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Urban demand for cooking fuels in two major African cities and implications for policy

  • Ipsita Das ,

    Roles Conceptualization, Data curation, Formal analysis, Methodology, Project administration, Writing – original draft, Writing – review & editing

    ipsita.das@duke.edu

    Affiliation Sanford School of Public Policy, Duke University, Durham, North Carolina, United States of America

  • Leonard le Roux,

    Roles Conceptualization, Data curation, Formal analysis, Methodology, Project administration, Visualization, Writing – original draft, Writing – review & editing

    Affiliation Sciences Po Department of Economics, Paris, France

  • Richard Mulwa,

    Roles Methodology, Writing – review & editing

    Affiliation Department of Economics and Development Studies, University of Nairobi, Nairobi, Kenya

  • Remidius Ruhinduka,

    Roles Conceptualization, Funding acquisition, Methodology, Supervision, Writing – review & editing

    Affiliation Department of Economics, University of Dar es Salaam, Dar es Salaam, Tanzania

  • Marc Jeuland

    Roles Conceptualization, Funding acquisition, Methodology, Supervision, Validation, Writing – original draft, Writing – review & editing

    Affiliations Sanford School of Public Policy, Duke University, Durham, North Carolina, United States of America, Duke Global Health Institute, Duke University, Durham, North Carolina, United States of America

Abstract

Nearly 2.3 billion people lack access to clean cooking fuels and technologies worldwide, representing a critical failure to achieve SDG7’s cooking energy access goal. In Sub-Saharan Africa, dependence on polluting cooking fuels is particularly high, resulting in considerable environmental, health, and time-related costs. Progress in the region has been greatest in urban areas, partly because incomes are higher and alternative fuels more widely available than in rural areas, but understanding of the dynamics of urban cooking energy transitions remains limited, and reasons for the divergent paths of different cities are unclear. Our primary objective is, therefore, to understand differences in the demand for several fuels among low-income households in two contrasting cities–Nairobi, where the transition is well advanced (N = 354), and Dar es Salaam, where progress has been slower (N = 1,100). We conducted a double-bounded, dichotomous choice contingent valuation experiment to elucidate how urban households would respond to changes in cooking fuels’ prices. Our analysis shows that fuel price responses vary across the income distribution and across these cities. Willingness to pay for the most commonly used cooking fuel in Nairobi–liquefied petroleum gas–is nearly twice that in Dar es Salaam, where more households prefer charcoal. In Dar es Salaam, low-income charcoal users appear especially entrenched in their cooking fuel choice. Our results have important implications for the effectiveness of different policy tools (e.g., bans, taxes, or clean fuel subsidies), since responses to pricing policies will depend on these varying price sensitivities, as well as targeting and the readiness of the supply chain (including policy enablers of supply) to meet increased demand. In conclusion, though policies are commonly designed at the national-level, policy-makers need to understand nuances in the local demand context very well when choosing instruments that best support energy transition among their most vulnerable citizens.

Author summary

Though populations in urban areas are more rapidly progressing towards SDG7’s universal clean cooking access goals, there is limited understanding of cooking energy transitions in cities in low- and middle- income countries. The impacts of policy instruments in fostering urban energy transition remain particularly unclear. This paper considers the demand for several cooking fuels among low-income households in two such contrasting cities–Nairobi (where the clean cooking energy transition is well advanced) and Dar es Salaam (where progress has been slower). We show that the willingness to pay for the most commonly used clean cooking fuel–liquefied petroleum gas–among the poor in Nairobi is nearly twice that in Dar es Salaam, where households prefer charcoal. In Dar es Salaam, low-income charcoal users appear more entrenched in their cooking fuel choice and less likely to switch to LPG. LPG subsidies targeted to low-income households appear especially crucial for fostering LPG uptake and regular use. The extent to which policy tools (e.g., taxes, fees) can be effective also depends crucially on the readiness of the supply side to meet increased demand, and complementary mechanisms (e.g., reducing upfront clean stove investments, efficient supply networks for fuel refills, information and behavior change campaigns).

Introduction

Globally, nearly 2.3 billion people lack access to clean cooking fuels and technologies [1]. High reliance on polluting fuels such as biomass and kerosene persists especially in Sub-Saharan Africa (SSA), generating time and drudgery costs, high exposures to health-damaging emissions, and substantial environmental damages [2]. Among the 20 countries with the smallest population share with clean cooking access, 19 are least-developed countries in SSA [1]. Moreover, between 2010 and 2020, the region experienced the lowest annualized increase in access (+0.48 percentage points per year) [1]. Progress towards clean cooking goals lags other energy-related objectives such as ensuring access to electricity.

