990 and it is estimated at 1.6 per cent for the period 1990-2000. In view of these statistics, it would not be unreasonable to target 1.0 per cent as a 1990-2040 average, because in the 25 years 1970-1995 the rate fell by 0.5 per cent (from 2.1 to 1.6). Another encouraging example is Sri Lanka, where population growth, which averaged 2.8 per cent in the 1960s (very close to the magnitude in Africa today), fell during 1980-1990 to 1.5 per cent, and is expected to fall further to a little over 1 per cent in the 1990s.

Table 14.4 Population and GNP per capita in rich and poor countries, 1990

	Year	25 rich countries	99 poor countries	Total
Population (million)	1990	900	4,100	5,000
Population growth (%/year)	1965 -1973	1.0	2.5	2.1
	1980-1990	0.7	2.1	1.8
	1990-2000	0.6	1.9	1.6
GNP per capita (US$) (weight)	1990	18,700 (23)	800 (1)	3,800
Total GNP (US$ billion)	1990	15,700	3,300	19,000

Source: World Bank (1991a).

As for the third assumption, it would be ideal to eliminate entirely the disparity between the rich and the poor by 2040. But it may not be realistic for the poor (US$800) to reach the rich's level (US$18,700) in 50 years, which would require an average annual growth rate close to 7 per cent, provided that the rich's growth rate remains zero for 50 years. After some trials, I reached the conclusion that the disparity in GNP per capita could be targeted to narrow from the present 23:1 to 10:1 in 2040. In this case, the annual average growth rate of GNP/capita would be 3.5 per cent for developing countries and 1.8 per cent for developed countries, which results in GNP/capita in 2040 being US$45,000 for developed countries and US$4,500 for developing countries. If the population growth rate (1.1 per cent for developing countries and 0.6 per cent for developed countries) is added, the necessary GNP growth rate per year would be 4.6 per cent for developing countries and 2.4 per cent for developed countries. The average global GNP growth rate would be 3.0 per cent, which is exactly the same figure as required to achieve sustainable development given in the Bruntland Report. The results of the calculation are summarized in table 14.5. This seems to be an appropriate aim and could be achieved, though it would not be at all easy.

In reality, the trends in economic and population growth will be quite diverse among developing countries. For example, some developing countries may develop quite rapidly and could be in the range of "developed" countries in 2040, and some may not. Thus, the results of this simple calculation are neither to represent the huge, complex, and dynamic process of development, which is beyond the scope of my study, nor to argue that the optimum level of disparity between the rich and the poor is 10: 1. Rather, the heart of the issue here is to delineate rough relationships between population and GNP per capita, if the primary goal is to narrow the disparity. It is my conclusion that neither the planned economy nor the market economy is capable of overcoming this complex problem in relation to population, growth, and poverty, which human society is already facing. We may well need a new philosophy of a "strategically planned market economy" in the twenty-first century.

Table 14.5 Proposed population and GNP per capita, 1990 and 2040

		Year		Annual	Proposed annual
		1990	2040	growth (%)	GNP growth (%)
Population (million)
	Total	5,000	8,200a	1.0
	Developed	900	1,100	0.6
	Developing	4,100	7,100	1.1
GNP/capita (US$)
	Total	3,800	10,000	2.0	3.0
	Developed	18,700 (23)	45,000 (10)	1.8	2.4
	Developing	800 (1)	4,500 (1)	3.5	4.6
	World total GNP(US$ trillion)	19.0	82.0	3.0

a. This target may still be ambitious, when compared with the prediction by the UN Fund for Population Activities of 6.4 billion (2001). 8.5 billion (2025), and 10.0 billion (2050).

References

FAO (Food and Agriculture Organization). 1953,1958,1963. World Forestry Inventory. Rome: FAO.

Mather, A. S. 1990. Global Forest Resources. Portland, Oreg.: Timber. Translated by Minoru Kumazaki.

Montalembert, M. R. de and J. Cleent. 1983. Fuelwood Supplies in the Developing Countries. Rome: FAO Forestry Paper 42.

WCED (World Commission on Environment and Development). 1987. Our Common Future. Oxford: Oxford University Press.

World Bank. 1991a. World Development Report 1991. Oxford: Oxford University Press.

World Bank. 1991b. Forestry Sector Policy Paper. Washington, D.C.

15. The developing world: the new energy consumer

Anthony A. Churchill

1. Introduction

This paper is an attempt to look ahead at the energy production and consumption patterns of the developing world and the implications for both the countries themselves and the rest of the world.¹ A period of three decades has been selected because anything less would not adequately reveal the underlying trends. The patterns of energy production and consumption are well established and represent a vast amount of capital; change will occur only with changes in basic parameters such as population, economic growth, and technology. The basic database used is that of the report by the Commission of the World Energy Council (WEC), Energy for Tomorrow's World (WEC Commission, 1993). This is the most recent summary of the global scene and its scenarios cover a sufficiently long period of time. The data and assumptions of the scenarios presented are all in line with other similar exercises by the International Energy Agency or the Intergovernmental Panel on Climate Change. I refer to this as the "consensus view."

Table 15.1 Energy demand to 2020: Four scenarios (billion tons of coal equivalent)

	1990	2020
	A	B1	B	C
OECD	4.1	4.9	4.7	4.7	3.6
Central and Eastern Europe/CIS	1.7	2.0	2.4	1.8	1.5
Developing countries	2.9	10.3	8.0	6.8	6.1
World	8.8	17.2	16.0	13.4	11.3

Source: WEC Commission (1993).

2. Energy demand

Consensus views are not necessarily correct; for example, the consensus view on oil prices in the late 1970s looks slightly ridiculous from today's perspective. Table 15.1 summarizes the demand alternatives of the Commission report. Under the high-demand scenario (case A), the consumption of the developing world about doubles in the 30-year period. The alternatives presented differ in the assumptions about economic growth and the rate at which the energy intensity of output changes. The lowest-demand scenario (case C) is what would have to happen if greenhouse gas emissions were to be stabilized at 1990 levels. It is presented as an illustration of how difficult it would be to accomplish this objective. There are no realistic policies that would make this possible.

All of these scenarios imply a substantial shift in the way energy is used in the developing world. They imply a significant break between what is currently happening and what would have to happen if the demand of the developing world were to double only over 30 years as opposed to doubling every decade as at the present time.

Why should dramatic changes of these orders of magnitude take place? What are the sets of policy changes that would have to be put in place to make this work?

