Cooking with Modern Energy in Rural Households of India: A Cost–Benefit Analysis

Krittika Roy

doi:10.37773/ees.v7i1.998

Authors

Krittika Roy Senior Research Fellow, Indian Statistical Institute https://orcid.org/0000-0002-1327-3863

DOI:

https://doi.org/10.37773/ees.v7i1.998

Keywords:

LPG, Electricity, Cost-Benefit Analysis, Energy, Policy, Social, Cooking

Abstract

Between 2016 and 2019, there has been an improvement in the percentage of rural households using clean cooking energy, partly owing to government interventions. However, unclean solid fuels are still the primary source of energy for cooking purposes for about 60% of rural households. One of the foremost reasons for this is the cost of acquiring and using clean energy sources. This paper estimates the cost incurred by a household when switching from solid fuels to liquefied petroleum gas (LPG) or electricity for cooking, followed by a social cost–benefit analysis of two interventions: universal provision of LPG to all rural households and universal provision of electricity to all rural households. The findings suggest that electricity is a cheaper alternative to LPG at the household level; however, investing in the universal provision of LPG is socially beneficial for the government. Universal provision of electricity for cooking can only become socially beneficial if the proportion of renewable electricity increases, reducing the environmental costs of carbon emissions from coal-based power plants.

Keywords: LPG, electricity, cost, benefit, social, energy

Downloads

Download data is not yet available.

Metrics

Metrics Loading ...

References

Anggono, Tri, Iyung Ruslan, Chrisnawan Anditya, Dian Galuh Cendrawati, and Muhammad Indra al Irsyad. 2022. “Assessing the Feasibility of Migration Policy from LPG Stoves to Induction Stoves in Indonesia.” IOP Conference Series: Earth and Environmental Science 1041: 012039. https://doi.org/10.1088/1755-1315/1041/1/012039

Banerjee, Manjushree, Rakesh Prasad, Ibrahim H Rehman, and Bigsna Gill. 2016. “Induction Stoves as an Option for Clean Cooking in Rural India.” Energy Policy 88, 159¬–167. https://doi.org/10.1016/j.enpol.2015.10.021

Bruce, Nigel G. Kristin Aunan, Eva A Rehfuess. 2017. “Liquefied Petroleum Gas as a Clean Cooking Fuel for Developing Countries: Implications for Climate, Forests, and Affordability.” Materials on Development Financing 7. Frankfurt, Germany: KfW Entwick Lungs Bank.

CAG. 2014. “Compensating States that Maintain Forests at the Expense of Their Own Development: Valuation of Forests in India.” Comptroller and Auditor General of India. https://iced.cag.gov.in/wp-content/uploads/Valuation-of-forests-in-India.pdf

Cheng, Chao-yo, and Johannes Urpelainen. 2014. “Fuel Stacking in India: Changes in the Cooking and Lighting Mix, 1987–2010.” Energy 76: 306–317. https://doi.org/10.1016/j.energy.2014.08.023

Crookes, Douglas, and Martin de Wit. 2002. “Environmental Economic Valuation and Its Application in Environmental Assessment: An Evaluation of the Status Quo with Reference to South Africa.” Impact Assessment and Project Appraisal 20 (2): 127–134. https://doi.org/10.3152/147154602781766753.

Dabadge, Ashwini, Ashok Sreenivas, and Ann Josey. 2018. “What Has the Pradhan Mantri Ujjwala Yojana Achieved So Far?” Economic & Political Weekly 53: 69–75.

Dasgupta, Partha. 1972. “A Comparative Analysis of the UNIDO Guidelines and the OECD Manual.” Bulletin of the Oxford University Institute of Economics and Statistics 34 (1): 33–51. https://doi.org/10.1111/j.1468-0084.1972.mp34001003.x

Eckstein, Otto. 1958. Water-resource Development: The Economics of Project Evaluation. Cambridge: Harvard University Press.

EPA. 2023. “Overview of Greenhouse Gases.” United States Environmental protection Agency. https://www.epa.gov/ghgemissions/overview-greenhouse-gases.

Farsi, Mehdi, Massimo Filippini, and Shonali Pachauri. 2007. “Fuel Choices in Urban Indian Households.” Environment and Development Economics 12 (6): 757–774. http://www.jstor.org/stable/44379432.