Prior literature on drivers of improved and clean cooking energy access has largely focused on rural settings in low- and middle-income countries (LMICs), where clean energy access is generally lowest [312], with much lesser evidence from urban areas [1317]. However, clean cooking fuel use remains far from universal in many urban LMIC settings, and use of polluting fuels persists alongside high rates of electricity access and ample availability of a variety of alternative cooking fuels [1]. Typical explanations revolve around the widespread belief that clean fuels like liquefied petroleum gas (LPG) and electricity are too expensive to use for cooking purposes [1821], or issues related to the unreliability of LPG and electricity supply in many LMIC cities [22,23]. Small-scale production of fuel-efficient (relative to traditional cooking technologies) improved cookstoves (ICS), their limited marketing and distribution networks, and challenges with product quality, also mean that relatively affordable and high efficiency ICS can be difficult to procure reliably in many urban centers of LMICs [2427]. As such, household use of polluting fuels continues to be a major contributor to the cocktail of sources that are increasingly making ambient air in urban areas unbreathable [28].

Understanding household preferences and demand for cooking fuels and technologies can facilitate informed policymaking to stimulate adoption and use of clean cooking alternatives, thereby contributing to meeting SDG7. However, careful demand studies on cooking choices are relatively rare, especially from urban locations of LMICs. For example, evidence from rural India indicates that the households who most value reduced smoke emissions are also most likely to opt for a clean alternative (in one case, an electric stove that was low in cost and emitted little smoke [29], and in another, biogas [30]). In rural Ethiopia, meanwhile, willingness to pay (WTP) for new cooking technology has been shown to be lower than the market price of such technology, but stove attributes such as emissions reduction and stove durability increase demand [31]. Several demand studies also increasingly emphasize that subsidies and financing may be needed to overcome affordability challenges arising from poor households’ tight liquidity constraints, contradicting the idea that low WTP indicates that households do not value improved technology [32]. Consistent with this idea, households in rural Senegal continued to use ICS intensively even six years after they were first distributed free of charge, and recipients’ WTP was no lower than that of other households [33]. Similarly, in one of the few urban demand studies for improved cooking technology, in Nairobi, Kenya, a recent study found that households’ WTP for an energy-efficient charcoal ICS ($12) was less than half of that stove’s market price (which ranges between $27-$41), but loan provision significantly increased WTP [34].

Activating levers other than subsidy and finance, meanwhile, have been found to have mixed effects on WTP for cleaner cooking technologies: in rural Uganda, for example, neither health nor time savings messaging increased WTP for ICS, while in rural India, health messaging had a modest positive effect on households’ reported WTP for LPG fuel [35,36]. In other evidence from rural India, significant predictors of exclusive LPG use (i.e., no fuel stacking) were knowledge about LPG’s health benefits and community-level LPG diffusion [37]. Limited evidence on electric induction stoves shows that in urban Nepal, monthly expenditures (a proxy for socio-economic status) and electricity supply are significant determinants of electric cooking, and information on electric cooking benefits increases induction stoves’ WTP by a modest amount (~10%) (22). Very few studies have examined the relationship between fuel stacking and demand for LPG, however [38].

To address some of the gaps in the literature, this paper focuses on urban cooking fuel demand in two of East Africa’s largest and fastest growing cities–Nairobi (population of 4.4 million), Kenya and Dar es Salaam (population of 5.4 million), Tanzania [39,40]. Our double-bounded, dichotomous choice contingent valuation (CV) experiment helps us to understand how urban households would respond to changes in the price of their preferred (main) cooking fuels [41]. It acknowledges that households typically stack fuels, and that households may react to higher prices by either maintaining their current cooking energy portfolio, cooking less with their preferred fuel, or switching entirely away from it. In the latter two cases, the surveys also provide information on households’ preferred back-up fuel, which helps to reveal the transitions that might occur if policy actions were to change relative fuel costs. In the Materials and Methods section, we provide details of the CV experiment, including how it addresses some of the issues that typically arise in administering such surveys in LMICs [42,43].

In addition to the basic analysis, we explore the correlates of households’ willingness to maintain their current fuel use under increased prices, focusing especially on the heterogeneity in responses across cities and across the income distribution. The analysis adds nuance and policy relevance to the conventional finding that low income and affordability are key factors that slow the transition away from polluting cooking fuels [13,4448]. Judicious application of price instruments can facilitate substitution into socially beneficial solutions, but those responding to policy instruments such as taxes and subsidies are not always the most intensive users of polluting fuels [49,50]. Better understanding variation in both price and income responses of demand for cooking energy across locations is essential to informing more effective policy design and targeting.