For the most part, these scenarios assume that increasing efficiency brought on by more market-oriented pricing and other policies will permit the continued growth of output with declining inputs of energy. But these are assumptions, not facts - even if the appropriate policy changes were to take place, we have no way of accurately estimating their impact on energy demand. In fact, as I argue below, it is equally plausible to assume that a better set of policies like those generally assumed in these scenarios will increase, not decrease, demand.

Even the high economic growth scenarios are pessimistic. If, on average, the developing world grows only at the rates assumed, the bulk of humanity will continue to live in wretched poverty 30 years from now. These assumptions do not fit the present aspirations of most of the developing world, and two countries alone, India and China, which account for a third of the world's population, are currently growing at rates that are multiples of those assumed. A doubling of the assumed growth rates would nearly double energy demand.

There are alternative ways of looking at the same facts and figures. Rather than focus on global aggregates, let us start with how the individual responds to changes in prices and incomes. If, through changes in policy, technology, or other measures, the production of a service becomes more efficient, it is equivalent to lowering the price of the service. If there is an improvement in the efficiency of the automobile engine so that it is now possible to drive more kilometres for a given fuel input, the price of vehicle kilometres has fallen. Similarly an improvement in the efficiency of the light bulb lowers the cost of the service. The consumer is purchasing the service, not the fuel, and in both cases will experience a decline in price of the service. What is his reaction? Does he purchase more or less? In other words, the amount consumed will vary with the price.

Most of those advocating increased efficiency and conservation as a way of decreasing the quantities consumed implicitly assume that energy services are price inelastic or that consumption does not change with a change in price. A perfectly inelastic demand curve is not supported by the evidence. Estimating price elasticities for energy and other services is notoriously difficult but most of the evidence points to some positive price elasticity - that declines in price will produce increases in the quantity consumed. Whether the increased quantity of the service consumed results in more or less fuel usage depends on the relationship between fuel costs and total service costs. In the United States, for example, improvements in the fuel efficiency of vehicles has not produced an aggregate decline in fuel consumption because of an increase in vehicle kilometres. In Japan, in particular, improvements in efficiency have been associated with rising consumption.

Another way of examining the same phenomena is in terms of expansion of markets. The efficiency of electric power production has continued to increase, for example, from less than 4 per cent heat efficiency at the turn of the century to over 50 per cent in today's combined-cycle plants. Real prices have fallen by a factor of at least five. In response to these changes in price, whole new markets have developed for electric power. In many cases it led to the substitution of a convenient and cheap form of energy for the sweat of the human brow.

In the developing world the potential for the expansion of energy services is enormous. The present inefficiencies of energy production and consumption result in high prices for the services, in effect rationing large segments of the population out of the market-place. Take, for example, electric power production. In almost all countries the price of electricity produced by the public sector is subsidized. But the subsidies introduce inefficiencies and in particular they lead to rationing because the subsidies are insufficient to produce the power that would be demanded at these prices. This forces those not lucky enough to be part of the system to seek more expensive alternatives. People using kerosene lamps or handpumps are paying multiples per unit of service compared with those connected to the grid. Even those connected to the grid are forced to take expensive measures to compensate for the poor quality of the service. In Indonesia or Nigeria, where nearly half the electric power production is in inefficient auto generation that is required to compensate for the poor quality of the public supply, the real cost of electricity is two to three times the price that would prevail under an efficient system of public supply. Imagine how much more electric power would be consumed in India if it were efficiently produced and distributed.

Probably even more important than the impact of efficiency on prices is the impact of increased incomes. The present per capita consumption levels of the developing world are between one-tenth and one-twentieth of those of today's industrial countries. In the developed world (although not yet in Japan), we have seen the per capita consumption levels stabilize or even begin to decline. Most of the assumptions behind the low levels of demand growth in the developing world assume a similar pattern, at least at the aggregate level, of a turn-down in the rate of increase in energy use relative to increases in income.

But is this a realistic assumption? Is it correct to take the changes in the developed world and apply them to the developing countries? In other words, what is the income elasticity of energy consumption? The evidence at hand is mixed and it is not an easy parameter to calculate with any certainty. At the aggregate level, most of the empirical studies come out at between 1.5 and 3.0. None shows this to be a declining figure. At a minimum, a per capita income increase of I per cent will generate a growth in energy consumption of 1.5 per cent. If one looks at both the planned and present construction of energy facilities in most of the developing world in the 1990s, the figures suggest that countries are working on the assumption that energy demand will grow at twice the rate of income. This is consistent with historical experience.

It is also useful to look at income elasticities from an individual or household perspective. At present, average per capita energy consumption is low in developing countries. The average Chinese, for example, uses less than 400 kilowatt hours (kWh) per capita - compared with the US average of nearly 10,000, or the Japanese of 5,000. In these higher-income countries, growth in GNP is increasingly concentrated in services and less energy-intensive activities. The developing world, in contrast, has yet to go through the stage of income growth in which demand for energy-intensive services is a large part of total consumption. Household demand for basic lighting, transportation, appliances, refrigeration, etc., is at relatively low levels. As income grows, demand for these energy-intensive services is likely to be quite income elastic.

One area of increasing demand that probably has been underestimated is transportation. The developing world is undergoing an unprecedented process of urbanization. In the next 30 years most developing countries will have shifted from being primarily rural to being primarily urban. This urbanization is part of the process of economic growth in which higher productivity in agriculture permits a greater degree of specialization in the production and trade in non-agricultural goods and services. Inevitably this will mean greater demand for the transport of goods, all of which are energy intensive. Add to this demand for personal mobility and you have a potentially explosive growth in the demand for energy related to transport needs.

The rapidly growing countries of East Asia are well into this process where the combination of rapid economic growth and rising incomes is producing double-digit rates of growth for transport services. All of today's developed countries have gone through this stage and there is no reason to expect a different experience in the developing world. Improvements in efficiency of transport will permit this increase in demand to take place at lower income levels.

Assuming modest income and price elasticities and a conservative rate of growth, it is possible to get increases in demand that are multiples of what is generally being projected, even with, or perhaps because of, substantial improvements in energy efficiency (Churchill, 1993: 6).

