Douglas F. Barnes

Welfare Impacts of Rural Electrification: A Panel Data Analysis from Vietnam

Most past studies on the development impact of rural electrification have relied on cross-sectional surveys comparing households with and without electricity. This study tests the validity of the perceived correlation between welfare outcomes and rural electrification and quantifies electricity’s benefits on the basis of sound econometric techniques that control for endogeneity bias. The study used panel surveys conducted in rural Vietnam in 2002 and 2005, covering some 1,120 households in 41 communes; by 2005, all surveyed communes had connected to the grid, and four-fifths of their households had a connection. The econometric estimations suggest grid electrification’s positive effects on both household income and expenditure and education. We find differential returns to electricity for commune- and household-level connection: the former generates externality benefiting the poor more than the rich, farm more than nonfarm income, and girls over boys for schooling outcome; conversely, the latter benefits the rich more than the poor, nonfarm more than farm income, and boys over girls for schooling outcome. We recommend further study on rural electrification’s long-term benefits for the overall rural economy.

Restoring Balance : Bangladesh's Rural Energy Realities

Bangladesh is one of the worlds poorest countries. Nearly 80 percent of the nations 140 million people reside in rural areas; of these, 20 percent live in extreme poverty. Geographically, many low-lying areas are vulnerable to severe flooding, while other regions are prone to drought, erosion, and soil salinity. Such an unfavorable agricultural landscape, combined with mismanagement of natural resources and increasing population pressure, is pushing many of the rural poor to the brink. Because Bangladesh is such a poor country, it also is one of the worlds lowest energy producers. Total annual energy supply is only about 150 liters of oil equivalent per capita (International Energy Agency, or IEA 2003); in rural areas, conditions are even worse. Compared to other developing countries, Bangladesh uses little modern energy. Despite its successful rural electrification program, close to two-thirds of households remain without electricity and, with the exception of kerosene, commercial fuels are beyond reach for many. Moreover, biomass fuels are becoming increasingly scarce. Collected mainly from the local environment as recently as two decades ago, bio-fuels are fast becoming a marketed commodity as access to local biomass continues to shrink. This study, the first to concentrate on Bangladeshs energy systems and their effects on the lives of rural people, drew on these background studies, as well as other World Bank-financed research on indoor air pollution (IAP) and rural infrastructure, to present a rural energy strategy for the country. Much of this studys analytical underpinning was based on several background studies. This study also reanalyzed data from earlier research to better understand the benefits of modern energy use for rural households, farm activities, and small businesses.

Who benefits most from rural electrification ? evidence in India

This paper applies an econometric analysis to estimate the average and distribution benefits of rural electrification using rich household survey data from India. The results support that rural electrification helps to reduce time allocated to fuelwood collection by household members and increases time allocated to studying by boys and girls. Rural electrification also increases the labor supply of men and women, schooling of boys and girls, and household per capita income and expenditure. Electrification also helps reduce poverty. But the larger share of benefits accrues to wealthier rural households, with poorer ones having more limited use of electricity. The analysis also shows that restricted supply of electricity, due to frequent power outages, negatively affects both household electricity connection and its consumption, thereby reducing the expected benefits of rural electrification.

Environmental health and traditional fuel use in Guatemala

Recognition of the problem of indoor air pollution (IAP) and its deleterious effects of health is growing worldwide as efforts increase to understand and articulate the complex health-air pollution linkages. Recent WHO estimates indicate that indoor smoke for solid fuels causes 1.6 million deaths annually and accounts for 2.7 percent of the global burden of disease. In Guatemala, adverse health impacts of IAP disproportionately affect children in poor, rural households of which 97 percent use fuelwood as the dominant cooking fuel. Based on data from two recent household surveys and the results of worldwide IAP health studies, this book examines the relationship between fuel use and health in Guatemala. The main purpose of the book is to draw attention to a major problem by highlighting the effects of IAP on the health of children in rural households in Guatemala and to identify appropriate options to mitigate those effects.