Context of cooking energy use in Nairobi and Dar es Salaam

There are key differences between Nairobi and Dar es Salaam that inform interpretation of the comparative analysis of cooking fuel use in these two large and important East African capitals. In 2019, average gross annual income per capita in Nairobi County was 5,497 USD, compared to 1,941 USD in the Dar es Salaam Region (assuming 1 USD = 2,333.3 TZS, and 1 USD = 108.5 KS) [51,52]. Despite having similar urban use of clean fuels in 2000 (4% in urban Kenya and 2% in urban Tanzania), adoption in urban Kenya has far outpaced that in urban Tanzania over the past twenty years (24% in urban Kenya and 7% in urban Tanzania) (S1 Fig) with apparent rapid changes in the primary cooking fuel identified by households in both cities between 2015 and 2020 [53]. Over the same period, the LPG market has also been expanding in both cities (in Nairobi, reported primary LPG use was 40% in 2015 and 65% in 2020; in Dar es Salaam, reported primary LPG use was 12% in 2015 and 36% in 2020), with the proportion of households using LPG more than doubling in Dar es Salaam even as charcoal dependence remains high (in Nairobi, reported primary charcoal use was 5% in 2015 and 3% in 2020; in Dar es Salaam, reported primary charcoal use was 76% in 2015 and 60% in 2020) (S2 Fig) [5456]. In both locations and in other similar settings, most households perceive that electricity is too expensive to use for cooking purposes [57].

Policies that affect cooking fuel prices have likely played some role in influencing these trends. The pro-clean cooking policy stance of the Kenyan government, and the dynamism of the private sector response to rising demand for clean fuels, for example, are well known [58]. Throughout the 2000’s, Kenya eliminated excise duties on kerosene, facilitating adoption of that fuel at the expense of solid fuels [59]. In 2016, Kenya zero-rated the value-added tax (VAT) on LPG, and introduced subsidized access to electricity for low-income households [60]. The Government-led Mwananchi gas project launched in 2017 had an ambitious target of increasing nation-wide LPG penetration from 10–70% in three years, by subsidizing purchases of LPG canisters and stoves by low-income households [61]. That project was suspended in 2018 owing to many issues, however, including high rates of LPG cylinder defects, poor targeting of beneficiaries, and low preparedness of the project implementer, the National Oil Corporation of Kenya, for the distribution and refilling of cylinders [62]. In keeping with its 2030 target of 35% LPG cooking fuel adoption [58], though, the Kenyan government’s LN 121 reforms of 2019 included better enforcement against illegal refilling of LPG cylinders, enhanced safety protocols, and creation of a structure of single LPG cylinder brand ownership that unified and overcame the opposition of majority members of the Energy Dealers Association (EDA, a trade group comprising small-scale LPG marketers) [62]. As a result of these reforms, new market entrants like Proto Energy have been able to drive LPG prices down in the Nairobi market, by about 25%, and these effects have begun to spread to other parts of Kenya as well. Finally, though it was criticized as regressive and ineffective, a ban on the production and transportation of charcoal into Nairobi was introduced in 2018, which increased the effective price of charcoal [6365].

In contrast, while the Tanzanian government has long embraced similar goals for households transitioning to modern fuels (in its national energy policy of 1992, amended in 2003 and 2015) [66], it has taken fewer specific policy actions to support those goals, and most urban households continue to use charcoal as their main cooking fuel. In 2008, the government did exempt LPG stoves and fuel from VAT and excise duties in order to encourage uptake [67]. In both Nairobi and Dar es Salaam, the VAT is not collected on charcoal transactions given the informality of this industry, though various other royalties and license fees are collected from producers and transporters in Tanzania [68]. Kenya and Tanzania also differ substantially in their LPG distribution and storage infrastructure investments. The capacity of Kenya’s existing supply chain infrastructure is adequate to meet its 2030 demand: 92% of Kenya’s LPG comes through two terminals at the Mombasa port; the publicly-owned terminal’s storage capacity is 3,000 metric tons and the privately-owned terminal’s bulk storage capacity is ~26,000 metric tons and the temporary floating facility’s capacity is 14,000 metric tons [62]. Tanzania, on the other hand, has historically had lower storage capacity (8,050 metric tons as of 2016, though two new facilities constructed and commissioned as of 2019 added about 9,000 metric tons) [58].