What are the quantitative implications? If energy services are income elastic and using the most conservative of these income elasticities (1.5), a growth rate in per capita income of 2 per cent would produce a growth in energy demand of 3 per cent. To this must be added the growth in population (assume an average of 1.6 per cent over this period), and we now have energy demand growing at 4.8 per cent. How do we take into account the price effects from improved efficiencies or technological progress? Casual observation on the part of many observers suggests that the developing countries are at least 25 per cent less efficient than the developed countries. Let us assume that by the end of 30 years they reach at least the present level of efficiency of the present developed world; that is, real prices will decline by at least 25 per cent. Again, let us make a conservative assumption that consumption will increase more or less in proportion to the decline in prices; that is, demand will be 25 per cent higher than it would have been in the absence of a price decline. We now have the growth of energy demand up to 6 per cent. This is more than five times greater than the growth rates of energy demand implicit in the WEC high scenario and in most other similar "high-case" scenarios, and it is based on using the low end of the estimates of per capita income elasticities.

Different assumptions about growth rates, income and price elasticities, technological progress, and policies can change these results. But it is difficult to see what plausible assumptions about any of these parameters could alter the basic outcome by a factor of five. One could assume declining income elasticities over time, but, given the low initial levels of energy consumption, it is difficult to see why much in the way of declines in this figure can be expected in this period. Present per capita income levels in the major developing countries are one-tenth to one-twentieth of those of the OECD average.

Policy changes can be important. Governments, for example, could choose to try and capture all of the efficiency gains through prices and to soak up the resulting consumer surpluses through the tax system. The practicality of doing so is open to question.

Is this rapid rate of growth in demand likely to be constrained by either supply or financing constraints? It is possible that specific countries will undertake policy and other measures that will restrain the growth in demand by slowing down the rate of economic growth.

But this is hardly a desirable objective. Given appropriate policies, there is no reason to assume that these increases in demand cannot be met within the existing constraints on physical supplies and financial resources.

3. Energy supply

Over the next 30 years there is no reason to assume shortages of the basic raw materials for energy production. The WEC scenarios and most others are consistent in this viewpoint. Particularly with improvements in efficiency and changes in technology, it is likely we face a world of relatively constant energy prices. This is consistent with the historical experience.

The two major economies in the developing world in terms of size are India and China. In both cases these are, and will remain coal-based economies. Both have large reserves of coal that go well beyond the needs of the next 30 years. There is also no reason to suppose this coal will be produced under conditions of rising costs; as has happened in the past, the combination of improved efficiency and more efficient technologies will permit the production of final energy services at prices that are not too different from today's price. It is interesting to note that the world prices of basic fuels into the energy transformation process have been relatively constant in real terms over the past 100 years.

Some concerns have been expressed about the availability of petroleum. Again, most of the supply projections indicate an adequate supply of petroleum at least for the next 30 years. Reserve estimates tend to be on the conservative side because they generally are based on today's technology, and at present costs of capital it makes little sense to spend resources to "prove" reserves for any extended period.

The issue may be more one of distribution. Undoubtedly the present distribution of these resources creates some concerns, but over the longer term it may not make all that much difference. In the production of electric power or other energy services resulting from the boiler use of petroleum, there are a multitude of substitutes, from nuclear to natural gas. It is only in the transportation area that petroleum products have a strong comparative advantage. But even here substitutes are developing. The cost of producing liquid fuels from natural gas has dropped by almost half in the past 20 years to the point where it is close to that of petroleum-based alternatives.

Substantial resources are being spent on the development of the electrically powered vehicle. Given present trends it is highly likely that a commercially feasible vehicle is within the horizon of the next 30 years. Once this is feasible, there are numerous substitutes for petroleum as a transport fuel.

4. Financial constraints

What about financial constraints? All energy transformation processes are capital intensive, and concerns have been raised about the availability of capital to finance the expansion of energy supplies, particularly in the developing world. The savings required to finance the supplies necessary to meet the type of demands forecast above all lie within historical parameters. Typically, in the energy-intensive stages of economic development, energy investments are about 20 per cent of total investment or between 3 and 5 per cent of GDP. These ratios are not expected to change and the type of demand growth forecast above is consistent with the historical pattern. In other words, economic growth and appropriate policies will generate the necessary resources.

The basic resource - the savings - will be available as part of the growth process. The challenge is in mobilizing those resources. Many countries have structured their energy enterprises so that they are both inefficient and subsidized. In these circumstances, only the government through its taxing powers is able to invest. Individuals will not knowingly invest their hard-earned savings in loss-making businesses. There also are limits on how much foreign savings can be attracted into the sector. At present most of these foreign savings are simply relying on the credit standing of the public sector. In any case it is not possible to finance a sector as large as the energy sector on the basis of foreign savings without running into overall balance-of-payment constraints. In order to mobilize the necessary domestic resources, a fundamental restructuring of many of the institutions in the energy sector is required. This is a process that is now under way in many developing countries.

5. Environmental issues

Most energy transformation processes produce wastes that, if improperly handled, can cause serious environmental consequences. Dealing with these wastes has become an increasingly important issue for all countries. Fortunately the technology exists for mitigating most of the serious problems. In most cases the costs of better environmental practices are a small part of total costs and are within the resources constraints of most developing countries.

In the case of the most serious environmental problem with respect to human health and welfare, that of particulates in the air, the costs are relatively minor and are easy to justify in terms of local costs and benefits. Others create more serious issues for cost-benefit analysis. Cross-boundary pollution from acid rain is one such problem. Emissions from Chinese coal plants, for example, impact on acid rain in Japan and other parts of South-East Asia. It is not clear that it is of benefit for China to spend the resources to eliminate this problem for its neighbours. On the other hand, it should be in the interest of these neighbours to provide some of the resources necessary to eliminate this problem. Given the rate of growth of new plant (some 1,000 MW per month) this will not be a trivial expense - approximately US$2 billion per year. This is not unaffordable, however, by the neighbouring countries.

In most cases the waste problems can be met through the direct application of appropriate technologies to eliminate the wastes rather than trying to achieve the same ends through improvements in efficiency. Figure 15.1 shows the trade-offs between reducing emissions through end-use and other efficiency efforts and removing them directly at source. In all cases, once one moves beyond the obvious measures to stop subsidizing inefficiency, it is cheaper to use existing technologies to remove the pollutants at source. Nuclear power, for example, is a cheaper alternative (assuming it can be operated safely) for removing CO₂ than draconian policies to improve energy efficiency.

