Fuel substitution: poverty impacts on biomass fuel suppliers

This paper reports on a project to determine the full livelihood and poverty impacts of fuel substitution. The paper makes recommendations to policy makers on how negative impacts can be mitigated.The project focused on traditional fuel suppliers in Addis Ababa, Nairobi and Kampala in order to identify and characterise the traditional fuel supply sector from a livelihood point of view. The report evaluates the various alternatives to traditional biomass fuel use on the basis of a number of key sustainability indicators, including health, environment, economy and social aspects. It identifies which options are most favourable for reducing the negative effects of traditional biomass fuel and minimising other potential social, economic and environmental impacts.Findings include: The use of biomass fuels is increasing, both in rural and urban areas and this trend is not expected to change in the near future. Although governments and donor organisations have made a number of attempts to reduce the use of biomass fuels, the uptake of modern fuels has not been successful in displacing the absolute amount of traditional fuel produced and used.The traditional fuel sector in all three countries is highly decentralised, relatively easy to enter and highly competitive. The sector is a significant source of employment for many people in urban areas, particularly those in the lowest income categories.There is no evidence of negative livelihood impacts of fuel substitution policy on fuel suppliers, indicating that policies in place have been ineffective at reducing the amount of biomass that is being consumed in urban areas.Widespread and successful fuel substitution policies and measures are very likely to result in loss of livelihood for many, and will particularly affect the most vulnerable of suppliers.The more formalised nature of modern fuel supply indicates that it is extremely unlikely that most traditional fuel suppliers would be able to make a transition from the informal traditional fuels sector to the more formalised modern fuels sector.Recommendations include:Collaboration between agencies responsible for health, energy, environment, housing and rural development is required in order to ensure that impacts are not simply transferred from one area to another.The traditional fuel sector should be acknowledged as an industry in its own right, in terms of employment opportunities and income for a large number of people; within this, the valuable contribution of traditional fuel suppliers, especially women, in providing an important and affordable source of fuel for institutional, commercial and domestic consumers should be recognised.Vulnerability of fuel suppliers should be recognised and a commitment made towards improving their working and living conditions as part of current and future poverty reduction strategies.Impacts on livelihood should be systematically considered when addressing other social, economic or environmental objectives that may result in loss of employment for vulnerable members of society working in the infrastructure and service sector, including sector formalisationNew and existing policies and strategies must be developed for the rational and efficient production, transportation and marketing of biomass fuels, as well as for improved household energy efficiency.Long-term urban fuel strategies need to be developed that account for changes such as increase in demand, and progressive urbanisation.If regulatory measures are adopted, it is of fundamental importance that those are enforced in order to obtain the intended results.