/1 33& INDUSTRY AND ENERGY DEPARTMENT WORKING PAPER ENERGY SERIES PAPER No. 53 Urban Interfuel Substitution, Energy Use, and Equity in Developing Countries: Some Preliminary Results FILE COPY Report No. :11336 Type: (MIS) Title: URBAN INTERFUEL SUBSTITUTION, Author: Ext.: 0 Room: Dept.: March 1992 MARCH 1992 WRW The World Bank Industry and Energy Department, PRE Urban Interuel Subsftiution, Energy Use, and Equity in Developing Countries: Some Preliminary Results by Douglas F. Bames and Uu Qian The World Bank April 1992 Copyright (c) 1992 The World Bank 1818 H. Street, N.W. Washington, D.C. 20433 U.SA Tis paper is one of a series issued by the Industry and Energy Department for the information and guidance of World Bank staff. The paper may not be published or quoted as representing the views of the World Bank Group, nor does the Bank Group accePt responsibility for Its accuraynd completeness. Acknowledgments This paper was presented at the 1991 International Conference of the Intemational Association for Energy Economics, East West Center, Honolulu, Hawaii, on July 8-10, 1991. The research was prepared as part of a research project funded by the UNDP/World Bank/Bilateral Assistance Energy Sector Management Assistance Program (ESMAP) and the Research Administration Budget of the World Bank. Abstract of Urban Interfuel Substitution, Energy Use and Equity in Developing Countries: Some Preliminary Results The limited understanding about the nature of the energy transition hinder efforts to formulate policy concerning the most effective and socioeconomic strategy for providing energy for households in urban areas. Understanding the energy transition will help provide a framework for understandint the policy choices for urban areas. At what stage do the externalities cause by significant harvesting of wood around urban areas Justify interventon to encourage households to switch to other fuels? At what level of income is it realistic to expect that households will switch from traditional fuels to modern fuell3? Do different energy pricing policies have a harmful or beneficial impact on the poor? Do wood prices rise gradually in urban areas or do they suddenly shoot up causmg problems for markets? Is there a role for government policy to direct the pace of the transition between fuels? The findings in this paper are a beginning attempt to start to answer some of these fundamental poicy questions. From the preliminary evidence we can say the government policy plays a very important role in influencing households to chose one fuel over another. Secondly, policies to promote LPG for households with incomes that are less than about 25 dollars per capita per month are likely to lead to disappointment. Apparently electricity can be promoted at much lower levels income because of the high value urban households have for lighting, although this will require substantial capital costs by the electricity industry. In developing countries, wood fuels do not disappear completely as incomes rise since many high income households still use wood, reflecting the utility of these fuels for urban households. However, they do seem to disappea from urban households in large metropolitan areas over 1 million population, where wood apparently is very hard to obtain. The urban poor are probably affected most by urban fuel policies, since they are spending a significant proportion of their incomes on energy. Obviously, there is much more work to be completed before we fully understand the dynamic patterns affecting urban interfuel substitution in developing countdes. Table of Contents Urban Interfuel Substitution, Energy Use and Equity !n Developing Countries Some Prdiminary Results ................................................. .1 L Introduction ...................l .......................... IL Main Policy Issues of the Energy Trznsion .3 EL Methods of Analysis .............. .6 TV. An Overvew of Urban Residential Energy Use ............................ .7 Overall Panerns of Urban Ener Demand .... .......................7 Energy Policies and Urban Fuel Use .......................9 me Effect of Urban Size on Fuel Use ......... .............. ... 12 TJrban Income, Equity, and Fuel Use ....................... 14 V. conclusion ..... ...... .. .................................... 19 REFERENCES ................................................................. 20 U;ban Iterfuel Substitutin, Ener" Use and Equity in Developing Countries: Some Prelmina Results L. InfrducAion 1.1 The dramatic growti of urban populations in developing countries has caused a rise in the demand for energy, food, water, and other resources. The growing number of people living in urban areas of developing nations is quite dramatc. Over 1.25 billion urban dwellers live in 360 cities over 500,000. Overall population growth rates for rural areas of between 1.5 and 4 percent per year are relatively high. By contrast, the urban growth rates are even higher at among 3 and 7 percent per year. The cause of the high growth rates is high birth rates and extensive nigration from rural areas to cities. The migrants from mrral areas bring with them their traditional pans of energy use, which are mainly based on the use of wood fuels. In urban areas demand for wood products is highly concentrated, creating difficulties such as the environmental problems associated with harvesting trees around urban centers. However, the urban demand for fuels also creates opportunities for possible economies of scale in the distribution of modem fuels. 12 Rapid increases in demand for energy resources has been the basis for many energy-related problems in urban areas. In some countries, the poorer households that use wood fuels are affected by rapidly rising wood prices without other market choices being made available to them. In many cases' consumers do not even have a choice between wood-based and modem fuels because they are not available in the market place due to government policies or the relative remoteness of the urban location. The supply of modem fuels such as kerosen, LPG, and electricity L urban areas for cooking has been affected by sometimes inconsistent government p. icies. Even where substitute fuels are available, there can be a substantial difference between the economic cost of importing or producing the fuel and the cost that consumers acually pay. Also, the environmental extenalities involved in harvesting trees for urban markets are not reflected in urban market prices of wood (Openshaw and Feinstein, 1988; Teplitz-Sembitzky and Schramm, 1989; Newcombe, 1984). The growth in demand for woodresources around cities has caused deforested rings around some urban centers extending 100 kilometers and more (Bowonder and co-authors, 1987b; Allen and Bares, 1985; Anderson, 1986; Fishwick and Anderson, 1979). 1.3 The purpose of this study is to systematically analyze the dynamics of interfuel substitution in urban aras of developmng countries, along with exploring the feasibility of substituting kerosene, LPG, or electricity for wood-based fuels. To accomplish this task the study examines the causes of interfuel substitution in urban areas. xe research includes an analysis of consumer behavior and how it is affected by urban fuel policies, urban energy availability, and socioeconomic characteristics of households within urbai- areas. Finly, the analysis must exanmne the potential effect that encouraging interfuel substitution may have on income distribution and poverty. 