Fig. 15.1 The marginal costs of pollution abatement in electric power through energy efficiency and low-polluting technologies, with reference to developing countries

The one potential problem for which there is no immediate solution is that of greenhouse gas emissions. Over the coming decades almost all of the additional greenhouse gas emissions will be coming from the developing countries. India and China alone will account for about two-thirds of the increase. There is little alternative for these economies but to burn coal and neither one is likely to sacrifice economic growth in response to global concerns about the atmosphere. It is also unlikely that the rest of the world will be willing to contribute sufficient resources to these countries to offset the extra expenses that moving out of coal would entail. Shifting India and China from coal to nuclear power, assuming it were technically possible, would cost around US$15 billion per year over the next two decades.

Improved efficiency and conservation measures will have a limited impact. The 1992 World Development Report (World Bank, 1992) estimated that, under the best of assumptions regarding efficiency, savings of 20 per cent over the next 20 years were a possibility. These best of assumptions may not take place and, as has been suggested above, the cost reductions that are brought about by these efficiency measures may, in fact, increase demand.

If global warming proves to be a serious problem - there is still sufficient uncertainty about it to warrant some caution in spending too much in the way of resources to deal with it - then reliance will have to be placed on technologies as yet unavailable.

Is this an unreasonable expectation? Should we try to solve tomorrow's problems with today's technology? What are the potential alternatives that may become available in the next 30 years? To assume that technology will not change is an unreasonably conservative assumption that is contrary to the historical evidence. Technological change is continuing at a rapid pace. One has only to consider the world of 30 years ago to speculate on the potential magnitude of the changes ahead of us. In the production and consumption of energy there has been a steady improvement in overall efficiencies.

If we look ahead for the next 30 years, it would not be unreasonable to assume a continued or similar pace of development. A number of new technologies are close to commercial feasibility. Solar energy, whether in the form of photovoltaics or thermal, is a renewable technology that offers considerable potential. If costs continue to decline at even half the pace of the past 20 years, solar energy could well become competitive with fossil fuels in the next 20 years (see fig. 15.2). Using electric power to produce hydrogen or the direct production of electric power from fuel cells are all technologies that could prove commercially feasible in the near future. Continued improvements in existing fossil fuel technologies, particularly in using natural gas, are also well within the realm of possibility. Nuclear power is also a possible contender if costs and safety concerns can be met.

Fig 15.2 The cost of alternative means of generating electric power in high-insolation areas, 1970-2020 (Data after 1990 are predicted; future costs of fossil fuel and nuclear generation are uncertain, being affected by such factors as demand shifts, technological change, environmental concerns, and political conditions, which may act in opposite directions. Notes: a. Excluding storage costs. b. Including storage costs -on the basis of hybrid natural gas/solar schemes through 1990 and heat storage thereafter. c. Natural gas and coal)

Will these technologies be available to the developing countries? Inevitably they will be followers: only rich societies can afford to be at the margins of technological progress. Latecomers have the opportunity to capture the gains without bearing many of the risks and costs. In most developing countries the greatest benefits will come from using already tried and true technologies.

The key to the transfer of technology lies in the ability or absorbtive capacity of the recipient. Study after study shows that the greatest gains in productivity come not from the technologies, per se, but rather from the organizational and institutional changes that are required to utilize the technologies efficiently.² If labour and management practices are unchanged, little may be gained from introducing new technologies. Unfortunately, the monopolistic structure of most energy enterprises, with their poor incentive systems, does not always permit the most benefits to flow from the introduction of new technologies. More competitive markets in which investors have a clear financial stake in the successful adoption of available technologies appear to be the direction in which countries will have to move if they are to take advantage of the substantial and growing volume of new technologies.

6. Conclusions

Within the next three decades the developing countries are set to become the world's major energy consumers. This growth is to be welcomed because it will be the result of economic growth, with its promise of a better life for some of the world's poorest populations. This growth will not be automatic; substantial institutional changes are required in the energy sector, particularly to improve efficiency and mobilize capital. Nor will it always be as environmentally benign as one would wish. The most serious problems with respect to human health and welfare are essentially local in nature and can be dealt with within the constraints of existing technology. Should global warming prove to be a serious problem, it will have to be dealt with using tomorrow's technology.

Notes

1. Much of the analysis developed for this paper is given in further detail in Churchill (1993).
2. There are many examples of this in World Bank (1989).

References

Churchill, A. A. 1993. Energy Demand and Supply in the Developing World 1990-2020: Three Decades of Explosive Growth. Annual Bank Conference of Development Economics. Washington, D.C.: World Bank, May.

WEC (World Energy Council) Commission. 1993. Energy for Tomorrow's World The Realities, the Real Options, and the Agenda for Achievement. London: Kogan Page.

World Bank. 1989. Technological Advance and Organizational Innovation in the Engineering Industry. Washington, D.C.: World Bank, Industry and Energy Department, Working Paper No. 4, Industry Series, March.

World Bank. 1992. World Development Report 1992. Oxford: Oxford University Press.

16. The role of rural energy

Jike Yang

1. The energy consumption of peasant households in China

The damage caused by biomass burning

Each year, about 500 million tons of biomass fuel are burned by rural households. This figure is one-third of China's total energy consumption. In the plains region, where there is a large population and limited arable land, biomass is used as a substitute for fuelwood. In the townships of mountain regions, distances to fuelwood harvesting sites are much greater than before. In the dry area of north-west China, the fuelwood shortage is becoming a serious problem. If we calculate rural household energy consumption in terms of standard agricultural output values, energy consumption per 10,000 yuan output is 9 tons of coal equivalent (tce). This figure is far higher than the energy consumption level of China's consumer goods industry and close to the average level of heavy industry. It is therefore important in the Chinese rural economy to cut this figure to 4.5 tce. This target could be achieved by widespread use of the straw-saving stove, the biogas stove, and the solar stove (known as the "three stoves").

The coefficient of heat conversion of rural biomass burning is as low as 10-15 per cent. Taking a typical rural family relying mainly on straw burning as an example, the average effective thermal quantity needed every day for five people is about 3,100 kilocalories (kcal); in mountain areas where rural families rely on fuelwood, this figure is about 4,200 kcal. Compared with the straw- or fuelwood-saving stove, with a coefficient of heat conversion as high as 30-40 per cent, at least 50 per cent of biomass is wasted. Given that there are 192 million rural families in China, the total annual loss is about 280 million tons of biomass, which is equivalent to 77 million tce.

