Energy Poverty and Income Poverty: How Do They Differ?

by Doug Barnes, Shahid Khandker and Hussain Samad

There is a continuing discussion over what constitutes energy poverty with several approaches being used to define it.  But as yet, no consensus has emerged for measuring and monitoring energy poverty and explaining why and how it differs from income poverty.  After all, income poverty is a standard measure, so if the two are highly related it would not be worth the effort to develop a unique measure for energy poverty.  In other words, why create a separate indicator of energy poverty because in the end it would just be a reflection of income poverty.  Everyone seems to know about energy poverty,but truly defining and measuring it gets a bit complicated. 

About 10 years ago energy poverty was thought to be related mainly to lack of access to electricity.  More recently the United Nations and Department of International Development of Great Britain (DFID) have broadened definitions of energy poverty to multiple indicators using somewhat arbitrary weights.  International Energy Agency (IEA) has never actually defined energy poverty (except that it is related to lack of access to modern energy), but advocated that better ways of using biomass energy for cooking should be an important policy for household energy.  Also, most international organizations measure energy poverty indicators as outputs (e.g., lack of electricity connections) rather than outcomes (e.g., welfare gains from electricity consumption).  Thus, unlike income poverty—which is usually based on minimum consumption of food and non-food items necessary to sustain a livelihood—energy poverty lacks a well-established theory based on energy demand to establish a relevant poverty line. 

In several recent papers the authors of this post have taken a different approach, focusing on energy demand in order to define energy poverty.  Like income poverty, energy poverty may be defined by the minimum energy consumption needed to sustain lives.  This approach defines an energy poverty line as a threshold of energy consumption needed to sustain life.  Similar to the concept of income poverty, we reasoned that there had to be a point at which energy is essential for living.  After all, people have to cook their food; in cold climates they must heat their homes; and they generally need a minimum level of light in the evening for basic tasks (sometimes including eating).  In theory this is all well and good, but the question remained how to measure that threshold. 

Figure 1:  Energy End Use Energy Consumption by Income Class,
Bangladesh and India

Therefore, we tested this demand approach using rich household survey data sets from Bangladesh and India.  We found that although energy consumption rises with income, this increase is not uniform (Figure 1).  This is because energy consumption at lower income groups turned out to be somewhat flat--in economist's terms it is income inelastic (does not rise with income).  After those minimum levels, energy consumption increased for households with ever higher incomes--once again in economist's terms, income elastic (does increase with income).  The theory is that for those levels where the energy income relationship is inelastic, this is the minimum level of energy necessary to maintain a healthy life.  This is the basic level of cooking, heating, lighting or other energy service needed to sustain life. 

Resurrection of ESMAP Knolwedge Exchange Series 2005-2009

Between 2005 and 2009 I was the technical editor of an ESMAP Knowledge Exchange Series that involved the publication of four page summaries of current energy issues.   When I recently reviewed these notes after four years, I was struck by both the quality of these four page notes and the continuing relevance of the issues covered.  Also, most of the authors of these notes have 20 to 30 years of experience of working on energy in developing countries issues.   Because they are no longer very prominent on the ESMAP website, buried beneath more recent work, I have decided to resurrect them in this blog

I am sorry for the long delay between posts.  Both an illness and work somehow got in the way of working on this blog.  I have decided to revive it, but will not post as often as before.  But continue to check back as there will be more to come. 

Retroactively I have grouped these Knowledge Exchange Notes into four groups.  The first is on grid and offgrid rural electrification programs.  The second is on electricity generated mainly for the electricity grid.  The third group is biomass energy both for cooking and transport.  Finally, there are two notes on how rising energy prices impact the poor. 

The Basics of Wood Burning Stoves: A Case for Standards or Rating Systems?

Many people interested in better stoves know something about fire, smoke, health and new ideas.  However, to explain these on a more fundamental level that is understood by all can be difficult.  Therefore to explain the relationship between health and smoke, I turn to the late comedian Steve Allen who said that “Asthma doesn't seem to bother me any more unless I'm around cigars or dogs. The thing that would bother me most would be a dog smoking a cigar.”  For those who are promoting stoves innovations, I quote Mark Twain who says “The man with a new idea is a crank until the idea succeeds.” 

More seriously, I recently came across this nice brochure on space heating stoves that has been published by the California Environmental Protection Agency.  I was struck by this brochure because in a very simple way it publicizes the issue of smoke and health, the need for standards,  the basic principles of combustion and even the alternatives to wood stoves including gas and electricity.    These are many of the same issues that the clean cooking community today is attempting to communicate to the general public.  This brochure highlights the fact that improved heating stoves in the United States and other developed countries are now very efficient and burn very cleanly compared to past stoves.  But this was not always the case. 