1. Most past studies of interfuel substitution have been mainly for individual urban areas, so they have examined the transition for specific urban areas under study. The rewards of comparing energy use patterns between cities involve a major step forward in understanding the energy wansiton in developing countries. By comparing Urban Intebl Subsitution Page 2 ene use pattns between small and large cities, poor and rich income classes, between regions with extensive forests and regions with few trees, and between areas with government policies to subsidize modern fuels with those that tax them, a qualitative jump can be made in understanding the processes that drive interfuel substitution in developing countries. Maidng policy recommendations for individual countries is not the goal of this paper, as this is left to those more involved in individual country studies. Placing individual country in the context of a larger transition frame- work, the quality by individual country studies can be improved. 1.5 The results of this study shed some light on the effectiveness of existing energy policies in developing countries, the condidons under >bhich transitions to modern fuels can be expected to occur, and the socioeconomic and environmental impacts and consequences of interfuel substitution. As expected, the preliminay findings indicate that government policy along with income has a significant impact on residental fuels use i developing countries. A somewhat surprising finding is that mamy of the poorest households in urban areas of developing countries use eecticity, but rarely use LPG. In addition, wood fuel use is fairly extensive in all but the lagest cities. It should be cautioned that the results presented m this paper are pre y and more analysis is needed before firm conclusions can be drawn. Before turning towards a more detailed ex on of the energy trantidon, we tun to some of the main policy issues addd i the stdy. Urban Inteifuel Substitudon Page 3 lI. Main Polcy Issues of the Energy Transidon 2.1 The main objectives of the research are to systematically organize the individual country experiences and quantitatively analyze cross-urban patterns of interfuel substitution. Although well-known problems exist for making such cross ational comrpnsons, they overcome some of the difficulties encountered in the analysis of individual countries or cities. This paper is a first step in analyzing the empirical patterns involved in the energy transition. hLe larger objectives of the curent study are to examine the factors that are associated with the transition from traditional fuels to modern fuels. A different set of polFe .. . may be appropriate at different stages, whether it is to continue to use wood, to impre { market access to modern fuels, or to promote a switch to modem fuels. The extent to which wood fuel demand can be reduced through interfuel substitution strategies are to be assessed. Some of the widely divergent patterns of interfuel substitution in urban areas that occur despite similarities in conditions need to be explained. Finally, the equity implications of existing fuel policies and for existing patterns of fuels use in urban areas are to be examined. 2.2 Most of the work done to date on urban interfuel substitution has been either at the level of one urban area or several urban areas within one country (UNDP/World Bank, 1989a, 1989a, 1989b, 1989c, 1989d, 1988, 1987; Alam and co- authors, 1986a, 1985b; Bowonder and co-authors, 1987a; Reddy and Reddy, 1983). Much useful knowledge has been gained from the many good indiv "-al country studies. Individual urban area or country studies have the advantage of examining in depth the local conditions that are associated with different kinds of fuel use, es y focusing on income as one of the key factors affecting substitution. General msights Can be gained from all of them taken together. For example, the findings in Leach's (1986) classic studies of energy in South Asia are based on cross-country comparisons of average conditions and trends. His work provides useful insight regarding urban energy transitions in South Asia. 2.3 Based on the findings of urban energy studies, the factors known to influence energy transitions in various ways include the income, wood availability, access to modern fuels, fuel prices, and government policy. People with low incomes generally use fuelwood or charcoal as their main cooldng fuel (Munslow and co- authors; Chauvin, 1981; Leach and Mearns, 1988; Sathaye and Meyers, 1985). By contrast, people with higher incomes tend to use modem fuels. Higher wood availability surrounding urban areas generally leads to more use of wood as a fuel, but does not affect the fuel used in the upper income groups. Generally people in large, more urbanized areas use more kerosene, LPG, and electricity. Evidence from urban energy studies suggest that government policies tend to encourage the use of certain fuels as people switch earlier than expected into the fuel and condinue using the fuel longer than expected based on their income level (Fitzgerald and co-authors, 1990; Bhatia, 1988). These commnonly held findings form the foundation for a complex series of forces that affect the conditions under wbich fuel choices are based. 2.4 The following stylized description of the energy transition has been developed utilizing the insights from the most recent literature on interfuel substtution (see Barnes and Dowd, 1990 for a review). This description provides a framework Urban Intel Substitution Page 4 conerning how people are currently meeting their needs for energy in urban areas, whether tbere are socioeconomic problems that typically occur at different stages in the transiton, and whether it is feasible or desirable m particular contexts to speed up the transition to commercial fuels. The general description is based on both static and dynamic inferences. It is static in the sense that a given city is represented at a fixed point in time and at a fixed stage in the transition from wood to other fuels. As a consequence, differences in energy use between cities may be caused by unique chacteristics of the city. But it is dynamic in the sense that cities and towns today is at different points in the energ transition. 2.5 The lowest stage is characterized by small cities with relatively low income. In such cities there is extensive use of wood as a fuel, abundar.. wood resources around the city, low wood energy prices, and limited availability of modern fuels. In this stage agricultural expansion and shorter farm fallows surrounding growing urban regions causes trees and bushes to be harvested from common land. At the same time migrants are sftaming into urban areas, bringing with them their traditional and mainly wood-based rural cooling haits. Although demand for wood in the urban areas is increasing quite rapidly, this demand can be met fairly easily by the wood that is being cleared from land that will be used for agriculture and from other land sufrounding the urban areas. As a consequence the price of wood compared to alternative fuels remains quite low, and there is little incentive for people to switch to alternative fuels. However, even at this stage higher income households will switch to fuels such as kerosene, charcoal or LPG, since these fuels generally are more convenient and produce less smoke than wood. But the general pattern is that a high percentage of the urban population will use wood as their prmary cooldag fuel. 2.6 The second stage is characterized by medium sized cities with intermediate levels of wood use, moderate levels of wood resources around the city, wood energy prices that are at or somewhat below prices of modern alternative fuels, uldevelopedfuel markets, and intermediate levels of household income. In this phase, populadon growth causes deforestation and degradation of land around the cities. Consumer demand for wood products exceeds the rate at which trees ae regrown on commnon land, so the wood is rapidly cleared from around the urban areas. During these stage trees continue to be harvested from common