Another big loss from biomass burning is that the organic nitrogen content in biomass is released into the air as oxides of nitrogen and cannot return to the soil as fertilizer. Compared with the biogas digester, in which the organic nitrogen content in biomass can be saved and returned to the soil, the annual loss of organic nitrogen from biomass burning in China is equivalent to 5 million tons of ammonium sulphate or 6 million tons of ammonium carbonate. In energy-deficient rural areas, large-scale biomass collection and burning is causing serious damage in terms of the ecological balance and further shortages of biomass resources. A vicious cycle is thus formed leading to serious problems such as soil degradation in plains areas, deforestation in mountain areas, and devegetation in the grasslands.

Corrective action

As described later in this paper, at every level of official and nonofficial organizations, remarkable efforts have been made in order to reduce rural energy expense and to tap new energy sources. In many regions, the serious problems of household energy are being solved or ameliorated. A beneficial ecological cycle is gradually being formed.

Straw- and fuelwood-saving stove

In order to prevent huge energy losses from small stoves, the Department of Agriculture has introduced the straw- and fuelwood-saving stove in several hundred counties. It is becoming very popular and is spreading quickly among peasants. A statistical survey was conducted in Fuyang County, Anhui Province, with a random sample of 107 rural families. The results show that the household straw-saving stoves have greatly increased the coefficient of heat conversion, a quarter of them up to 20-30 per cent, half of them up to 30-40 per cent, and the other quarter up to 40-50 per cent. This shows that peasants have indeed mastered this innovation. If applied to the whole country, by 2000 huge amounts of biomass equivalent to 7.5 million lee would be saved. By solving the household energy problem, eco-agriculture could be developed in China. A 100,000 km "green great wall" has been planted in 20 counties in the plains of northern Anhui Province, and crop yields have increased every year.

The biogas digester

Biogas is not only used for cooking, heating, and lighting in rural households, but also has ecological benefits. Through anaerobic fermentation, elements of hydrogen and carbon are separated from nitrogen, phosphorus, potassium, boron, molybdenum, zinc, and iron, which are used as both fuels and fertilizer. The methane gas produced in rice fields as a pollutant can be converted into a useful fuel in a biogas digester. Therefore biogas technology utilizes biomass energy and also provides one of the best environmental protection measures.

Fuelwood forestry

There are many fast-growing tree shrub species that could be selected for fuelwood forestry. In this selection process local conditions must be considered and breeding experiments conducted. For instance, a shrubby legume called purple-spike locust is a good choice because its branches can be used for fuel or for making baskets and lining mine tunnels, the leaves and twigs can be used for feed, and the green plough-under becomes a good organic nitrogen fertilizer owing to its nitrogen-fixing capability. It is a perennial plant and it is hardy. In addition to optimized species selection, a combined configuration of trees, shrubs, and grasses should be adopted for maximum utilization of solar energy through photosynthesis.

Eco-agriculture

The eco-agriculture idea could be realized in the plains areas by keeping one-third of the land for crops while using another third for forestry, and another third for forage grasses for livestock raising, and by rotating usage of the land. In the alluvial plain of the Yellow River and Hui River, this idea is gradually being realized. Rural families are making a lot of money by selling timber and fuelwood products from plains forestry. Combined with the straw-saving stove, the rural fuel shortage has been solved. Further consideration should be given to the comprehensive utilization of the remaining biomass, as both fuel and raw materials for the chemical industry. The economic benefits of plains forestry are invaluable.

Solar energy

The annual average solar radiation on earth is 120 kcal/cm². Over two-thirds of China it is more than 140 kcal/cm². and in Qinghai, Gansu, Xinjiang, and Tibet it is more than 200 kcal/cm². This renewable energy could be put to daily use by technologies such as the solar stove, which collects heat by focusing sunlight, and the water heater using the black-body conversion technique. In rural areas, solar energy can be utilized not only for cooking and heating, but also for growing rice seedlings, incubating, greenhouse planting, and drying processes. Solar energy stoves are becoming a valuable compensating energy source in energy-shortage areas, especially in north-west China which has higher than average solar radiation intensity. In China, there are 66 counties, cities, and districts and more than 30 research and development institutes and manufacturers engaged in developing, utilizing, and introducing solar energy. A new solar energy industry is beginning to appear.

Overall achievements by 1992

The Department of Energy and Environment of the Ministry of Agriculture has provided me with some figures on the rural energy situation. By the end of 1992, about 150 million rural families in China had replaced their old stoves with straw- or fuelwood-saving stoves and 5 million rural families had installed biogas digester pits. The capacity of small hydropower stations was over 14.42 gigawatts (GW) and annual power generation was 44 terawatt hours (TWh). Fuelwood forests covering 4.5 million hectares had been planted. Around 140,000 rural families had installed solar stoves, and solar water-heating devices with a total effective area of 1.55 million m² had been installed. Energy-efficiency technologies for use in kiln combustion and in tea and tobacco drying had been developed. Altogether, in China's rural areas, the energy saved and new energy developed is equivalent to 8 million tce, making this a leading project in terms of the investment to energy output ratio. More than 1,000 technical personnel in over 100 research institutes have been working on rural energy development. By 1992, over 2,700 enterprises, 1,400 township-level petrol stations, and over 16,000 construction teams in the rural energy industry had been established.

2. The energy consumption of township enterprises in China

The boom in township enterprises is a significant step in the reform of China's rural economic system. Along with the rapid development of rural enterprises, more peasants are leaving their land to go to nearby towns to work in these enterprises and other trades or professions. This will create more energy demand. The development of township enterprises will reduce the labour available for farming and accelerate the growth of intensive farming practices. On the other hand, owing to the imbalance between the supply of and demand for commercial energy sources, rural energy development is urgently needed. Another important factor is that a prosperous township economy provides more financial support to the development of rural energy resources. Rural energy development is fundamental to township enterprises and, in turn, it relies on the vigour and prosperity brought by newly emerged township enterprises.

The rapid growth in township enterprises is creating many social, economic, and environmental problems, of which the problems of energy and environment are the most serious. The energy shortage in rural households has been partly solved. One reason is that more straw is available with increasing rates of growth in agriculture. Other reasons are the widespread use of straw-saving stoves, biogas digesters, and solar stoves and the cultivation of fuelwood forestry. The energy shortage in township industries, however, is becoming increasingly serious, and there are growing demands for commercial energy sources such as coal, petroleum products, and electricity. The implications raise several issues.