Painting of Old Heating Stove in School

On a personal note, I can remember old coal stoves used to heat "temporary" small classrooms built to accommodate a sudden rise in student populations.  These "potbelly" coal heating stoves were similar to the wood burning stove in the picture.  At the time in western Pennsylvania coal was king and this was at the very end of the time period when people would heat with traditional coal stoves.  Was it smoky? Yes. Was it energy efficient? No. Did it give good even heat?  No.  Wast it durable? Yes. Was it safe? Yes. Was it cheap?  Yes.  Now of course schools are heated with modern systems. 

Even now there are legacy fireplaces and wood stoves that burn warmed air in the house which in turn draws in cold air from the outside.  Thus, the old traditional space heating stoves in developed countries are somewhat analogous to open cooking fires in developing countries.  The rather important exceptions are that the cooking fires and traditional cookstoves in developing countries typically are built of local materials by those who use them and they also do not have chimneys.

Comparative Cooking Costs in Developing Countries

By Douglas Barnes and Keith Openshaw

Kerosene Lamps and Stoves, Hyderabad, India by D. Barnes

Recently we have just reviewed many of programs for improved stoves in developing countries, and we were quite surprised to find that there were few analyses of comparative cooking costs. In the glory days of country energy assessments comparing the cost of cooking to enlighten energy policy makers was very common. Today we stress energy efficiency, combustion, emissions, and carbon. However, if people are going to adopt these stoves the comparative cooking costs are an obvious important place to start. Keith Openshaw who has extensive experience with improved stoves is a coauthor of this posting. 

To revive this lost art, we will explain the steps for calculating comparative cooking. The first step is to assemble the necessary data. This includes:

• Cost of the stove;
• Lifetime of the stove;
• Efficiency of the stove;
• Price of fuels used burned by the stove including wood or other biomass fuels;
• Fuel collection hours for biomass fuels;
• Quantity of fuel consumed in the household per month; and
• Average wage of agricultural workers.

One caveat is that the comparative costs in this analysis are hypothetical because they assume that families cook exclusively with one fuel. Also, we use world market prices and average fuel consumption levels as defined by many different household energy surveys. Thus, these figures can be considered as typical but they do not relate to any one country due to various policies to tax and subsidize household fuels. They at least give us some perspective on the comparative costs of cooking in developing countries.

For much more continue below....

Improved Stoves in Developing Countries by the Numbers

Nepal Improved Stove by Simon de Trey White WWF-UK

There are 3 billion people in developing countries that rely on solid fuels for almost all of their cooking. The question can be asked how many of these over 800 million households cook with an improved stove? The answer comes from a new study by the World Health Organization (WHO) and the United Nations Development Programme (UNDP). Like any good mystery story you will have to skip to the end for the answer. All I will say is that the results may surprise you.

Before turning to the numbers, it is important to define an improved stove, and this is actually quite a contentious subject among specialists. The original programs were developed during the energy crisis of the 1980s and stoves were developed mainly to conserve biomass fuels. So energy conservation is the first definition. During the 1990s the literature on indoor air pollution was starting to link smoky stoves and health issues. At the time it was accepted that you need a chimney to remove smoke from the house. Thus energy conservation and smoke removal became a popular mandate. More recently in the last 10 years there is beginning to be evidence that the pollution from incomplete combustion of biomass energy might be the main health issue. Chimneys simply move the smoke to the outside only to drift back indoors. Now let’s add to this mix climate change and green house gases that must be taken into consideration. The demands on the humble biomass stove seem to grow and grow.

More below....

Facing Rural Energy Realities in Bangladesh

Adult Literacy Class, Bangladesh by Shehzad Noorani

People often forget that once Bangladesh was close to being the poorest country on the planet. Things certainly have changed in recent years. Bangladesh has always had policies for open trade that have helped the country become an exporter of manufactured goods, much of which has resulted from allowing investments by multinational firms.  Generally economic growth has been very positive in recent years.

The country also has a very ambitious and successful grid rural electrification program that was modeled after the USA rural electric cooperatives which is considered a “best practice.” Even for those rural households distant from the electricity grid, since 2002 there has been a very successful rural energy fund that is administered by a government bank. This fund along with prominent non-governmental organizations such as Grameen Shakti (part of Grameen Bank) and BRAC have been very active in promoting solar household systems for basic electric lighting and communications services for those out of reach from the grid electricity system. In recent years they also have been expanding to other rural energy technologies such as biogas and improved cookstoves.

Much more below....

Household Energy Emissions and Climate Change

LPG Tanks Photo Bharat Tanks

Not being a climate change specialist myself, I have been wondering why biomass energy burned as fuel in households generally does not show up in the climate change calculations. For instance typical families burning 0.18 tons LPG for cooking per year actually gets included in the estimates of greenhouse gas emissions and yet a similar family burning close to 2 tons of fuelwood per year is not considered as producing any greenhouse gas emissions.

