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Biogas: Clean Energy Access with Low-Cost Mitigation of Climate Change

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Abstract

Using data from the nearly 6000 households in the Nepal Living Standards Survey of 2010–11 we find that the mean reduction in household firewood collection associated with use of a biogas plant for cooking is about 1100 kg/year from a mean of \(\sim \)2400 kg/year. This estimate is derived comparing only households with and without biogas in the same village, thus effectively removing the influence of many potential confounders. Further controls for important determinants of firewood collection, such as household size, per capita consumption expenditure, cattle ownership, unemployment etc. are used to identify the effect of biogas adoption on firewood collection. We derive bounds on omitted variable bias using the proportional selection assumption. Our central estimate is much smaller than those in the previous literature, but is still large enough for the cost of adopting biogas to be heavily subsidized via carbon offsets at a modest carbon price of $10/tCO\(_2\)e, when using central estimates of emission factors and global warming potentials of pollutants taken from the scientific literature.

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Notes

  1. Meaning the percentage of energy in the fuel that is transferred to the food being cooked. See below.

  2. Such conclusions generally do not consider the animal raising decision. Households are typically assumed to have the same number of large dung-producing animals with or without adopting biogas. Biogas plants then allow the dung from those animals to be used.

  3. For empirical support of such “fuel stacking” behavior, see Heltberg (2004, 2005), Leach (1992), Davis (1998) and Campbell et al. (2003).

  4. A bhari is a load of firewood, the amount one person usually carries on one trip. Very few households collected firewood using carts and the appropriate conversion factor was used in those cases.

  5. The current exchange rate is approximately 100 Nepali rupees per US dollar.

  6. Mean firewood collection for households whose primary source of cooking fuel is firewood is about 2400 kg/year.

  7. For example, the presence of a sick person who needs more firewood for heating. We control for presence of a chronically ill person in Model 2.

  8. We discuss in the next section the adjustments to our estimate that would be necessary when we take into account the possibilities that (a) some biogas users would substitute biogas for cylinder gas rather than firewood, and (b) some new adopters of biogas may be induced to hold more cattle than they would have done if there were no increase in the biogas subsidy.

  9. Baland et al. (2010) use a conversion factor of 35 kg/bhari for the 2003 round of the NLSS.

  10. Firewood used for cooking is in principle carbon neutral if equivalent trees are replanted or allowed to grow. This is how the term “sustainable” is used in this context.

  11. See http://www.ashden.org/files/BSP%20case%20study%20full.pdf. Accessed January 29, 2015.

  12. See http://calcarbondash.org/ and http://www.edf.org/california-cap-and-trade-updates. Accessed January 29, 2015.

  13. The uncertainty arises largely from uncertainty in aerosol-cloud interactions.

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Authors and Affiliations

  1. Economics and Planning Unit, Indian Statistical Institute, 7 SJS Sansanwal Marg, New Delhi, 110016, India

    E. Somanathan

  2. South Asian Network for Development and Environmental Economics, ICIMOD, GPO Box 8975, E.P.C 1056, ICIMOD, Khumaltar, Nepal

    E. Somanathan

  3. Department of Economics, Portland State University, Portland, OR, USA

    Randall Bluffstone

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  1. E. Somanathan
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  2. Randall Bluffstone
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Correspondence to E. Somanathan.

Additional information

Financial support for this research was provided by the World Bank. We thank an anonymous referee, Mike Toman, and seminar participants at the REDD workshops in Dhulikhel and Kathmandu for comments, Animesh Kumar and Swagatam Sinha for research assistance, and Milind Kandlikar and Chandra Venkataraman for pointers to the scientific literature.

Appendix

Appendix

See Table 4.

Table 4 Summary statistics of NLSS-III household sample
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Somanathan, E., Bluffstone, R. Biogas: Clean Energy Access with Low-Cost Mitigation of Climate Change. Environ Resource Econ 62, 265–277 (2015). https://doi.org/10.1007/s10640-015-9961-6

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