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Bio-Based Energy, Rural Livelihoods and Energy Security in Ethiopia


Dawit Guta

This study explores issues of biomass energy use in relation to household welfare and it assesses Ethiopia’s future energy security with a focus on long-term model of the energy sector, and institutional arrangements required for decentralized energy initiatives. Data from Ethiopian rural households reveal negative welfare effects associated with traditional biomass energy utilization, while increases in the opportunity cost of fuelwood collection is associated negatively with allocation of labour to agriculture and fuelwood use. It appears that investment on integrated energy source diversification improves sustainability and resilience, but increases production cost. Innovations that improve alternative sources reduce production cost, improve energy security, and thus serve as an engine of economic growth.
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Chapter Two: Household bio-based energy utilization and energy mix behaviour, and related linkages with food security and welfare effects


Chapter Two

Household bio-based energy utilization and energy mix behaviour, and related linkages with food security and welfare effects

2.1.    Introduction

Lack of access to clean energy is a major driver of widespread extreme poverty in Sub-Saharan Africa. Ethiopia is one of the few remaining countries in the world where the majority of the population continues to be reliant on traditional solid biomass energy use (IEA, 2013). Economically deprived rural households have few energy options. The vast majority of households use fuelwood as their main energy source in combination with agricultural fuels such as crop residues and cattle dung in areas where fuelwood is scarce. This component of the study examined the linkages among fuelwood scarcity, household energy substitution, and household livelihoods.

Reliance on solid bio-based energy resources is often linked to poverty, the lack of modern energy alternatives, and a web of other factors. Modern fuels are often used alongside traditional biomass fuels, but have failed to displace solid biomass energy in many developing countries, which supports the ‘fuel stacking’ concept (Heltberg, 2005; Mekonnen and Köhlin, 2008; Guta, 2012a). These studies found that access to modern energy options assocated with improved household welfare. However, there are not any published research findings on the linkages between biomass scarcity or changes in the shadow opportunity costs and household welfare, which can be reflected in changes in household resource allocation, energy expenditures, fuel choice, energy use, and energy substitution.

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