Complex markets and fragile ecologies
Saturday, 7 July 2007
William Wallis
LAST December the government of Senegal slashed its long-standing subsidy on cooking gas under pressure from a growing budget deficit and from foreign donors called in to plug the gap.
The subsidy was originally put in place under pressure from some of the same donor agencies to promote the use of cooking gas and reduce pressure on the country's limited supply of wood fuel.
But with world energy prices soaring, it was costing the state as much as $200m a year. A proportion of this was benefiting traders who smuggle the subsidised gas to countries where prices are higher.
Nevertheless, according to Abdoulaye Diop, Senegal's finance minister, there was anecdotal evidence of an immediate increase in demand for wood fuel when the higher gas prices kicked in. This underlined, he argued in a recent interview with the FT, just how sensitive millions of poor Senegalese households are to such price swings.
These can set off a chain of market reactions and ultimately ecological consequences, posing a complex policy dilemma as poor countries such as Senegal seek to balance their budgets while also preserve their fragile environments.
"I have given instructions to put money back into gas subsidies," the minister said. "We have to react very quickly to preserve the [ecological] gains we have made for 25 years."
In its 2006 yearbook, the International Energy Agency estimates that up to 2.5bn people in developing countries rely on biomes such as fuel wood, charcoal, agricultural waste and animal dung to meet their needs for cooking. In the absence of new policies, the agency believes, this number will increase to 2.7bn by 2030.
The use of biomes as a fuel in itself is not necessarily harmful. However, the IEA argues that, "when resources are harvested unsustainably and energy conversion technologies are inefficient, there are serious and adverse consequences for health, the environment and economic development".
The environmental consequences vary from state to health spreads across the board. An estimated 1.3m people die prematurely each year as a result of respiratory diseases contracted due to indoor air pollution.
The IEA suggests two complimentary approaches to the situation: "Promoting more efficient and sustainable use of traditional biomes; and encouraging people to switch to modern cooking fuels and technologies".
As Senegal's example illustrates, however, putting such policies into practice can be vexed. It can also be complicated by the shifting prescriptions of foreign donors and non-governmental organisations (NGOs). Moreover, the science surrounding the use of biomes fuels is often itself inexact.
For more than a century there have been grim predictions of a day when available wood in African countries that form the fringe of the Sahara desert would be outstripped by demand. These theories however are almost as controversial at a local level as theories of peaking oil production are around the globe. Jesse Ribot, a senior associate at the World Resources Institute in Washington and an expert on West African charcoal markets, says the first predictions of a wood fuel crisis in the Sahel were in the early 20th century. The horizon for that crisis has been shifting ahead ever since.
"In 1970 they were saying it would come in 2000. In 1990 they said 2020. It's always a 30 year horizon," Mr Ribot says.
This inaccuracy is part the result of flaws in the models used for prediction; it is also due to insufficient knowledge of local tree species and their capacity for regeneration, Mr Rib argues, based on research he has carried out over 20 years in Senegal.
Predictions of looming crises, he adds, have often been used by urban elites and development organisations alike to win control over forestry and land management from rural populations often at great expense to the later. He says: "The thinking goes: 'We must protect the forest from people like you so that people like us will have business to do'."
To muddy the picture further Masse Lo, an expert at the Senegal-based NGOs Enda, disputes the government line that recent gas price increases led to a significant uptake in charcoal use. A bigger factor has been the rupture in gas supplies due to financial difficulties at the state distribution company, he says.
But he adds that charcoal burning is contributing to deforestation, and a shift in the charcoal industry from the north of the country -- where forests have been depleted -- to the south, is evidence this is the case.
The industrialised world is beginning to wrestle with a distant future without oil and a present in which climate change has made reduced use of fossil fuels an imperative. Developing countries, too, have worries such as the complexities of markets - for instance, that of charcoal - and their impact, real or otherwise, or fragile ecologies too.
........................................
FT Syndication Service
LAST December the government of Senegal slashed its long-standing subsidy on cooking gas under pressure from a growing budget deficit and from foreign donors called in to plug the gap.
The subsidy was originally put in place under pressure from some of the same donor agencies to promote the use of cooking gas and reduce pressure on the country's limited supply of wood fuel.
But with world energy prices soaring, it was costing the state as much as $200m a year. A proportion of this was benefiting traders who smuggle the subsidised gas to countries where prices are higher.
Nevertheless, according to Abdoulaye Diop, Senegal's finance minister, there was anecdotal evidence of an immediate increase in demand for wood fuel when the higher gas prices kicked in. This underlined, he argued in a recent interview with the FT, just how sensitive millions of poor Senegalese households are to such price swings.
These can set off a chain of market reactions and ultimately ecological consequences, posing a complex policy dilemma as poor countries such as Senegal seek to balance their budgets while also preserve their fragile environments.
"I have given instructions to put money back into gas subsidies," the minister said. "We have to react very quickly to preserve the [ecological] gains we have made for 25 years."
In its 2006 yearbook, the International Energy Agency estimates that up to 2.5bn people in developing countries rely on biomes such as fuel wood, charcoal, agricultural waste and animal dung to meet their needs for cooking. In the absence of new policies, the agency believes, this number will increase to 2.7bn by 2030.
The use of biomes as a fuel in itself is not necessarily harmful. However, the IEA argues that, "when resources are harvested unsustainably and energy conversion technologies are inefficient, there are serious and adverse consequences for health, the environment and economic development".
The environmental consequences vary from state to health spreads across the board. An estimated 1.3m people die prematurely each year as a result of respiratory diseases contracted due to indoor air pollution.
The IEA suggests two complimentary approaches to the situation: "Promoting more efficient and sustainable use of traditional biomes; and encouraging people to switch to modern cooking fuels and technologies".
As Senegal's example illustrates, however, putting such policies into practice can be vexed. It can also be complicated by the shifting prescriptions of foreign donors and non-governmental organisations (NGOs). Moreover, the science surrounding the use of biomes fuels is often itself inexact.
For more than a century there have been grim predictions of a day when available wood in African countries that form the fringe of the Sahara desert would be outstripped by demand. These theories however are almost as controversial at a local level as theories of peaking oil production are around the globe. Jesse Ribot, a senior associate at the World Resources Institute in Washington and an expert on West African charcoal markets, says the first predictions of a wood fuel crisis in the Sahel were in the early 20th century. The horizon for that crisis has been shifting ahead ever since.
"In 1970 they were saying it would come in 2000. In 1990 they said 2020. It's always a 30 year horizon," Mr Ribot says.
This inaccuracy is part the result of flaws in the models used for prediction; it is also due to insufficient knowledge of local tree species and their capacity for regeneration, Mr Rib argues, based on research he has carried out over 20 years in Senegal.
Predictions of looming crises, he adds, have often been used by urban elites and development organisations alike to win control over forestry and land management from rural populations often at great expense to the later. He says: "The thinking goes: 'We must protect the forest from people like you so that people like us will have business to do'."
To muddy the picture further Masse Lo, an expert at the Senegal-based NGOs Enda, disputes the government line that recent gas price increases led to a significant uptake in charcoal use. A bigger factor has been the rupture in gas supplies due to financial difficulties at the state distribution company, he says.
But he adds that charcoal burning is contributing to deforestation, and a shift in the charcoal industry from the north of the country -- where forests have been depleted -- to the south, is evidence this is the case.
The industrialised world is beginning to wrestle with a distant future without oil and a present in which climate change has made reduced use of fossil fuels an imperative. Developing countries, too, have worries such as the complexities of markets - for instance, that of charcoal - and their impact, real or otherwise, or fragile ecologies too.
........................................
FT Syndication Service