Title: ECONOMIC INCENTIVES CAN ALLEVIATE RURAL HOUSEHOLDS' ENERGY POVERTY IN NIGERIA
Authors: A.O. Kolawole and A. B. Sekumade
Abstract: Rural households' access to the use of modern fuels for cooking and lighting is crucial in alleviating energy poverty and achieving environmental sustainability. This study examined the energy poverty status of rural households and the role with which economic incentive can play. Descriptive Statistics and a Multinomial Logit Regression Model were used to analyze survey data for 225 households. The results showed that majority (96%) of the respondents had no access to modern sources of energy for cooking and lighting in their house as 40 percent utilized firewood while 34.7 percent utilized charcoal as their main energy option. About 77.3 percent of the respondents use kerosene as a catalyst for fuel wood combustion and lighting. Monthly income and prices of energy resources appears to be the most significant variable (p< 0.001) influencing energy options utilization. The negative coefficients of income (-0.0000178, -0.0000098) implies that household that are poor tend to be disposed to the use of forest resources while those that were better-off tend to augment with non-forest alternative fuels. More precisely, an average income that is ^1000 lower increases this probability by one point. Since biomass use is an indirect act of deforestation, effort should be geared towards agro forestry. Government can adopt the beneficiary-pays-principle by compensating agro forestry growers and discouraging undesirable practices. They must provide abatement technology incentives like energy saving firewood and improved stoves. Also, government can use the polluter-pays-principle which can help to stop treating the environment as a 'free good'. Subsidizing fossils fuel price to cause an energy switch among rural households is also essential.