Fleurbaey, Marc, and Sivan Kartha. 2014. “Sustainable Development and Equity.” In Climate Change 2014: Mitigation of Climate Change. IPCC Working Group III Contribution to AR5. Cambridge: Cambridge University Press.

García-Frapolli, Eduardo, Astrid Schilmann, Victor Berrueta, Horacio Riojas-Rodríguez, Rufus Edwards, Michael Johnson, Alejandro Sangines, Cynthia Armendariz-Arnez, and Omar Masera. 2010. “Beyond Fuelwood Savings: Valuing the Economic Benefits of Introducing Improved Biomass Cookstoves in the Purépecha Region of Mexico.” Ecological Economics 69 (12): 2598–2605. https://doi.org/10.1016/j.ecolecon.2010.08.004

Gill-Wiehl, Annelise, Timothy Brown, and Kirk Smith. 2022. “The Need to Prioritize Consumption: A Difference-in-differences Approach to Analyze the Total Effect of India’s Below-the-poverty-line Policies on LPG Use.” Energy Policy 164 (112915): https://doi.org/10.1016/j.enpol.2022.112915.

GOI. 2023. National Health Accounts: Estimates for India 2019–20. https://main.mohfw.gov.in/sites/default/files/5NHA_19-20_dt%2019%20April%202023_web_version_1.pdf.

———. 2021. All-India Electricity Statistics: General Review 2021. New Delhi: Central Electricity Authority, Ministry of Power, Government of India.

———. 2020a. Indian PNG Statistics, 2019–20. New Delhi: Ministry of Petroleum and Natural Gas, Government of India.

———. 2020b. Time Use Survey, 2019. New Delhi: National Sample Survey Organisation, Government of India.

Goldemberg, Jose, Javier Martinez-Gomez, Ambuj Sagar, and Kirk R Smith. 2018. “Household Air Pollution, Health, and Climate Change: Cleaning the Air.” Environmental Research Letters 13 (3): 030201. https://doi.org/10.1088/1748-9326/aaa49d.

Gould Carlos F, Samuel B Schlesinger, Emilio Molina, M Lorena Bejarano, Alfredo Valarezo, and Darby W Jack. 2020. “Household Fuel Mixes in Peri-urban and Rural Ecuador: Explaining the Context of LPG, Patterns of Continued Firewood Use, and the Challenges of Induction Cooking.” Energy Policy 136: 11053. https://doi.org/10.1016/j.enpol.2019.111053.

Gould, Carlos, and Johannes Urpelainen. 2018. “LPG as a Clean Cooking Fuel: Adoption, Use, and Impact in Rural India.” Energy Policy 122: 395–408. https://doi.org/10.1016/j.enpol.2018.07.042

Gupta, S, and N H Ravindranath. 1997. “Financial Analysis of Cooking Energy Options for India.” Energy Conversion and Management 38 (18): 1869–1876. https://doi.org/10.1016/S0196-8904(96)00111-2.

Hakam, Dikri Firmansyah, Herry Nugraha, Agung Wicaksono, Raden Aswin Rahadi, and Satria Putra Kanugrahan. 2022. “Mega Conversion from LPG to Induction Stove to Achieve Indonesia’s Clean Energy Transition.” Energy Strategy Reviews 41: 100856. https://doi.org/10.1016/j.esr.2022.100856.

Haselip, James Arthur, and Morgan Rivoal. 2017. “The True Cost of Using Traditional Fuels in a Humanitarian Setting. Case Study of the Nyarugusu Refugee Camp, Kigoma Region Tanzania.” UNEP DTU Partnership Working Paper Series 2017 Vol. 3. Denmark: UNEP DTU Partnership, Technical University of Denmark.

Hutton, Guy, Eva Rehfuess, and Fabriozio Tediosi. 2007. “Evaluation of the Costs and Benefits of Interventions to Reduce Indoor Air Pollution.” Energy for Sustainable Development 11 (4): 34–43. https://doi.org/10.1016/S0973-0826(08)60408-1

Hutton, Guy, Eva Rehfuess, and WHO. 2006. Guidelines for Conducting Cost-benefit Analysis of Household Energy and Health Interventions. Geneva: World Health Organization.

IIPS. 2017. National Family Health Survey-4 India Report, 2015–16. Mumbai: International Institute for Population Sciences.