According to my back of the envelope calculations people mostly in developing counties burn about 730 million tons of biomass per year for cooking and this amounts to about 1 billion tons of CO2 emitted into the atmosphere. This burning emits about 3%-4% of the world’s total CO2 emissions which according to some estimates is about 28 billion tons per year coming mostly from developed countries. World experts generally do not include the emissions from burning fuelwood, straw or dung because they are renewable. Thus, putting black carbon, health and other benefits aside, from a climate perspective the emissions from burning biomass are generally are considered to be climate neutral.


Continue reading and comment or take the poll below....

Improved Biomass Stoves: The Next Generation

There is a new sheriff in town. Today around the world there is an entirely new and innovative variety of improved stoves that are being manufactured in factories or workshops and sometimes backed by large international companies. These new types of stoves generally are made of quite durable materials that will last for 5 to 10 years or even longer and some come with guarantees. The goal of the marketing of these new stoves is to improve energy efficiency of cooking, to lower indoor air pollution, and to reduce labor or cash expenses required for cooking for the poorest half of the world’s population. The idea is to supply the nearly 3 billion people around the world that still use biomass energy with a stove that that is more modern and efficient than the traditional ones that they now use. Will these new stoves bring order to the wild west of improved stoves programs characterized by hundreds of models made out of vastly different local materials and produced by local artisans?

Traditional Stove in India: Photo by S. Desai

Stoves have existed since the beginning of human history. They have come in various sizes and styles, having been adapted to myriad cultures and food preparation methods. As society has progressed, more sophisticated stove models have been developed. Today’s modern kitchen reflects the many types of standardized and specialized cooking devices available from coffee and tea pots to toasters and gas cooktops. In contrast, the poor in developing countries still burn biomass energy in what amounts to open fires. The smoke produced by these primitiave stoves has been associated with a number of diseases, the most serious of which is acute respiratory illness such as bronchitis and pnemonia.

Envirofit Stove Model G-3300 in India: Photo by Envirofit

The development of improved biomss stoves has witnessed several overlapping stages over the last 30 years and today there are actually three types of programs around the world. One type of improved stove is locally made by small businesses or the even those in household members after they trained. Such stoves are very inexpensive at less than 10 dollars each and sometimes even less than 5 dollars. These artisan-made stoves provide relatively good performance when new, but performance degrades over the short one or two year live of the stove. The second type of stove involves manufactured parts, which are assembled on site with local materials. These stoves are still inexpensive but are a bit more expensive and more durable than the artisan stoves. There will be a later blog on these two types of stoves.

Stovetec Stove: Photo by Aprovecho

The competition is heating up for the “next generation” of stoves that are manufactured in their entirely in factories and workshops world. They include efficient biomass stoves, alcohol stoves, stoves that use pellets, and others. Some of the world’s largest companies have become involved including Shell Foundation, Bosch Siemens, Phillips, British Petroleum and others. There are two interesting examples for wood stoves including the Envirofit stoves and the Stovetec produced by Aprovecho. Others innovations include the Worldstove, First Energy’s Oorja Stove, Gaia’s Dometic (Gaia project), Bosh-Siemens Protos stove, the Onil stove in Guatemala, and the Justa stove in Honduras. A very interesting new initiative by the Government of India endorses the concept of manufactured stoves and implementation is in the planning stages.

The international donors have been slow to embace or support these new generaton of stoves and admittedly this is still an incomplete picture. However, it may just take some time for the realization to set in that such programs can probably be as important as increasing electricity access in terms of improved health and quality of life such as less fuel collection, shorter cooking time, reduced releases of carbon, and less pressure on local forests.

Its nice that there is more international competition in developing new products. However, the question is should there be more interational attention to this problem?

More resources below.

Gender, Energy and Development

Energy is often thought of as poles, wires, and transmission lines. However, the only reason for this infrastructure exists is that they provide some sort of service to industry, businesses, and households. The same can be said for gas pipelines, large storage tanks for liquid petroleum gas and other types of energy. People, businesses, and other organizations pay for all of these energy services. That is the only reason that they exist at all.

Fuelwood Collection S. India by  D Barnes

So it is somewhat surprising that gender is often overlooked in the provision of energy services in developing counries. Electricity certainly has an impact on women and girls in developing countries through making the home environment more livable, encouraging girls to attend school, and reducing household drudgery. Rural electrification and electricity access now is recognized as a significant priority in many developing countries, especially those in S. Asia and Africa. But while attention often is paid to the wires and poles, is there enough attention to appliances operated by women including fans, small refrigerators, spice grinders, rice cookers, toasters, and others?

Also somewhat overlooked in the energy development business is that women and girls also can be the main suppliers of household energy in developing countries. There have been numerous studies documenting that woman and to a lesser extent men spend much time collecting most of their cooking fuels from the local environment. This fuel collection is time consuming and diverts time from both income earning or other household activities. In addition, the literature on the adverse health impacts of indoor air pollution resulting from burning biomass fuels on open fires or low quality stoves has become very well documented during the last 20 years. Finally, cooking fuels in developing countries contribute about 1 billion tons of CO2 to the atmosphere every year, and yet there is barely a mention of household fuels in the climate change debate.

See more below the break.