or fallow land, pardy because the future costs of replanting and environmental consequences still have not factored into the relatively low maret price of the fuel. The combination of decreasing supplies of wood fuels and increasing demand means that the price of wood fuels flares up or even goes past the price of competitive fuels. In this period there may be a significant substitution of charcoal and kerosene for wood. Charcoal and kerosene use will replae wood as the main cooldng fuel because of both conveniences and the growing scarity of wood. Since charcoal is lighter than wood, the transportation costs of hauling it to the city is lower than for wood. For kerosene, the fuel can be made readly available to middle elass urban consumers without to much investment on their part in cooking equipment, and without too much investment by a government in a distibution system At this stage the ability of consumers to pay for LPG and electricity for cooldnp would sill be quite limited, although a growing number of higher income households will begin to use these fuels. Urban Intrfuel Substitution Page 5 2.7 The third stage is characterized by large cities with low levels of wood use, various leveis of wood rerources around the city, wood energy prices that are competitive with the price of alternative modern fuels, developed modern fuel markets, and high levels of household income. This stage is characterized by the switch out of charcoal and kerosene to LPG or electricity. During this stage, incomes will have risen substantally in urban areas, markets for fuels will be better developed, and consumers will prefer do most of their cooking with LPG or electrcity, while charcoal widl remain a fuel used for specifc traditionil meals. Developed countries and some high income developing countries ae at this stage today. It is the process of how, when and why people anive at this final stage that is of interest in this paper. 2.8 The above description is very general and there are many excepdons. At present most of our understandings of the energy transition consist of case studies that simply describe the process of moving from wood to the higher value conmnercial fuels between income classes. From the extensive literature on individual cities or countries, it is obvious that the process is not so very straight forward. In the middle of the transition, there is a wide distribution of energy substitution and use. In addition there ae distortions in the transidon, including periods when wood might be cheap in urban areas because the prices are based on only cutting and transport costs. We provide this sitylized account to place residant.i- energy use in a wider context. In order to better explain the forces that cause the wide variation in energy use, we will examine the associations between government policy citysize, and income class with respect to energy prices, energy choice, and fuel use 1N urban households. Urban Interfuel Subsdtudon Page 6 III. Methods of Analysis 3.1 From a policy perspective it is just as important to understand how cities and towns today compare to one another as it is to understand how energy use has changed over time. It should l3 cautioned that when we talk of a transition, the analysis will be based on careful comparisons of cities today controlling for factors hypothesized to be important for the future fuel use in these cities. As cities evolve over time it is expected that the changes in their characteristics such as income, city size, and other factors will affect changes in fuel use. The ability to analyze such change is possible only with significant variation between energy use and socioeconomic characteristics of urban areas. 3.2 The effectiveness of government policies to encourage or discourage different types of fuel use can be evaluated through a comparative analysis of urban areas. As indicated, most existing studies have difficulty in dealing with the effects of country-specific policy issues, particularly the effects of subsidies or taxes on interfuel substitution. Although the work on individual countries in general is of high qual',y, some problems arise when trying to examine the reasons for interfuel substitution in urban areas. For instance, the comparative analysis of one urban area to another within one country can be idiosyncratic, because of the lack of variation in a country's policies towards fuels, a narrow range of price variation within urban arnas, and relatively fixed resource endowments surrounding the city. In a single urban area, fuel policies generally do not vary for the period of the study. This can be problematic for the estimation of price elasticities because of the relatively small variation in prices for a given city at one point in time. 3.3 A comparative urban research design in combination with an analysis of urban household energy use in urban areas in individual countries will address most of the important issues involving interfuel substitution. The force that drives the transiton from wood fuels to kerosene, LPG, or electricity will vary both between countries and between urban areas wihin countries. The analysis of the policy issues identified in the research requires significant variance across all the important factors in the study, including household energy use, income class, resource availability surrounding urban areas, government policy, and socioeconomic conditions dependent on type of urban area. The choice of comparative analysis of urban areas meets these requirements. 3.4 The analysis is based on actual surveys of urban household energy con- swnption in 11 countries. Because a typical urban survey includes both prmary and secondary cities, there are data for about 4-5 cities per country (see Appendix A for cities in study) and the cities have been divided into about five income classes each. As a consequence, for the countries included in the project, a data base of about 250 representative urban income classes is analyzed. The sample contains large and small cities with significant variation across resources, along with cities which tax and cities that subsidize particular fuels. As a consequence the analysis will be able to determine the impact of these important variables on the process of interfuel substitution. For instance, in the analysis kerosene subsidizing countries can be compared to those who do not subsidize it (or those who tax it). In addition, we will analyze fuel choice and quantities used within countries to determine the influence of income, family size, and other charactristics on fuel choice and use in selected developing countries. Ub Interfuel Subsdtion Page 7 RV. An Overvew of Urban Residental Ener,gy Use 4.1 Te overall results of the study indicate that govenment policy in many countries plays an important role in influencing the fuels that households will choose for satsfying their needs for energy in their homes. in the first section, the overall pans of fuel use for 11 developing countries are presented. The 11 countries are from Asia, Latin America, and Africa, representing wide diversity of geographical features and economic development. In the second section, the effect of government policy will be presented by exining national egates of fuel profiles of consumption and prices. After this, we examine the effect of urban size on energy consumpdon. Firlly, we will examine the differences in energy use between different income classes. Overall Patterns of UJrbaw Energy Demand 4.2 The most striking finding when examining the average energy consumption for the 11 countries is the relatively even distribudon of energy use between the various fuels. Of course, the overall pattern of energy demand for 11 developin; countries is a relatively abstract figure in that it does not capture tf:h regional varation i fuel use, but nevertheless it gives a picture of the Idnds of fuels being consumed in developing countries. To make the comparisons between cities more representative, the figures presented in this paper are weighted by city rather than the population in the cities. As expected, wood fuels comprise a significant percentage of urban household fuel consumption, with firewood and charcoal accounting for over 40 percent of total co (see figure 1). Ihis is especially true for the cities in Africa, where both wood ad charcoal are consumed in significant quantities, but it is also true for Haiti, a poor Caribben country. Surprisingly, kerosene is not used for household purposes as much as might be expected, accounting for only one-tenth of total residental energ consumpdon. Coal that is specific to China comnrises about one- tenth of total consumption. Finaly, the highest value fuels LPG and electricity together accounts for about one-third of total consumption. 