———. 2022. National Family Health Survey-5 India Report, 2019–21. Mumbai: International Institute for Population Sciences.

Irfan, Muhammad, Michael P Cameron, and Gazi Hassan. 2021. “Interventions to Mitigate Indoor Air Pollution: A Cost-benefit Analysis.” PLOS ONE 16 (9): e0257543. https://doi.org/10.1371/journal.pone.0257543.

Isihak, Salisu R, Uduak Akpan, and Monsuru Adeleye. 2012. “Interventions for Mitigating Indoor Air Pollution in Nigeria: A Cost-benefit Analysis.” International Journal Energy Sector Management 6 (3): 417–429. https://doi.org/10.1108/17506221211259655

Jain, Abhishek, Poulami Choudhury, and Karthik Ganesan. 2015. Clean, Affordable, and Sustainable Cooking Energy for India: Possibilities and Realities beyond LPG. New Delhi: Council on Energy, Environment and Water. https://www.ceew.in/publications/clean-affordable-and-sustainable-cooking-energy-india-0.

Jain, Abhishek. 2022. “Domestic Electricity LT Tariff Slabs and Rates for All States in India in 2023.” September 19, Bijli Bachao! https://www.bijlibachao.com/news/domestic-electricity-lt-tariff-slabs-and-rates-for-all-states-in-india-in.html

Jeuland, Marc A, and Subhrendu K Pattanayak. 2012. “Benefits and Costs of Improved Cookstoves: Assessing the Implications of Variability in Health, Forest and Climate Impacts.” PLOS ONE 7 (2): e30338. https://doi.org/10.1371/journal.pone.0030338.

Jing, Liang, Hassan M El-Houjeiri, Jean Christophe Monfort, Adam R Brandt, Mohammad S Masnadi, Deborah Gordon, and Joule A Bergerson. 2020. “Carbon Intensity of Global Crude Oil Refining and Mitigation Potential.” Nature Climate Change 10: 526–532. https://doi.org/10.1038/s41558-020-0775-3.

Kar, Abhishek, and Hisham Zerriffi. 2018. “From Cookstove Acquisition to Cooking Transition: Framing the Behavioural Aspects of Cookstove Interventions."

Energy Research & Social Science 42: 23–33. https://doi.org/10.1016/j.erss.2018.02.015.

Krutilla, John V, and Otto Eckstein. 1958. Multiple Purpose River Development. Baltimore: Johns Hopkins Press. https://doi.org/10.1097/00010694-195809000-00018

Kula, Erhun. 2004. “Estimation of a Social Rate of Interest for India.” Journal of Agricultural Economics 55 (1): 91–99. https://doi.org/10.1111/j.1477-9552.2004.tb00081.x.

Kumar, Praveen, Robert Ethan Dover, Antoina Díaz-Valdés Iriarte, Smitha Rao, Romina Garakani, Sophia Hadingham, Amar Dhand, et al. (2020). “Affordability, Accessibility, and Awareness in the Adoption of Liquefied Petroleum Gas: A Case-Control Study in Rural India.” Sustainability 12(11): 4790. MDPI AG. Retrieved from http://dx.doi.org/10.3390/su12114790

Larsen, Bjorn, Maxwell Dalaba, and Brad Wong. 2020. Increasing the Use of Improved Cookstoves and Clean Cooking Fuel in Ghana: A Cost-benefit Analysis of Three Interventions. Copenhagen: Copenhagen Consensus Center.

Lewis, Jessica J, and Subhrendu K Pattanayak. 2012. “Who Adopts Improved Fuels and Cookstoves? A Systematic Review.” Environmental Health Perspectives 120 (5): 637–645. https://doi.org/10.1289/ehp.1104194

Little, I M D, and James A Mirrlees. 1974. Project Appraisal and Planning for Developing Countries. London: Heinemann Educational Books.

———. 1968. OECD Manual of Industrial Project Analysis in Developing Countries, Vol. II: Social Cost Benefit Analysis. Paris: Organisation for Economic Co-operation and Development.