Modernizing energy services for the poor : a World Bank investment review - fiscal 2000-08

The term energy access has various connotations to energy development specialists. For this review, we define energy access as relating both to physical proximity to energy infrastructure and to the policies and frameworks supporting the transition to better, reliable, and more efficient use of electricity and modern fuels. This viewpoint frames energy access as a development process sometimes referred to as the energy transition that starts with reliance on low-quality energy sources (straw, dung, candles) and finishes when high-quality energy sources, such as commercial fuels or electricity, are available. Access to these higher-quality energy sources allow for services (lighting, communication, cooling, pumping), which are not available at lower rungs of the energy ladder. This report focuses on the World Banks portfolio of energy access-related projects approved during most of the past decade (FY2000-08). The objectives of the review were to compile an up-to-date data base on energy access-related assistance commitments and review current trends and patterns of energy access-related assistance. The authors also wanted to examine to the greatest extent possible the lessons that could be learned across regions, focusing on policy and project design recommendations. Finally, it was important to establish a solid methodology for measuring energy access in order to provide a baseline for future reviews of the investment portfolio. This study focuses on the World Banks role in energy access investments for the period between fiscal years 2000 and 2008. Developing and transition countries face huge investments in energy access in order to meet their commitments to achieving the Millennium Development Goals (MDGs).

Energy Access, Efficiency, and Poverty: How Many Households are Energy Poor in Bangladesh?

Access to energy, especially modern sources, is a key to any development initiative. Based on cross-section data from a 2004 survey of some 2,300 households in rural Bangladesh, this paper studies the welfare impacts of household energy use, including that of modern energy, and estimates the household minimum energy requirement that could be used as a basis for an energy poverty line. The paper finds that although the use of both traditional (biomass energy burned in conventional stoves) and modern (electricity and kerosene) sources improves household consumption and income, the return on modern sources is 20 to 25 times higher than that on traditional sources. In addition, after comparing alternate measures of the energy poverty line, the paper finds that some 58 percent of rural households in Bangladesh are energy poor, compared with 45 percent that are income poor. The findings suggest that growth in electrification and adoption of efficient cooking stoves for biomass use can lower energy poverty in a climate-friendly way by reducing carbon dioxide emissions. Reducing energy poverty helps reduce income poverty as well.

Energy Poverty in Rural and Urban India : Are the Energy Poor Also Income Poor?

Energy poverty is a frequently used term among energy specialists, but unfortunately the concept is rather loosely defined. Several existing approaches measure energy poverty by defining an energy poverty line as the minimum quantity of physical energy needed to perform such basic tasks as cooking and lighting. This paper proposes an alternative measure that is based on energy demand. The energy poverty line is defined as the threshold point at which energy consumption begins to rise with increases in household income. This approach was applied to cross-sectional data from a comprehensive 2005 household survey representative of both urban and rural India. The findings suggest that in rural areas some 57 percent of households are energy poor, versus 22 percent that are income poor. For urban areas the energy poverty rate is 28 percent compared with 20 percent that are income poor. Policies to reduce energy poverty would include support for rural electrification, the promotion of more modern cooking fuels, and encouraging greater adoption of improved biomass stoves. A combination of these programs would play a significant role in reducing energy poverty in rural India.

Connection charges and electricity access in Sub-Saharan Africa

Sub-Saharan Africa trails other regions in providing access to electricity for poor urban and rural residents. This poor performance can be linked to various factors, including political interference in utility policy, higher investment costs and lower profitability of extending service to rural areas. But a major obstacle to wider access is the high charges consumers must pay to connect to the electricity network. The connection charges in Sub-Saharan Africa are among the highest in the world, which has resulted in low rates of electrification in many countries. This paper reviews ways to improve electrification rates by addressing the issue of high connection charges. Essential to the success of such efforts is concurrent political commitment to identify, examine, and implement various low-cost electrification approaches and financing solutions as part of a broad plan to improve access. Electricity companies can lower their connection-related costs, and thus consumer charges, by using a variety of low-cost technologies and materials in distribution networks and household connections; making bulk purchases of materials; and adjusting technical standards to reflect the lower loads of households that use a minimum amount of electricity. Strategies for lowering connection charges may also include spreading charges over a reasonable period, rolling them into monthly service payments, subsidizing connections, or amortizing them through loans. Lowering connection charges is not the only step, but it is an essential part of any strategy for addressing the electricity access gap between rich and poor households in Sub-Saharan Africa, a gap that denies millions of poor Africans the benefits of electricity.