The value of low energy consumption in agriculture

Agriculture in the United States is totally mechanized, 90 per cent of it being petroleum powered. For each kcal of farm product, 15 kcal of energy is invested. Hence during periods of oil price crisis, American farmers could not make ends meet even if the output of their farm products was increased, and subsidies from the government were required to support their farming activities. In developed countries where agricultural mechanization is adopted as a measure to promote productivity, this might be a common situation. A serious problem of energy efficiency is also induced by such practices. Many international economists take a critical view of oil-powered agriculture and have suggested that China's agriculture should emphasize land productivity rather than labour productivity through petroleum-powered agriculture.

The dependence of agricultural production on commercial energy in China is far less than in developed countries. Although agricultural machinery power has reached well over 300 GW in China, it accounts for less than 40 per cent of the total power used in agriculture. The rest is still provided by manual and animal labour. It is likely that rural household energy will continue to rely on all sorts of biomass energy and other renewable energy sources. Commercial energy consumption per 10,000 yuan of agricultural output is only 1.0 lee for agriculture, which is much less than the figure of 5.5 lee per 10,000 yuan for heavy industry, and also less than the 1.2 lee per 10,000 yuan for light industry. The low consumption of commercial energy by agriculture is an advantageous feature that could also be introduced into the processing and transportation of farm products. Biogas-fuelled small power stations and farm trucks are typical examples. The benefits in terms of society and the environment are significant.

The high energy intensity of township enterprises' consumption

A team investigating township enterprises' energy consumption sampled 22 counties in different parts of China. The statistical data show that energy consumption per 10,000 yuan output ranges from 1.1 lee in Ningbo County, Zhejiang, to 16.7 lee in Xingyang, Henan. The median is 7.9 lee in Rongcheng, Shandong. This median figure is 2.6 times higher than the figure for China's light industry. A major factor in township enterprises' high energy consumption is the building materials industry. In Xingyang County, the coal consumption by the building materials industry is as high as 60 lee per 10,000 yuan output, accounting for 23 per cent of the county's total coal consumption, whereas in Ningbo County the figure is 5.5 tce, accounting for only 7 per cent of the county's total coal consumption. Thus, in addition to energy saving by technology and management, attention also needs to be paid to structural energy saving for township enterprises.

The energy-saving potential of household handicraft industries

The characteristics of household handicraft industries are:

1. They are labour intensive and could combine into enterprises with a substantial scale of production.

2. They could be divided into many specialities and distributed among households, thus reducing energy consumption and increasing the economic benefits.

3. They comprise many production levels and could cooperate voluntarily to produce a series of products.

4. The techniques are simple and easy to learn. This makes it easier to switch types and kinds of product whenever demand in the market changes and therefore to increase competitiveness.

The concept of "one town, one product" has recently been spreading. This involves handicraft products from thousands of rural households, all powered manually. For instance, in the region of Dabie Mountain where bamboo trees are abundant, a handicraft processing industry is emerging. Bamboo shoot fibre is shredded by rural households. This material, with high tensile strength and good elasticity, can be used as a good-quality filling in the furniture industry, so it is in great demand in domestic markets. These energy-saving household rural handicraft industries not only support various light industries, but also dramatically increase the incomes of poor rural families through hard work and utilization of local resources without damaging the environment.

Employing surplus rural labour

By 2000, China will have a surplus of 70 million entering the labour market. In addition, 110 million peasants will transfer from farming to other trades. This labour corps is certainly too huge to be absorbed by China's cities. One solution would be to coordinate their labour, capital, and farm products with other productive elements such as investment capital, government subsidies, and new technologies. In this way, it might be possible to give them a good chance to be employed in various kinds of nearby township service or light industries rather than looking for jobs in cities far away from their homeland.

China's rural population increase will also increase the demand for energy, and the rise in peasants' standard of living will further increase this demand. It is obvious that problems of energy, population, employment, and environment are closely interconnected. Given the potential for expansion of township industries and the pressure to absorb more surplus labour from the surrounding rural regions, we must try our best to control the population by all effective measures.

Increasing energy supply shortages

It is expected that there will 300 million people working in township industries by 2000. If each worker's output amounts to 3,000 yuan, and assuming average energy consumption per 1,000 yuan drops from the present 790 kilograms of coal equivalent (kgce) to 310 kgce, the commercial energy supply will amount to 200 million tce. In China, 37 per cent of villages still lack a power supply, and average rural power consumption amounts to only 60 kWh per capita, which is only 1 per cent of US consumption. The total power capacity of farm machines (mainly tractors) is 150 GW, but the average yearly worktime is a mere 300 hours owing to insufficient supplies of diesel fuel. The yearly energy requirements of villages and towns in 2000 are estimated to be 300 TWh of power and 20 million tons (Mt) of diesel fuel. In view of the fact that demand for energy in urban areas is increasing faster than that in rural areas, the ever-increasing shortage of energy supply in city industry will make township industries lag further behind. It will therefore also be difficult to fulfil demand in rural areas.

The value of emerging service industries in townships

If China's more than 60,000 townships could each develop a competitive product that suits local conditions, then all service industries supporting the development of this product should play their part in order to enable it to sell well in the market. As the practice of "one town, one product" becomes more widespread, linked occupations such as industrial plantation, livestock farming, storage, manufacturing, transportation, marketing, information, construction, finance, insurance, researching, consulting, and other service industries are also increasing. Most of these occupations belong in the category of tertiary industries, and would provide jobs for young workers. If an average of 3,000 workers in each town could be absorbed into these trades, 180 million workers could be employed and the problem of their influx into cities could be avoided. In terms of energy consumption, no more than 100 kgce per 1,000 yuan GDP would be needed to support these service industries, and their output-input ratio would be one of the highest. However, effective training of managers in each business category should have priority. It would be logical for them to come from cadres willing to change jobs as well as from educated young people returning to their own villages and towns.

The potential energy output of human and animal power

There are 300 million rural labourers in China providing energy equivalent to 18 GW. Suppose each of them works 250 days per year and 8 hours per day, their total work would be equivalent to 36 TWh. However, other than manpower-operated machines such as bicycles and sewing machines, neither R&D institutes nor machine industries have paid much attention to the development and production of similar machines or equipment that are highly efficient but consume little commercial energy other than manpower. A large part of this energy is wasted owing to the use of inefficient old-fashioned equipment, although this situation is improving since the opening of commodity markets everywhere.