4.3 Expenditures on fuels present quite a different picture compared to consumption (see figure 2). Expenditue on wood fuels shrink to less than one-third of total expenditures of fuel, whie expenditures on the high quality fuels of LPG and electricity increase to just less than two-tbis. This iS an indication that urban households place higher value on electricity and LPG, and higher income families will purchase these fuels if they are avaflable to them. Also, many of the households that use wood collect at of it, and this brings down their cash expenditue on this fuei. Based on energy contet eletricty is the highest priced fuel followed by LPG. However, LPG is very price competitive wit the other fuels typically used by middle income households, including kerosene and charcoal. As will be explained later in the paper, the poor spend a gar percentage of their income on energy, but purchase less and lower quality energy tan more wealthy households. Urban Intrfuel Substitution Page 8 Figure 1 Average Household Fuel Consumption In Urban Areas of 11 Developing Countries cow (t&8al LfPe (15.4%)-' LKeose (95.%) Figure 2 Average Household Fuel Expenditures In Urban Areas of 11 Developing Countries Coal (1.0%) Firwood (9.9%) Ehdicy (45.3%) -t _ rr 1,,,, js(7.1%) -L1 (17.6%) Urban Intemfl Subsdution Page 9 Energy Policies and Urban Fuel Use 4.4 The patterns of urban fuel use do little to explain some of the individual country variation in fuel consumption. It is evident from our preliminary analysis that govenment polirS- I;as a significant role to play in the fuels that people chose for use in urban househel1% !. nce most govemment policies that affect fuel-including whether modern fuels a ''-,d or subsidized--are decisions taken at the country level, in this section urban rit. u :e at the national aggregate is exanined. 4.5 The subsidy or tax of modem fuels does appear to be a major factor in their adoption by households in developing countries. The three countdes with significant subsidies in our sample include Chmna, Zambia, and Indonesia. There are se;ral intresting points to make about the countries that subsidize a major fuel. The first is that the subsidies do appear to encourage consumption of that fuel. For instance, coal in China is the lowest price fuel for all the developing countries in our study. As is evident from figure 3, coal accounts for a significant proportion of total energy use for the 5 towns and cities in our study. The reason that the energy use is so high for China is that heating is necessary in some of the towns in our sample, and coal is highly subsidized, so it is used very freely. Interestingly, wood is a major fuel in Xiushui, China, a region where fuelwood is available from the surrounding countryside and coal is not available in large quantities because the town is located between mountain ranges and is somewh*t diffilcult to reach by road. Likewise, in Indonesia the effect of the government policy to make, kerosene available both to assist poor households and to prevent deforestation seems to be effective, in those most people in Indonesia use kerosene for cooking. In fact, of the 11 countries in the study, Indonesia is the only country in which people use kerosene in a major way for cooldng. However, the policy also has the effect of keeping higher middle class families from switching to the higher value fuels of LPG or electricity. 4.6 The countries that have a more market-oriented policy environment demonstrate a greater mi of fuels in use in urban households than those that either tax modemn fuels or subsidize a major fuel. These findings even hold true after controlling for income across countries. Although these countres are somewhat weighted towards the more wealthy countries, most of these countries have policies to price fuels at their international value and to make the fuels available for use in the country. The most notable case is Cape Verde, a small Afdcan island nation. In Cape Verde the mix of fuel use is quite evident, with extensive electricity, LPG, and kerosene being used by urban households (see Figure 3). The prices of these fuels in Cape Verde are not subsidized and reflect their maret value, and as a consequence people in the country spend a very high proportion of their income on modern fuels. Uzban iNd1 Subsido. Page 10 TABLE I The RelatiOnhip Between Govelnment Polcy and Urban Household Enera ConSUption, Cholce and Prices In Developind Countrie 1988 Brwy Use ad Pdce by Monhy Firewod Charo Coal Kerosene IRI Electicity Poic Type cme USS OWWg4*o00W 21.80 2.61 3.38 5.19 2.30 0.46 1.24 Subddy 77.98 1.25 0.63 0.00 0.73 3.06 2.94 Market 41.85 3.13 5.78 0.00 0.43 0.83 1.43 Tuaxed Ejy Choice(%) 21.80 26.10 43.60 29.70 57.10 19.80 82.50 Subsidy 77.98 19.60 27.20 0.00 27.70 81.30 90.00 Marbkt 41.85 39.40 66.20 0.00 64A0 27.20 50.40 EnoxyP,ice(USS^KgoE) 21.80 0.14 0.17 0.03 0.24 0.26 0.48 Subsidy 77.98 0.34 0.64 . 0.39 0.40 1.25 Market 41.85 0.30 0.40 . 0.55 0.85 2.24 Taxed UslEnl y Price(US$SAE) 21.80 0.97 0.77 0.11 0.69 0.40 * 0.56 Subsidy 77.98 2.42 2.92 . 1.11 0.61 1.47 Market 41.85 2.13 1.83 . 1.58 1.31 2.63 Taed wMidl JuooneGrouwsOnl ([JS$ 2040) 1[gOFECapuW onth) 26.32 1.34 2.45 6.01 2.73 0.84 1.26 Subsidy 28.94 1.78 0.94 0.00 0.83 2.11 1A3 Malrtt 29.03 4.97 4.77 0.00 0.42 0.70 0.42 Taxed agy Choie (%) 26.32 12.90 29.10 35.80 53.90 30.80 86.50 Subsidy 28.94 35.30 36.50 0.00 42.60 66.70 90.20 Marbt 29.03 60.90 48.60 0.00 64.20 24.40 35.20 Taxed Bnery PAkN(US$Ig4OE) 26.32 0.13 0.21 0.03 0.23 0.26 0.51 Subidy 28.94 0.33 0.56 . 0.35 0.35 1.05 Mardkt 29.03 0.37 0.45 . 0.58 0.94 2.51 Taxd UsmI Enegy Pic (USn44OB 26.32 0.91 0.95 0.10 0.67 0.39 0.60 Subsidy 28.94 2.36 2.56 . 1.01 0.54 1.24 Market 29.03 2.62 2.05 . 1.66 1.45 2.95 Taoe Source: ESMAP Brgy Sudies. Urbanteruel Substitution Page 11 Figure 3 Government Policy And Fuel Consumption In Urban Areas of 11 Developing Countries Cod Is sIdbscd in chins Kerosene Is sublid in IndoesI Hal has lox an Pekrolen Products o-o l* FuS. ubs . YeErws yPckyg. T.Yu dModFmsus.s i ~ ~ j~ Make Enrg Po/iy EJ Wood M OjChUTOOBCoSI 1 - /KeosIn LPG3 Ehctro 4.7 The countries with taxes on petroleum products are among the poorest countries in the study. Burldna Faso, Mauritaia, and Haiti all have taxes on kerosene or LPG, and as indicated in figure 3, people are discouraged from using these fuels. For all three of these poor countries, people are using mainly wood or charcoal for their residential energy needs. To be fair, this may be a reflection of the level of income of the cities in these countries, but certainly the tax and foreign exchange constraints associated with importing petroleum products contribute to the fuel mix in these countries. However, preliminary analyses controlling for income also tend to confirm these patens. 