Maass, Arthur. 1966. “Benefit-cost Analysis: Its Relevance to Public Investment Decisions.” The Quarterly Journal of Economics 80 (2): 208–226. https://doi.org/10.2307/1880690

Malla, Bikram, Nigel Bruce, Elizabeth Bates, and Eva Rehfuess. 2011. “Applying Global Cost-benefit Analysis Methods to Indoor Air Pollution Mitigation Interventions in Nepal, Kenya and Sudan: Insights and Challenges.” Energy Policy 39 (11): 7518–7529. https://doi.org/10.1016/j.enpol.2011.06.031

Marglin, Stephen A. 1967. Public Investment Criteria (Routledge Revivals): Benefit-cost Analysis for Planned Economic Growth. London: Routledge.

Masera, Omar, Barbara D Saatkamp, and Daniel Kammen. 2000. “From Linear Fuel Switching to Multiple Cooking Strategies: A Critique and Alternative to the Energy Ladder Model.” World Development 28 (12): 2083–2103. https://doi.org/10.1016/S0305-750X(00)00076-0

Meerding, Willem J, Gouke J Bonsel, Werner B F Brouwer, Marja C Stuifbergen, and Marie-Louise Essink-Bot. 2010. “Social Time Preferences for Health and Money Elicited with a Choice Experiment.” Value in Health 13: 368–374. https://doi.org/10.1111/j.1524-4733.2009.00681.x.

Mittal, Moti, Chhemendra Sharma, and Richa Singh. 2012. “Estimates of Emissions from Coal Fired Thermal Power Plants in India.” Presented at the 20th Emission Inventory Conference, August 12–13, 2012, Tampa, Florida.

Musgrave, Richard A. 1969. “Cost-benefit Analysis and the Theory of Public Finance.” Journal of Economic Literature 7 (3): 797–806.

O’Sullivan, K, Douglas Barnes (2006). “Energy Policies and Multitopic Household Surveys Guidelines for Questionnaire Design in Living Standards Measurement Studies.” World Bank Working Paper No. 90. Geneva: World Bank. https://doi.org/10.1596/978-0-8213-6878-7

Ochalek, Jessica, James Lomas, and Karl Claxton. 2018. “Estimating Health Opportunity Costs in Low-income and Middle-income Countries: A Novel Approach and Evidence from Cross-country Data.” BMJ Global Health 3. https://doi.org/10.1136/bmjgh-2018-000964

Pandey, Anamika, Michael Brauer, Maureen L Cropper, Kalpana Balakrishnan, Prashant Mathur, Sagnik Dey, Burak Turkgulu, et al. 2020. “Health and Economic Impact of Air Pollution in the States of India: The Global Burden of Disease Study 2019.” Lancet Planet Health 5 (1): E25–E38. https://doi.org/10.1016/ S2542-5196(20)30298-9

Pandey, Vijay Laxmi, and Aditi Chaubal. 2011. “Comprehending Household Cooking Energy Choice in Rural India.” Biomass Bioenergy 35: 4724–31. https://doi.org/10.1016/j.biombioe.2011.09.020.

Patel, Sameer, Anish Khandelwal, Anna Leavey, and Pratim Biswas. 2016. “A Model for Cost-benefit Analysis of Cooking Fuel Alternatives from a Rural Indian Household Perspective.” Renewable and Sustainable Energy Reviews 56: 291¬–302. https://doi.org/10.1016/j.rser.2015.11.047.

Pearce, David. 1998. “Cost-benefit Analysis and Environmental Policy.” Oxford Review of Economic Policy 14 (4): 84–100. https://doi.org/10.1093/oxrep/14.4.84

Pope, Daniel, Nigel Bruce, Mukesh Dherani, Kirstie Jagoe, and Eva Rehfuess. 2017. “Real-life Effectiveness of ‘Improved’ Stoves and Clean Fuels in Reducing PM2.5 and CO: Systematic Review and Meta-analysis.” Environment International 101: 7–18. https://doi.org/10.1016/j.envint.2017.01.012.

Poulos, Christine, and Dale Whittington. 1999. “Individuals’ Rates of Time Preference for Life-saving Programs in Developing Countries: Results from a Multi-country Study.” EEPSEA Special and Technical Paper sp199901t2. Ho Chí Minh: Economy and Environment Program for Southeast Asia.

Quah, Euston, and Khye Chong Tan. 1999. “Cost Benefit Analysis with Uncertain Cash Flow and Project Life.” Journal of Public Economic Theory 1: 393–398. https://doi.org/10.1111/1097-3923.00018.