As for the number of draught animals, this is expected to increase from a recent figure of 80 million to 200 million by 2000. The energy output of 80 million animals is equivalent to 33 GW. Suppose they work 140 days per year and 8 hours a day, their total work would be equivalent to 37 TWh. The same amount of work of 37 TWh would consume 17 million tons of diesel oil per year if generated by diesel engines. Research shows that the average draught animal's yearly work is only 70 days or 16.5 TWh, with an efficiency less than 50 per cent. However, the energy of animals is indirectly derived with great efficiency from solar energy and should not be neglected in rural agro-industrial activities. In some developing countries such as China and South-East and South Asia, they are still major power suppliers for farming. Quite a few environmental workers consider the efficient use of animal power in rural areas instead of petroleum as a matter of progress rather than retrogression.

The advantages of small-scale hydropower plants

Small-scale hydropower potential in China amounts to 150 GW, of which 70 GW can be exploited. Construction of new small hydropower stations is planned to add 25 GW by 2000, using less than one-third of the total potential. Analysis of available data reveals that the capital requirement of these stations was 1,250 yuan per kW, which is affordable by rural communities. Since they satisfy the essential requirements of both economy and technology, these new stations should be constructed as soon as possible. With a national effort, capacity of 45 GW could be constructed. Such a power supply would greatly facilitate industrial development for township enterprises in mountainous regions. For power stations where over 60 per cent of their drainage area is covered by vegetation, it would be feasible to raise funds on liberal terms from the local community or bank for their construction.

The capacity of numerous small hydropower stations would add up to quite a large figure despite their individual small scale. The power from each plant could be consumed locally, thus avoiding the necessity to invest in long-distance transmission lines. In addition, small stations could be constructed in far less time than is required for large projects. They could also have the benefit of providing flood-control and irrigation for local regions if integrated with other water and soil conservation projects. Fuelwood harvesting would end if the hydropower supply were used for cooking, as already happens among about 20 per cent of local inhabitants in China's 700 counties where hydropower is available. Hydropower is used, too, in township enterprises such as pottery, tobacco, and tea industries for their thermal energy demands. The outcome of all these measures is that: forests are preserved, the environment is protected, and tourists are attracted.

3. The benefits of energy efficiency improvements and the use of new and renewable natural resources

Reduced use of synthetic fertilizers

There are several ways to reduce expenditure on energy and to tap new resources in China, such as the development of straw- or fuelwood-efficient stoves, biogas digesters, solar stoves, and fuelwood forestry. All these measures could save large amounts of biomass from being burnt. The renewable biomass thus saved could be digested either in biogas pits or by herbivore animals to produce valuable organic fertilizers to be returned to arable land after the production of biogas or animal products. This is a good way to reduce the amount of synthetic fertilizers used in farming, and to maintain the quality of the soil, which is an important factor in sustaining high yields on arable land. Biogas has another function of killing rats and pests in grain bins, thus lessening the loss of grain in storage.

Maintenance of soil quality

It has become common knowledge that excess use of synthetic fertilizers has a destructive effect on soil quality, and their diminishing returns on China's arable land have already given warning to the government as well as to peasants. Since the development of renewable energy sources in rural areas produces large quantities of organic fertilizers to replace synthetic fertilizers, this in turn is of great help to the development of sustainable eco-agriculture. In fact, whatever the model of eco-agricultural system, it must be built on the basic reconstruction of rural renewable energy resources.

Increased rural incomes from backyard-farming

In China's vast areas of farming districts, family-size backyard-farming is popping up everywhere. Although the type of business varies, the outcome is quite similar; i.e. the family works harder and makes more money both of which are good for the rural socio-economy. For instance, a typical family in Funan County has installed a biogas digester pit in their backyard. Depending on the supply of biogas, jobs such as cooking, seedling and vegetable cultivation, fertilizing, pest control, grain storage, and animal feeding keep the whole family a lot busier but also a lot richer than before.

Amelioration of the energy shortage

China has a large variety of biological resources, yet on a per capita basis they are quite low and they are far from completely and comprehensively utilized. Their economic potential is limited, and wastage is considerable. If people could make full use of them, their potential outcome would be tremendous. In hundreds of projects set up by China's National Committee of Science and Technology, many have been enabled to develop this potential under prevailing conditions in China's rural areas. One of the problems that has arisen is, of course, the inadequate supply of energy for farm production. In view of the fact that the supply of commercial energy to rural and township agro-industry is likely to be limited for rather a long time, this increases the importance of developing rural renewable energy resources such as solar energy, wind energy, biomass energy, tidal energy, geothermal energy, etc. to higher levels as the best solution to this energy shortage.

The sustainable development of rural agro-industry

A high proportion of peasants have made a fortune from domestic livestock rearing. Pigs, cows, cattle, rabbits, geese, fish, crabs, and silkworms are the prevailing products in Funan, Feixi, Jieshou, Fuyang, Lu'an, Jiashan, Wuhe, and Jinzhai counties, respectively, in Anhui Province. In Funan County, biogas enthusiast Shen Chaojun invented the technology of using fermented liquid drawn from biogas digester pits as an additive to raise pigs with great success. Another technological invention worth mentioning here is the successful interplanting of wheat and paulownia trees in the vast East Henan and North Anhui regions. This new method of combining farming and forestry not only increases peasants' incomes, but also greens the rural areas and humidifies the micro-climate. Rural families could benefit from using liquid from a biogas digester pit to raise pigs, or from a biogas lamp, a manpowered sewing machine, and a biogas iron to run a garmentwork business. It is clear that different kinds of renewable energy resources could aid the sustainable development of rural agro-industry in developing countries such as China's vast rural areas.

The dispersion of culture and industry from urban centres

There are many links between urban and rural areas. Apart from commodity trading, communications and transportation, information transmission, technology transfer, and the export of training and labour services, the dispersion of culture and industry from urban centres into the surrounding rural areas also needs consideration. According to business research, the most economic industrial layouts are those of light industry and the textile industries, and in particular the food industry. For example, the primary processing of products such as tobacco, tea, and sweet potato (mostly dehydration processes) is carried out in situ, whereas subsequent processing and packaging into finished products occur in township factories. Those factories require an adequate supply of raw materials from the surrounding rural areas to keep both sides in business.