4.8 The final point about the countries that subsidize a major fuel is that the price of other fuels in these countries is lower than in the other countries in the study. As indicated in table 1, the subsidy of a major fuel seems to pull down the prce of Urban Intrfuel Substitution Page 12 alternative fuels. As a consequence, a major subsidy does not just affect the fuel being subsidized, but rather can lead to distortions in the market prices of other fuels as well, including the price of wood fuels. This means that policy makers should be aware that fuel subsidies should not only be viewed as having a singular impact on particular fuels, but will have a more widespread effect in the fuel economy. The Effect of Urban Size on Fuel Use 4.9 The size of the urban areas is expectedto haveaneffectonboth the price that people have to pay for a fuel and its availability for the local population; One reason that city size has such effects is that smaller cites often are in more remote areas that require transport of modem fuels. Consequently, higher transport costs may cause the price of modern fuels to be higher. In addidon, smaler cities also obviously have smaller markets, so that the distributors of modern fuels may not be as interested in targeting them for sales. The lack of fuel alternatives in the market place may influence the other prices in the marketplace. Another factor is that biomass often is more readily available around the boundaries of smaller cities. The combination of sheer size and the volume of demand for wood fuels around larger cities makes the local collection problematic for poor urban residents. As a consequence they end up purchasing charcoal, kerosene, or coal for cooking and other end uses. 4.10 The expectation was that with an increase in city size, people would have less access to wood fuels around the cities. As a consequence, their use of wood fuels would decrease. Contrary to this expectaton, for cities up to 1 million people, the use of wood fuels is fairly extensive and does not decrease (see figure 4). Although it appears that energy use is declining with CitY "ze, this is somewhat misleading because of the extensive use of coal in the small to.ns and cities from China in the study. Nevertheless, once cities reach a population of I million and above, their populations switch from using biomass fuels to modern fuels, including LPG, electricity, and limited amounts of charcoal. The large cities in the study include Manila, La Paz, Bangkok, Port au Prince, and four cities in Indonesia, where very litde charcoal and virtually no fuelwood is used for cooking. Partally because of the use of LPG and electricity in smaller cities in countries like Cape Verde and Zambia, the amount of these fuels used in the smaller cities is somewhat larger than expected. This is consistent with findings not reported here that useful energy for cooldng does not appear to be dependent on city size. 4.11 The income that is spent on fuel is not significanty dependent on city size. The average share of income spent on fuel is about 12 percent, and it is slightly lower for cities above 1 million. The implication is that both city size and the mix of the fuels within different cities have very litle to do with percentage of income spent on a fuel for urban households. Rather, as will be evident in the next section, the imotant factors affeetin£ income expenditures on fuel include the level and distribution of income ithin icties. The important finding is that although the sheer size of the city does affect what fuels househ lds will adopt, it seems to have very litde to do with the amount of money people wil, spend on those fuels. 4.12 The size of the city is somewhat correlated with the price of different fuels (see table 2). As might be expected, the price of electricity, kerosene, and LPG declines Urban Interfuel Substitution Page 13 with city size, while the price of wood fuels remains almost constant. It is clearly part of the reason people in smaller towns and cities do not use as much modern fuels as that in the lager urban areas is because the prices they pay for the fuels are somewhat higher than in the largest cities, especially those above 1 nmillion people, and incomes in such towns are generally lower. A surprising finding is that the price of wood fuels is higher in the smaller cities. This is probably because some of the smaller urban areas in the sample, including Mauritania and Yemen, have very litde biomass around them. In a later analysis, we will be able to examine the impact of biomass supply around cities on residential fuel use patterns. As indicated above, the reasons that the price of the fuels is higher in smaller cities in part can be explained by the higher distribution costs for electricity and the higher transportation costs of LPG and kerosene. TABLE 2 The Relationship Between City Size and Urban Household Energy Consumption Choice and Prices In Developing Countries, 1988 city Size City Size Monthly Fiwood Charcoal Coal Kerosene LPG lecicity COOO) nOUme USS Eqy Town 33.89 38.19 3.82 3.33 3.85 0.21 1.70 1.41 Smau City 102.54 41.38 2.19 2.15 3.11 0.62 2.12 1.59 Midl city 526.98 35.74 3.41 3.08 0.00 1A0 0.60 1.27 Lap city 3718.13 55.82 0.24 1.24 0.00 3.35 1.68 2.82 Enrg Choice (%) Town 33.89 38.19 52.50 40.00 16.80 33.60 46.50 64.10 Small City 102.54 41.38 25.10 36.10 21.10 37.20 60A0 78A0 Middl Ciy 526.98 35.74 47.90 53.30 0.00 64.50 23.00 69.50 Larg Cit 3718.13 55.82 4.30 28.00 0.00 61.30 37.30 95.40 EngyPNc Town 33.89 38.19 0.27 0.29 0.03 0.45 0.53 1.64 Small city 102.54 41.38 0.26 0.57 0.03 0.40 0.48 1.23 Mide city 526.98 35.74 0.27 0.38 . 0.34 0.51 1.15 Large City 3718.13 55.82 0.22 0.29 . 0.24 0.36 0.78 Use Energy Pce (US$lBOBE) Town 33.89 38.19 1.92 1.33 0.09 1.28 0.81 1.93 Smal Clty 102.54 41.38 1.82 2.60 0.12 1.14 0.74 1.45 Midle City 526.98 35.74 1.95 1.73 . 0.98 0.79 1.35 Lar City 3718.13 55.82 1.58 1.32 . 0.69 0.55 0.92 Sowu ESMAP Energy Stues. Urn hnte1l Subsiuion Page 14 Urban Income, Equity, and Fuel Use 4.13 As might be expected, urban incomes have among the strongest influences on urban interfuel substitution. This factor has been documented in just about all surveys that have been conducted for urban household energy use in developing countries. Most previous studies have been for single countries with a single policy environment. As a consequence, it is sometimes difficult to determdne at what point on the income ladder people will switch between fuels. In this section, we present a first atempt at trying to sort out the effect of income on urban interfuel substitution. Figure 4 City Size and Household Fuel Consumption In 11 Developing Countnes <80 800200 2001000O >t000 City Stze '000 Ml F'iaw C cowl COW KewmnP LE LP Urban Inerfuel Substion Page 1S 4.14 Income is strongly related to the type of energy use and to expenditures on fuels, but it is not related to the total quantity of energy use. The reason is simple. As households move up the income ladder, they move from wood and charcoal to modern fuels such as electricity and LPG. Both wood and charcoal have lower efficiencies than either LPG or electricity. Even though people with higher incomes use about the same amaount of energy as those in the lower income groups, they obtain more useful energy from it. Thus, as households gain more income, they switch to higher value fuels. In fact, the percvnt of people using LPG for cooking increases from about 10 percent in the lowest income groups to just less than 80 percent in the highest income groups. From the analysis we can estimate that the income threshold point at which people begin to switch to LPG is roughly 25 dollars per person per month, while the point at which they switch to electricity is much lower at about 5-10 dollars per capita per month. There is a very high penetration rate for electricity even in the lowest income classes, where six out of ten of the households use electricity, but the poor use very small quantities of it. The correlation between the quantity of electrcity used and income is much stronger than the correlation with the quantities of LPG consumed, which is probably caused in part by the different ways in which the fuels are used. There are capital costs paid for by consumers involved in cooldng with LPG, including stoves, botdes, and bulk purchases. By contrast, most electricity companies do not charge large connection fees, so initial electicity consumption involves mainly household lighting in very small quantities. 