1. Liquidity Constraint, LPG Stoves and Charcoal Consumption: a Randomized Controlled Trial in Tanzania
(Yonas Alem, Remidius Ruhinduka & Peter Berck)
Presentation made at the 7th Annual EASST Summit in Kampala, Uganda

2. Introduction
Charcoal is the main source of cooking fuel in Urban Africa
In Dar es Salaam-Tanzania, the consumption increased from 47% to 71% between 2001 and 2007, and now to 77% by 2012
This is contrary to energy ladder hypothesis: Positive economic growth within the same period
Dar es Salaam households alone consume more than 500,000 tones of charcoal per year (World Bank, 2009)

3. Intro....Is that a BIG DEAL? Serious Environmental Implications:
It requires ONE hectare of Miombo woodland to produce only 3 tonnes of charcoal (Luoga et al, 2000)
This implies more than 167,000 hectares of forest per annum to meet charcoal demand for DSM alone
Not to mention the associated pollution and Climate change consequences
Women and children spend relatively longer time for cooking using charcoal than alternative cleaner fuels such as LPG
Charcoal users spend more money to cook similar dish compared to the LPG users, else equal

4. Intro....research problem
Majority are aware of existence of alternative cleaner and affordable fuels (eg. LPG stoves) yet the switching has been significantly slow
Transition to cleaner fuels is conditional on adoption of appropriate cooking appliances, often very costly
Liquidity constraints and lack of credit suggested as potential factors (among others) to adoption of modern cook stoves
Whether relaxing such liquidity constraints among poor urban households will induce the switching and the implied impact of LPG stoves on charcoal consumption remained unclear

5. What we Do
We implement a Randomized Controlled Trial Experiment to study the adoption and impact of modern/cleaner stoves (LPG stoves) in an urban setting when such constraint is relaxed
Some randomly selected households in Dar es Salaam received LPG stove package (valued at TZS 200,000) either on credit or on subsidy
Treatment assigned at the street level: stove on credit (payable in 6 months time); stove on subsidy (paid upon receipt of the stove 25% of stove cost)

6. What we do……..
Credit treatment: Followed all standard credit extension procedures, in collaboration with WAT SACCO (A credible microfinance in Tanzania)
We first follow-up both the treatment and control households 4 months estimate the midline (i.e. short term) impact of our intervention of charcoal consumption and time saving.
We then execute the endline survey 15 months later to document a much longer term impact

7. How we Do what we do!!
Two districts in Dar (Kinondoni and Temeke), 4 wards (Mwananyamala, Manzese, Sandali and Azimio), and 16 streets (four from each ward)were objectively selected
Listing of the eligible households in each street by Street level leaders
Eligibility: Non-LPG user, and that charcoal is the main cooking fuel
From the eligible list 722 households were randomly selected, distributed to 3 groups; treatment1 (stove on credit), treatment2 (stove on subsidy) and control
A baseline survey was then executed in March-April 2015

8. How we do…..
A short Pre-intervention survey implemented in May 2015, followed by the actual intervention 2 weeks later
Only 296 out of 425 treatment households accepted the package (i.e. 70% compliance rate)
While subsidy households were required to pay TZS 50,000 on the upfront to get the stove, credit households pay the total amount TZS 200,000 gradually over a six months period
We randomly vary the repayment period: either daily, weekly or monthly
We follow-up all hhlds in end September, 2015 (midline survey) and August, 2016 (endline survey)

9. D-Stats: Charcoal consumption, by treatment category (Baseline, midline, endline)

10. D-Stats: Time spent on cooking (in minutes) by treatment category

11. Impact of LPG on Charcoal consumption (ITT results)

12. Impact of LPG on Cooking time(ITT results)

13. Impact of credit repayment scheme on credit repayment

14. Conclusion
We use a carefully designed RCT experiment to study the impact of LPG stove on charcoal consumption
We provide evidence that relaxing liquidity constraint can significantly save our forests, while providing both financial and cooking convenience
Compared to charcoal; LPG stoves reduce amount of charcoal used, amount of money spent on cooking energy, and amount of time spent on cooking
Those who adopted through a subsidy used the stove more often and reduced larger amount of charcoal than those who adopted on credit

15. Thank you for your attention!!!