Reduced energy intensity

Past agro-industrial development in China involved incompatible demands for economic inputs for agriculture and energy development. This is the main reason for the declining output-input ratio in agriculture in recent years. Considering that agriculture and energy are China's two focal strategies, a joint strategy appears even more important. From the point of view of outputs and inputs, rural energy development has a large output-input ratio. It has already been seen that the straw- or fuelwood-efficient stove can improve thermal efficiency by 30 per cent at very little expense. In comparison, a coal mine project to produce 4 million tons would require an input of 800 million yuan and a construction period of 8 years. The same thermal value could be saved by installing millions of efficient stoves in rural families at a fraction of both the inputs and time required in investment and research and development. It is no exaggeration to say that the output-input ratio of this rural project would rank first not only among all energy-efficient projects, but also among all other industrial projects.

Other socio-economic, environmental, and resource benefits

The spectrum of research and development of high and new technologies in the field of energy conservation in China's rural areas has broadened quite a lot since 1978. The socio-economic, environmental, and resource benefits have thus been greatly improved.

For example, ever since improved pig-raising started in Funan County of Anhui Province, there has been an upsurge in the combined construction of biogas digester pits, pigpens, and latrines, which is spreading far and wide. Peasants have found that the addition of fermented liquid from the pit to feeds makes pigs disease resistant and gives them a better appetite. This is because bacteria and the eggs of parasites are completely killed in the process of anaerobic fermentation in the sealed pit, and nutritious ingredients such as the B vitamins and amino acids are produced in the same process. For instance, lysine, which is lacking in natural pig or chicken feed, shows up in the pit liquid samples. If these developments were further combined with the sinking of water wells and water filtration measures, both environmental and health conditions in rural areas would be greatly improved.

4. Summary

Rural energy consumption in China is spreading from household to industry nowadays, and is leading to a nationwide energy shortage.

Thus, the rapid advance of township industries is incompatible with the present energy supply, which must be treated as an important element in the national reconstruction of more than 60,000 townships in China. In spite of there having been a good start in the development of renewable energies in rural areas, a large amount of work still remains to be accomplished in order to develop the land sustainably, not only for ourselves but also for coming generations. As the statistics show, although China leads the world with some 5 million biogas digester pits having already been constructed, this is a tiny figure in relation to China's 192 million rural families. If the total energy content of the biomass accumulated through photosynthesis were to be fully utilized, this would tap a hundred-fold larger amount of energy resources. Other statistics show that only a quarter of the 20 GW capacity of small-scale hydropower stations in east and south China's seven provinces had been exploited. Furthermore, the 300 counties with successful rural electrification experiments represent only 17 per cent of the total number of counties in China.

Acknowledgements

Statistical data on the development of rural energy and environment after 1988 were submitted by Deng Keyun, head of the Department of Energy and Environment, Ministry of Agriculture of China, to the Committee on Environmental Protection, National People's Congress of China. Statistical data on the development of small-scale rural power after 1988 were submitted by Zheng Xian, head of the Department of Hydropower, Ministry of Water Conservancy of China, to the Committee on Environmental Protection' National People's Congress of China.

Comments on part 5

Yujiro Hayami

I have little disagreement with Dr. Takase on the issues covered by his comprehensive and well-balanced review. Therefore, I will mention only one critical issue that is not covered, that is the need to design institutions that are compatible with the incentives of local people to conserve natural resources in developing economies. I will draw on two examples of forest conservation programmes that I observed in South-East Asia.

The first example relates to a programme of privatization of forest land management in Viet Nam. Since 1981, Viet Nam has moved from the socialist-style cooperative-managed farming system to a household-managed system. The cooperative farms were subdivided and allocated to individual households to be privately managed. It is well known that this reform has resulted in major increases in crop yields, especially for rice. More recently, Viet Nam has begun to experiment with a programme that transfers forest land to individual household management. Under this programme, state-owned forest lands hitherto managed by cooperatives are allocated on long-term leases to individual households if they agree to reforest and manage them properly and to hand over a share of the timber harvests as ground rent.

In comparison with arable land, forest land is less amenable to private management by a single household, partly because of the externalities involved in the use of forest land and partly because of the difficulty of demarcating it into distinguishable parcels for exclusive use by individuals. To my surprise, despite the theoretical difficulties involved in the privatization of forest management, this scheme appears to be highly successful. Reforestation has been speeded up, and forest conservation has been strengthened. Usually, a hill neighbouring a farmer's residence is allocated to his household, so that protection of the forest against fire and timber theft can be efficiently accomplished by the family with little opportunity cost. Further, when land is allocated that is a long way from home, farmers have built temporary huts where family members stay to guard the plot. It was also remarkable to find in the site we visited that the boundary between allocated sectors was clearly demarcated by an open space, sometimes marked by stones, which was used as an access road into the forest.

Typically, households that are allocated forest land plant seedlings of eucalyptus, pine, and acacia, mainly using family labour during the slack season for farming activities. For a few years they grow upland crops between the seedlings, then, as the trees become taller, the forests begin to provide employment and income from thinnings and prunings for fuel and other uses as well as from grazing for animals.

It is too early to judge the success of this household-managed forestry system. It appears, however, that this scheme has great potential for solving the difficult problem of how to achieve the socially optimum conservation of forest resources while producing current income and employment for local people not only in Viet Nam but also in other developing economies in the third world. In many developing countries, such as Indonesia, Thailand, and the Philippines, most forest land is under state ownership and management. Yet, partly because of the weak administrative capacity (and, often, corruption) of public agencies and partly because of the difficulty of organizing local communities for collective action, serious depletion of forest resources has been ubiquitous.

To reverse this trend it is necessary, but not sufficient, to strengthen government administrative capacity and community organizational power. A crucial requirement is incentives for individuals to undertake resource conservation efforts in a way consistent with social welfare criteria. The household management of forest lands in Viet Nam appears to represent a highly promising example of "incentive-compatible" institutional arrangements.

In contrast, an institutional design based on a miscalculation of local people's incentive mechanism can result in devastating failures in natural resource management. Such a case was observed in a reforestation project in the Philippines about a decade or so ago. This project attempted to mobilize local people's labour for reforestation by paying a fee per seedling planted. This scheme speeded up reforestation, but, as hills and mountains in nearby villages were planted with seedlings, people found their employment opportunities disappearing. They therefore began to destroy the seedlings by setting fire to them at night.

The effective design of institutions for the conservation of natural resources in the third world must be based on a full understanding of human behaviour and incentive systems in local communities.