4.15 Wood fuels are used in low income households, but they continue to be used even ih very high income households. This would tend to contradict what many would predict based on income alone. Also, the higher income household that is still using wood fuels for cooling and other uses are not just in Africa. In addition to African cities in countries like Burkina Faso, Mauritania, and Zambia, high income households use wood fuels in Port au Prince, Haiti, Trinidad, Bolivia, Cagayan, Philippines, and even Chiengmai, Thailand. It is obvious that income and price alone may not be enough to explain why people continue to use wood fuels in urban areas in developing countries. The explanation for the continued use may lie in other factors, such as access to local wood supplies around cities, the use of charcoal as a special cooling fuel for gdlling, and distorted market access to modern fuels. These facts will be explored in a more in-depth fashion later in the project. 4.16 The poorest households in the poorest countries spend a high proportion of their income on household fuels, and the fuels that they purchase are mainly wood fuels. About 75 percent of total expenditures for energy in low income households are on wood fuels, including fuelwood and charcoal (see table 3). Except in some of the countries that subsidize intermediate fuels such as coal or kerosene, the price of wood and charcoal in the poor countries is fairly expensive. For instance, the price of wood and charcoal in urban markets in Burkina Faso, where a high percentage of income is spent on purchasing fuels, is almost as expensive as kerosene or LPG. In Maurtania, where charcoal is used extensively for cooldng the price of charcoal and wood is above the price of kerosene or LPG on a useful energy basis. As indicated before, petroleum products are taxed in Mauritania. From the analysis, the conclusion to be drawn is that those who are the poorest spend a significant proportion of their income on fuels, and these fuels tend to be mainly wood fuels along with a small but significant amount of modem fuels. Urban IneRfuel Subsgtiuon Page 16 TABLE 3 The Relatonsip Between Income Chlm and Urban Household Energy Consumption, Choice, Prices and Energy Expenditure In Develon' a Countries, 1988 lnom Cim Montly Prwood Charoal Coal Kerosene L Electicity Total (Per Capita Inome US$ Eneg Consumption (KgOWtapitsMonth) Low 8.59 3.63 3.28 2.38 1.33 0.15 0.60 11.59 Mik-Low 15.51 2.57 2.66 3.21 1.73 0.42 0.82 11.59 MIdle 25.02 2.10 2.20 2.83 1.50 1.25 1.15 11.15 Md-EGgh 41.94 2.62 2.54 0.67 1.14 2.09 1.77 10.82 High 116.95 1.66 1.79 0.00 0.60 3.70 4.15 11.62 Egy choice () Low 8.59 55.00 54.30 14.70 67.90 10.20 61.40 NA MidLow 15.51 38.70 44.00 17.00 62.80 22.40 70.10 NA Middle 25.02 31.50 36.60 15.50 52.20 43.70 76.90 NA Mid-High 41.94 26.10 37.30 4.70 40.70 59.80 79.30 NA High 116.95 15.90 29.30 0.00 19.60 76.70 92.3a NA Energ Price LOw 8.59 0.21 0.27 0.03 0.35 0.52 1.15 NA Mi-Low 15.51 0.22 0.29 0.03 0.34 0.49 1.18 NA Middle 25.02 0.25 0.41 0.03 0.35 0.45 1.15 NA Mid-High 41.94 0.31 0.51 0.03 0.39 0.48 1.34 NA High 116.95 0.29 0.55 . 0.39 0.44 1.23 NA Usefl EneVg Pri (USSCgOE) low 8.59 1.50 1.21 0.11 1.01 0.80 1.36 NA M-ow 15.51 1.54 1.32 0.11 0.97 0.76 1.38 NA Mide 25.02 1.81 1.87 0.10 0.99 0.70 1.36 NA Mid-High 41.94 2.21 2.33 0.11 1.12 0.73 1.57 NA High 116.95 2.09 2.50 . 1.11 0.68 1.45 NA % Expendir on Fuel of Eae Exendtue Low 8.59 20.45 30.82 7.77 19.23 3.27 18.46 100 Mid-Low 15.51 12.76 21.01 9.4 19.92 8.91 28.01 100 Middl 25.02 8.68 17.13 6.97 13.49 18.83 34.88 100 Mid-Eligh 41.94 6.83 17.48 2.01 9.35 23.78 40.54 100 Hligh 116.95 3.45 9.44 3.7 24.49 58.94 100 * Eng Expendite of Total Income low 8.59 4.67 6.15 0.69 3.11 0.67 2.93 17.92 Mid-ow 15.51 2.23 3.15 0.57 2.09 1.07 3.13 11.98 Middle 2S.02 1.63 2.01 0.29 1.28 1.83 3.18 9.92 Mid-High 41.94 1.06 1.75 0.06 0.72 1.92 3.29 8.66 High 116.95 0.38 0.69 0.18 1.37 3.25 5.74 3Mrc ESMAP Ener Studi's. Note: NA Stands for not alcable Urban Interfuel Subsdtution Page 17 4.17 The affordability of the different fuels is reflected in the percentage of income spent on fuel by different income groups. The lower income groups spend approximately one-fifth of their monthly income on fueL while the higher income groups spend just over one-twentieth of their income on fuel. The pattern of total fuel expenditures is equally revealing. The poor purchase mainly traditional fuel, while the more wealthy households purchase higher quality fuels such as LPG and electricity. It is interesting that the percentage of income spent on electricity is about three percent of total income, regardless of income class. In terms of total expenditures, the poor spend less on their fuels, but because their incomes are low, it represents a higher proportion of their income compared to more wealthy families. Thus, the paradox of fuel expenditures is that those least able to afford it pay a higher proportion of their income on lower quality fuels, while those who spend a smaller proportion of tieir income on energy purchase the high quality fuels. his is probably because the poor have no cash to pay for the appliances that are necessary to take advantage of miodem fuels. 4.18 Income obviously is an importent factor in fuel choice and use in dveloping countries. It is apparent that the highest value fuels of electricity and LPG is most highly correlated with income. As household income rises, the use of these fuels increases along with a corresponding drop in the other fuels. However, the negative relationship between income and wood fuels use is not as clear as the very predictable incmreasing use of LPG and electricity as incomes rise. As a consequence, we must look to other factors to explain declining wood use as a household fuel in developing countries, including access to wood around cities and government policies. Urban Interfuel Subsdtution Page 18 Figure 5 Urban Income And Fuel Consumption In 11 Developing Countries I T 0. IA FUkdd b Noh Income Class 0Fwood Chaco§ Coa Kwsm E LPG Ebdky Figure 6 Urban Income And Fuel Expenditures In 11 Developing Countries Income Class E3f F*Iw M |WM * Kwc M9 LM- Urban Interfuel Subsiuton Page 19 V. Conclusion 5.1 The limited understanding about the nature of the energy transition hinder efforts to formulate policy concerning the most effective and economic strategy for providing energy for households in urban areas. Understanding the energy transition will help provide a framework for understanding the policy choices for urban areas. At what stages do the externalities cause by significant harvesting of wood around urban areas justify intervention to encourage households to switch to other fuels? From a least-cost perspective including environmental externalities, how do wood fuels compare to alternative fuels in the energy transition? Is there any evidence that low wood prices cause excessive and harmful harvesting of wood around urban areas? Do wood prices rse gradually in urban areas or do they suddenly shoot up causing problems for markets? Is there a role for government policy to direct the pace of the transition between fuels? Without a good understanding of the forces that drive interfuel substitution, we cannot answer many of these very important policy questions. The impact of government policy on fuel choice -'nd use is difficult to ascertain through the traditional cross-sectional urban study, since urban policies do not vary much within countries. 