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The demand, selection, and health impacts of household energy in Pakistan

Globally, almost four million people die prematurely annually due to indoor air pollution (IAP), and millions are facing serious diseases. These adverse health impacts place a great burden on national health budgets, increase medical expenditures, and reduce the overall productivity of the economy. Worryingly, almost three billion people still depend upon solid fuels such as firewood, biomass, crop residues, animal dung, and coal, which are the major contributors to IAP. This thesis investigates the causal relationship between solid fuel consumption and both child mortality and life expectancy, the price and non-price determinants of solid fuel use (using Pakistan as a case study), and finally uses cost-benefit analysis (CBA) to evaluate alternative policies. Specifically, the thesis includes four empirical studies related to solid fuel use and IAP. In the first study, panel data covering 101 countries over the period 2000-2012 were used to examine the causal impacts of solid fuel use on health outcomes. Utilizing an instrumental variables approach, it was concluded that solid fuel combustion causes increases in child mortality and decreases in male and female life expectancy. The second study investigated the factors associated with the selection of solid and cleaner fuels by households. Using data from the Pakistan Social and Living Standards Measurement (PSLM) Survey 2013-14, the study identified that agricultural occupation, large family size, and having cattle, were associated with solid fuel consumption. In contrast, higher income, higher education, and living in an urban area were factors associated with cleaner fuel consumption. However, the study concluded that income growth alone will not be sufficient to ensure that households switch to cleaner fuel use, particularly households in rural areas. Hence, the results challenge the practical aspects of countries moving along the Environmental Kuznets Curve, and suggest that in order to reduce IAP, direct policy intervention will be required. The third study further explores household energy use by estimating the own and cross-price elasticities of household energy sources in Pakistan. For this, three PSLM data sets (2007-08, 2011-12, and 2013-14) were pooled and a Linear Approximate Almost Ideal Demand System model was estimated. The study found that cleaner fuels (natural gas, and liquefied petroleum gas (LPG)) were more price elastic than solid fuels, implying that lowering the prices of these cleaner fuels would lead many households to adopt them. In the final study, a CBA of several policy options for encouraging reductions in solid fuel use was undertaken. The study evaluated five major policy options: (1) natural gas; (2) LPG; (3) electric stoves; (4) biogas plants; and (5) improved cook stoves. The World Health Organization’s guidelines for CBA were followed and it was found that encouraging LPG adoption has the highest benefit-cost ratio (BCR) of 3.68, while improved cook stoves had a BCR of 0.58. Encouraging natural gas adoption, electric stoves, and biogas plants have BCRs of 2.87, 2.22, and 1.39 respectively. The study concluded that, in order to mitigate the negative impacts of IAP, Pakistan should encourage cleaner energy sources in preference to adoption of alternative cooking appliances.
Type of thesis
Irfan, M. (2019). The demand, selection, and health impacts of household energy in Pakistan (Thesis, Doctor of Philosophy (PhD)). The University of Waikato, Hamilton, New Zealand. Retrieved from https://hdl.handle.net/10289/12556
The University of Waikato
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