Reddy, Sudhakara, and A K Vaidya Marg. 2004. “Economic and Social Dimensions of Household Energy Use: A Case Study of India.” In Proceedings of IV Biennial International Workshop “Advances in Energy Studies”, edited by E Ortega and S Ulgiati. Campinas, Brazil: UNICAMP.

Ricke, Katherine, Laurent Drouet, Ken Caldeira, and Massimo Tavoni. 2018. “Country-level Social Cost of Carbon.” Nature Climate Change 8: 895–900. https://doi.org/10.1038/s41558-018-0282-y.

Rubinstein, Fernando, Bertrand Hugo Mbatchou Ngahane, Mattias Nilsson, Miranda Baame Esong, Emmanuel Betang, André Pascal Goura, Vimbai Chapungu, Dan Pope, and Elisa Puzzolo. 2022. “Adoption of Electricity for Clean Cooking in Cameroon: A Mixed-methods Field Evaluation of Current Cooking Practices and Scale-up Potential.” Energy for Sustainable Development 71: 118–131. https://doi.org/10.1016/j.esd.2022.09.010.

Sharma, Vikesh, and Madhusmita Dash. 2022. “Household Energy Use Pattern in Rural India: A Path Towards Sustainable Development.” Environmental Challenges 6: 100404. https://doi.org/10.1016/j.envc.2021.100404.

Simon, Gregory L, Rob Bailis, Jill Baumgartner, Jasmine Hyman, and Arthur Laurent. 2014. “Current Debates and Future Research Needs in the Clean Cookstove Sector.” Energy for Sustainable Development 20: 49–57. https://doi.org/10.1016/j.esd.2014.02.006

Singh, Punam, and Haripriya Gundimeda. 2014. “Life Cycle Energy Analysis (LCEA) of Cooking Fuel Sources Used in India Households.” Energy and Environmental Engineering (CEASE PUBLICATION) 2 (1): 20–30. https://doi.org/10.13189/eee.2014.020103

Stiglitz, Joseph E, Amartya Sen, and Jean-Paul Fitoussi. 2009. Report by the Commission on the Measurement of Economic Performance and Social Progress. Paris: Commission on the Measurement of Economic Performance and Social Progress.

Sweeney, Micah, Jeff Dols, Brian Fortenbery, and Frank Sharp. 2014. “Induction Cooking Technology Design and Assessment.” Small 5 (2014): 800.

Vanclay, Frank, and Daniel A. Bronstein, eds. 1995. Environmental and Social Impact Assessment. Chichester: Wiley.

Viswanathan, Brinda, and K S Kavi Kumar. 2005. “Cooking Fuel Use Patterns in India: 1983–2000.” Energy Policy 33: 1021–1036. https://doi.org/10.1016/j.enpol.2003.11.002.

Wattage, Premachandra, Andrew Smith, Colin Pitts, Adrian McDonald, and David Kay. 2000. “Integrating Environmental Impact, Contingent Valuation and Cost-benefit Analysis: Empirical Evidence for an Alternative Perspective.” Impact Assessment and Project Appraisal 18 (1): 5–14. https://doi.org/10.3152/147154600781767600.

WHO (CMH) and WHO‎. 2001. Macroeconomics and Health: Investing in Health for Economic Development: Executive Summary/Report of the Commission on Macroeconomics and Health. Paris: WHO Commission on Macroeconomics and Health and World Health Organization.

WHO. 2022. Indoor Air Pollution Database. Paris: World Health Organization.

WLPGA. 2018. Substituting LP Gas for Wood: Carbon and Deforestation Impacts. A Report to the World LPG Association. Neuilly-sur-Seine: World LPG Association.

Woods, Beth, Paul Revill, Mark Sculpher, and Karl Claxton. 2016. “Country-level Cost-effectiveness Thresholds: Initial Estimates and the Need for Further Research.” Value in Health 19 (8): 929–935. https://doi.org/10.1016/j.jval.2016.02.017

World Bank. 2003. World Development Report 2003: Sustainable Development in a Dynamic World--Transforming Institutions, Growth, and Quality of Life. Geneva: World Bank. http://hdl.handle.net/10986/5985 License: CC BY 3.0 IGO.