5.2 The findings in this paper are a beginning attempt to start to answer some of these fundamental policy questions. From the preliminary evidence we can say the government policy plays a very important role in influencing households to choose one fuel over another. Secondly, policies to promote LPG for households with incomes that are less than about 25 dollars per capita per month are likely to lead to disappointnent. Apparently electricity can be promrroted at much lower levels income because of the high vuale urban households have for lighting, although this will require substantial capital costs by the electrcity industry. In developing countries, wood fuels do not disappear completely as incomes rise since many high income households still use wood, reflecting the utility of these fuels for urban hAouseholds. However, they do seem to disappear from urban households in large metropolitan areas over 1 million population, where wood apparently is very hard to obtain. The urban poor are probably affected most by urban fuel policies, since they are spcnding a significant proportion of their incomes on energy. Obviously, there is much more work to be completed before we fully understand the dynamic patterns affecting urban interfuel substitution in developing countries. However, this paper is a beginning attempt to understand the dynamics of fuel markets, fuel use, and the transition to modem fuels in urban areas of developing countries. Urban Intorfuel Subsdtution Page 20 REFERENCES Alam, M., J. Dunkerley, K.N. Gopi, W. Ramsay, and E. Davis., 1985a. 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Urban Intfuel Subsdtudon Page 25 Appendix A Sample Chntriatres aof th 43 Urban Areas In the Study Income/ Population Rnegy Fue C5onsumption Per Capita in KgOB per Monh Person Expenses S/Month Thousands Pern Wood Charcoal Kersene Coal LPG Electric Total Bolivia 68.33 379 6.48 1.59 0.00 0.47 0.00 4.61 4.00 10.79 LaPaz 78.52 1017 5.69 0.17 0.00 0.99 0.00 4.63 5.06 10.91 Quillacoo .59.11 36 7.33 2.66 0.00 0.03 0.00 5.12 2.88 10.95 Oruro 42.90 190 7.93 0.38 0.00 0.57 0.00 5.19 3.04 9.08 Tarija 70.27 74 6.30 2.62 0.00 0.07 0.00 5.30 4.30 12.45 Trinidad 76.34 49 6.24 3.19 0.00 0.22 0.00 3.30 3.50 10.38 Haiti PotsauPrmo 65.08 1000 16.97 0.00 8.23 0.51 0.00 1.12 2.54 12.57 Yanen 87.89 348 11.46 2.42 0.76 0.79 0.00 2.71 0.91 7.78 SaMa 118.86 472 10.92 2.56 0.59 0.18 0.00 3.19 1.23 7.88 Taz 48.47 161 13.79 2.60 0.82 0.69 0.00 2.70 0.45 7.48 Hbideda 41.21 182 11.16 1.95 1.13 2.38 0.00 1.53 0.44 7.73 indonesa 24.45 4274 9.81 0.72 0.28 6.07 0.00 0.37 1.04 8.51 Jakrta 27.15 7976 8.78 0.13 0.08 6.73 0.00 0.47 1.25 8.67 Bandum 26.40 2308 9.94 0.26 0.17 6.04 0.00 0.44 1.04 7.98 Sutabaya 22.26 2226 10.00 0.17 0.10 6.73 0.00 0.18 0.84 8.11 Semarse 17.12 1068 13.84 0.93 O.1S 4.85 0.00 0.77 0.94 7.63 Surakarta 15.11 688 12.03 2.75 0.71 3.87 0.00 0.27 0.80 8.44 Yogyakt 27.88 645 9.78 2.37 1.05 4.75 0.00 0.23 0.87 9.35 Pbilippines 60.10 6651 8.21 0.65 0.54 0.98 0.00 1.39 3.26 6.92 Musila 67.86 8150 7.87 0.24 0.32 0.93 0.00 1.61 3.79 6.92 Bacolod 37.12 360 10.07 2.73 3.36 1.33 0.00 0.56 1.27 10.14 Cabu City 32.02 674 9.78 1.51 2.01 0.94 0.00 0.58 0.92 6.03 Cagayan 27.45 312 9.84 2.57 0.11 1.16 0.00 0.37 1.55 6.31 Davao 20.24 839 9.57 2.80 0.44 1.28 0.00 0.51 0.98 6.20 Thailand 117.50 3006 7.53 0.24 1.68 0.00 0.00 3.56 5.43 10.82 Bangwko 142.21 6000 8.36 0.03 0.89 0.00 0;O0 4.23 7.07 11.79 Ciaegma 102.09 150 6.20 0.58 3.44 0.01 0.00 2.72 4.04 10.96 Ayuthqy 84.45 40 6.87 0.29 1.40 0.01 0.00 3.14 3.45 8.62 CapeVerde 56.05 S5 16.57 1.33 0.15 1.39 0.00 3.00 1.09 7.03 'al 65.46 59 13.52 1.30 0.22 0.54 0.00 3.12 1.12 6.33 Mlndelo 43.09 50 21.06 1.37 - 0.05 2.57 0.00 2.84 1.06 8.00 Maurtnib a 25.34 382 24.40 0.50 8.43 0.21 0.00 1.23 0.32 10.83 Noaskeholt 42.57 60 22.19 0.00 5.17 0.09 0.00 2.83 0.52 8.84 Ater 33.57 35 22.00 0.00 7.62 0.43 0.00 2.05 0.30 12.45 K_& 15.77 12 16.06 1.88 6.65 0.26 0.00 0.07 0.22 9.57 Kiffa 20.21 20 12.08 2.17 12.07 0.43 0.00 0.08 0.00 15.95 Nouakchott 24.44 550 27.46 0.23 8.62 0.16 0.00 1.26 0.36 10.45 Buridna Paso 35.12 369 12.51 8.87 0.68 0.57 0.00 0.14 . 10.48 Ousgadougo 38.71 473 13.61 8.84 0.75 0.62 0.00 0.18 . 10.60 Bobo Dioulaso 30A2 247 10.00 8.90 0.68 0.53 0.00 0.07 . 1OAS KoudoWu 22.40 55 13.42 8.71 0.35 0.39 0.00 0.02 . 9.61 Ouahigouya 29.74 41 9.84 9A7 0.04 0.49 0.00 0.00 . 10.10 Zunbia 23.04 324 16.31 4.05 9.42 0.82 0.00 0.00 2.07 16A8 Lauk 28.89 704 14.70 1.51 10.75 1.35 0.00 0.00 1.80 15.62 Ktwoe 27.72 360 15.70 4.18 7.92 0.62 0.00 0.00 2.95 15.73 Luansh 16.89 149 18.60 3.34 9.17 0.74 0.00 0.00 2.24 15A3 Livingston 18.93 81 16.82 7.37 9.79 0.57 0.00 0.00 1.32 19.19 China 17.92 60 8.05 3.04 0.44 0.01 15.56 1.00 0.61 21.16 Xiushul 9.32 40 14.11 13.14 2.17 0.02 2.64 0.23 0.34 19.24 Kao, 15.19 32 8.50 1.60 0.00 0.00 32.04 1.29 0.60 36.86 Jrnasg 16.08 50 7.23 0.33 0.01 0.01 14.53 0.06 0.67 15.79 Chanhu 26.30 120 3.88 0.02 0.00 0.00 11.87 1.87 0.69 14.46 HMntal 22.67 55 6.65 0.10 0.00 0.00 17.09 1.57 0.79 19.43 Avergae 41.82 879 . 11.78 2.51 2.49 1.26 1.82 1.53 1.72 11A1 Sourc: ESMAP Egy Suveys. Not The figue beside the countries are the average for all households in the urban household en survey. The aveage aoss all of the counties Is he average for all of the cities In the stdy. world Bank Industry and Energy Dertment ENERGY SERIES PAPERS No. 1 Energy Issues in the Developing World, February 1988. No. 2 Review of World Bank Lending for Electric Power, March 1988. No. 3 Some Considerations in Collecting Data on Household Energy Consumption, March 1988. No. 4 Improving Power System Efficiency in the Developing Countries through Performance Contracting, May 1988. No. 5 Impact of Lower Oil Prices on Renewable Energy Technologies, May 1988. No. 6 A Comparison of Lamps for Domestic Lighting in Developing Countries, June 1988. No. 7 Recent World Bank Activities in Energy (revised October 1989). No. 8 A Visual Overview of the World Oil Markets, July 1988. No. 9 Current Intemational Gas Trades and Prices, November 1988. No. 10 Promoting Investment for Natural Gas Exploration and Production in Developing Countries, January 1989. No. 11 Technology Survey Report on Electric Power Systems, February 1989. No. 12 Recent Developments in the U.S. Power Sector and Their Relevance for the Developing Countries, February 1989. No. 13 Domestic Energy Pricing Policies, April 1989. No. 14 Financing of the Energy Sector in Developing Countries, April 1989. No. 15 The Future Role of Hydropower in Developing Countries, April 1989. No. 16 Fuelwood Stumpage: Considerations for Developing Country Energy Planning, June 1989. No. 17 Incorporating Risk and Uncertainty in Power System Planning, June 1989. No. 18 Review and Evaluation of Historic Electicity Forecasting Experience, (1960- 1985), June 1989. No. 19 Woodfuel Supply and Environmental Management, July 1989. No. 20 The Malawi Charcoal Project - Experience and Lessons, January 1990. No. 21 Capital Expenditures for Electric Power in the Developing Countries in the 1990s, February 1990. No. 22 A Review of Regulation of the Power Sectors in Developing Countres, February 1990. No. 23 Summary Data Sheets of 1987 Power and Commercial Energy Stadstics for 100 Developing Countries, March 1990. No. 24 A Review of the Treatment of Environmental Aspects of Bank Energy Proects, March 1990. No. 25 The Status of Liquified Naturl Gas Worldwide, March 1990. No. 26 Population Growth, Wood Fuels, and Resource Problems in Sub-Saharan Africa, March 1990. No. 27 The Status of Nuclear Power Technology - An Update, April 1990. No. 28 Decommissioning of Nuclear Power Facilities, April 1990. No. 29 Interfuel Substitution and Changes in the Way Households Use Energy: The Case of Cooking and Lighting Behavior in Urban Java, October 1990. No. 30 Regulation, Dereguaion, or Reregulation-What is Needed in LDCs Power Sector? July 1990. No. 31 Understnding the Costs and Schedules of World Bank Supported Hydroelectric Projects, July 1990. No. 32 Review of Elecicity Tariffis in Developing Countres During the 1980s, November 1990. No. 33 Private Sector Pardcipation in Power through BOOT Schemes, December 1990. No. 34 Identing the Basic Conditions for Economic Generation of Public Elecity fo Surplus Bagasse in Sugar Mills, April 1991. No. 35 Prospects for Gas-Fueled Combined-Cycle Power Generation in the Developing Countries, May 1991. No. 36 Radioactive Waste Managument - A Background Study, June 1991. No. 37 A Study of the Transfer of Petroleum Fuels Pollution, July 1991. No. 38 Inproving Charcoaling Efficiency in the Traditional Rural Secr, July 1991. No. 39 Decision Making Under Uncertainty - An Option Valuation Aprach to Power Planning, August 1991. No. 40 Summary 1988 Power Data Sheets for 100 Developing Countries, August 1991. No. 41 Health and Safety Aspects of Nuclear Power Plants, August 1991. No. 42 A Review of Inteional Power Sales Agreements, August 1991. No. 43 Guideline for Diesel Generating Plant Specification and Bid Evaluation, September 1991. No. 44 A Methodology for Regional Assessment of Small Scale Hydro Power, September 1991. No. 45 Guidelines for Assessing Wind Energy PotentiaL September 1991. No. 46 Core Report of the Electric Power Utility Efficiency Improvement Study, September 1991. No. 47 Kerosene Stoves: Their Performance, Use, and Constraints, October 1991. No. 48 Assessment of Bicmass Energy Resources: A Discussion on its Need and Methodology, December 1991. No. 49 Accounting forlTaditional Fuel Production: the Household-Energy Sector and Its Implications for the Development Process, March 1992. No. 50 Energy Issues in Central and Eastern Europe: Considtions for the World Bank Group and Odter Fnancial Institutions, March 1992. No. 51 002 Emissions by the Resdential Sector Environmental Implications of llnter- fuel Substitution, March 1992. No. 52 Electricity Pricing: Conventional Views and New Concepts, March 1992. No. 53 Urban Interfuel Substitution, Energy Use, and Equity in Developing Countries: Some Prelininaiy Results. For copies, please call (202) 473-3616, fax (202) 47740560, or write to: Energy Series Papers IENED World Bank 1818 H St NW Washington, DC 20433 USA INDUSTMY SERIES PAPERS No. 1 Japanese `rect Foreign. Investment: Patterns and Implications for Developing Countries, Februay 1989. No. 2 Emerging Patterns of International Competition in Selected Industrial Product Groups, February 1989. No. 3 Changing Firm Boundaries: Analysis of Technology-Sharing Alliances, February 1989. No. 4 Technological Advance and Organizational Innovation in the Engineering Industry, March 1989. No. S Export Catalyst in Low-Income Countries, November 1989. No. 6 Overview of Japanese Industrial Technology Development, March 1989. No. 7 Reform of Ownership and Control Mechanisms in Hungary and China, April 1989. No. 8 The Computer Industry in Industrialized Economies: Lessons for the Newly Industrializing, February 1989. No. 9 Institutions and Dynamic Comparative Advantage Electronics Industiy in South Korea and Taiwan, June 1989. No. 10 New Environments for Intellectual Property, June 1989. No. 11 Managing Entiy Into International Markets: Lessons From the East Asian Experience, June 1989. No. 12 Impact of Technological Change on Industrial Prospects for the LDCs, June 1989. No. 13 The Protection of Intellectual Property Rights and Industnal Technology Development in Brazil, September 1989. No. 14 Regional Integration and Economic Development, November 1989. No. 15 Specialization, Technical Change and Competitiveness in the Brazilian Electronics Industry, November 1989. INDUSTRY SERIES PAPERS cont'd No. 16 Small Trading Companies and a Successful Export Response: Lessons From Hong Kong, December 1989. No. 17 Flowers: Global Subsector Study, December 1989. No. 18 The Shrimp Industry: Global Subsector Study, December 1989. No. 19 Garments: Global Subsector Study, December 1989. No. 20 World Bank Lending for Small and Medium Enterprises: Fifteen Years of Experience, December 1989. No. 21 Reputation in Manufactured Goods Trade, December 1989. No. 22 Foreign Direct Investment From the Newly Industrialzed Economies, December 1989. -No. 23 Buyer-Seller Lns for Export Development, March 1990. No. 24 Technology Strategy & Policy for Industrial Competitiveness: A Case Study of Thailand, February 1990. No. 25 Investment, Productivity and Comparative Advantage, April 1990. No. 26 Cost Reduction, Product Development and the Real Exchange Rate, April 1990. No. 27 Overcoming Policy Endogeneity: Strategic Role for Domestic Competiuon in Industrial Policy Reform, April 1990. No. 28 Conditionality in Adjustment Lending FY8O-89: The ALCID Database, May 1990. No. 29 International Competitiveness: Determinants and Indicators, March 1990. No. 30 FY89 Sector Review Industry, Trade and Finance, November 1989. No. 31 The Design of Adjustment Lending for Industiy Review of Current Practice, June 1990. INDUSThY SERIES PAPERS cont'd No. 32 National Systems Supporting Technical Advance in Industry: The Brazilian Experience, June 26, 1990. No. 33 Ghana's Small Enterprise Sector: Survey of Adjustment Response and Constraints, June 1990. No. 34 Footwear: Global Subsector Study, June 1990. No. 35 Tightening the Soft Budget Constraint in Reforming Socialist Economies, May 1990. No. 36 Free Trade Zones in Export Strategies, December 1990. No. 37 Electronics Development Strategy: The Role of Government, June 1990 No. 38 Export Finance in the Philippines: Opportunities and Constraints for Developing Country Suppliers, June 1990. No. 39 The U.S. Automotive Aftermarket: Opportunities and Constraints for Developing Country Suppliers, June 1990 No. 40 Investment As A Determinant of Industrial Competitiveness and Comparative Advantage: Evidence from Six Countries, August 1990 (not yet published) No. 41 Adjustment and Constrained Response: Malawi at the Threshold of Sustained Growth, October 1990. No. 42 Export Finance - Issues and Directions Case Study of the Philippines, December 1990 No. 43 The Basics of Antitrust Policy: A Review of Ten Nations and the EEC, February 1991. No. 44 Technology Strategy in the Economy of Taiwan: Exploiting Foregin Linkages and Investing in Local Capability, January 1991 No. 45 The Impact of Adjustment Lending on Industry in African Countries, June 1991. No. 46 Bankdng Automation and Productivity Change: The Brazilian Experience, July 1991. No. 47 Global Trends in Textile Technology and Trade, December 1991. No. 48 Are There Dynamic Extemalities from Direct Foreign Investment? Evidence for Morocco, December 1991. No. 49 Do Fims with Foreign Equity Recover Faster From Financial Distress? The Case of Colombia, December 1991 No. 50 Intermational Competition in the Bicycle Industry: Keeping Pace with Tethnological Change, December 1991. No. 51 International Competition in the Footwear Industry: Keeping Pace with Technological Cbange, December 1991. No. 52 International Trends in Steel Mini-Mills: Keeping Pace with Technological Change, December 1991. No. 53 International Competition in Printed Circuit Board Assembly: Keeping Pace with Technological Change, December 1991. No. 54 Efficiency, Corporate Indebtedness and Directed Credit in Colombia, December 1991. For extra copies of these papers please contact Miss Wendy Young on extension 33618, Room S-4101