Energy use characteristics of sampled households

In 2019, we interviewed 354 households in four informal settlements in Nairobi (we focused on lower income areas in Nairobi since these are the areas where the city’s population continues to rely on polluting fuels [69]), and in 2020 we interviewed a representative sample of 1,100 households (largely residing in informal settlements) across Dar es Salaam (S3 Fig). In the Materials and Methods section, we elaborate on our sampling strategy. A detailed summary of the characteristics of sampled households in both locations is presented in S1 Table. Here, we specifically describe the energy profile of the sampled households. In the Nairobi sample, LPG is the most common cooking fuel (54%), followed by kerosene (29%) and charcoal (11%). In Dar es Salaam, charcoal is the most common cooking fuel (61%), followed by LPG (32%) and kerosene (4%). In Nairobi, fuel procurement times for all major cooking fuels are similar, ranging from 10–14 minutes per purchase. Average reported daily fuel collection times in Dar es Salaam are much higher than in Nairobi, with firewood collection time being the highest (44 minutes per trip) and kerosene collection time being the lowest (24 minutes). All households in the Nairobi sample have electricity, and electricity access is slightly lower in the Dar es Salaam sample (85%). Households in the Nairobi sample are of slightly higher socio-economic status than those in the Dar es Salaam sample. Per capita monthly expenses are 94 USD in Nairobi, compared to 78 USD in the Dar es Salaam sample, and roughly 51% of the Nairobi sample had completed secondary schooling, compared to 33% in Dar es Salaam.

Primary cooking fuel choices in response to price increases

For each of the three main cooking fuels in Nairobi (charcoal, kerosene and LPG) and Dar es Salaam (firewood, charcoal and LPG), we assessed demand over randomly-assigned price increases that ranged from 25% to 200% (S2 Table presents the full range of prices offered for the three fuels in both cities). The derived demand curves from responses to initial bids show a mostly linear relationship between WTP for cooking fuel and price (Fig 1).

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Fig 1. Demand graph for cooking fuels in Nairobi and Dar es Salaam (initial bids only).

Note: This figure shows the percentage of households in the Dar es Salaam and Nairobi samples reporting that they would continue using their primary cooking fuel when faced with a given initial price increase. Price increases are randomly assigned across survey respondents and baseline prices are converted into USD for comparison in this figure. The initial bids in the price increases and willingness to maintain use responses are presented here.

https://doi.org/10.1371/journal.pstr.0000077.g001

Among respondents in Nairobi that use charcoal as their primary cooking fuel, nearly half the respondents were willing to maintain their primary fuel use under the lowest price increase of 25%, but only 10% were willing to pay 200% more for the fuel. The WTP probabilities among primary kerosene-using respondents were similar: ranging from 62% to 16% for these initial lowest and highest bids, respectively. For primary LPG fuel respondents, the range of WTP probabilities was somewhat higher, dropping from 93% to 30%. Regression analyses further show that the price elasticities of maintaining use of each of these primary fuels are somewhat similar, ranging from -0.5 to -0.7 (Table 1, columns 1, 4, and 7). Yet, controlling for fuel stacking (i.e., use of multiple cooking fuels), which represents an important strategy for coping with high fuel costs or unreliable fuel alternatives [70,71], adds important nuance to these findings. Specifically, we find that accounting for stacking leads to higher estimates of the price elasticity for charcoal and LPG (Table 1, columns 2 and 8), while kerosene use appears less price-sensitive (Table 1, column 5). Primary LPG-using households are 13 percentage points more likely to switch away from that fuel when they already use other cooking fuels (Table 1, column 8). Moreover, the higher the proportion of LPG consumed in total cooking fuel use, the more likely a household is to maintain use of this option (Table 1, column 9). In S3 Table, we further explore the determinants of cooking fuel stacking.

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Table 1. Probability of maintaining primary cooking fuel use in Nairobi and Dar es Salaam: average marginal effects.

https://doi.org/10.1371/journal.pstr.0000077.t001

For primary charcoal users in Dar es Salaam, 70% were willing to pay the lowest increase, and 30% the highest price (Fig 1). For primary firewood users, half of the respondents facing the lowest bid level were willing to pay, and only 14% were willing to pay the highest price. Finally, for LPG 72% of primary LPG users were willing to continue using LPG at the lowest price increase, which dropped to 27% willing to continue at the highest price. Unlike in Nairobi, the regression analyses indicate very different price elasticities for maintaining use of charcoal (-1.1) vs. LPG (-0.3) in Dar es Salaam (Table 1, columns 10 and 13), and controlling for fuel stacking does not substantively alter these estimates (Table 1, columns 11, 12, 14 and 15). However, primary charcoal and LPG users are more likely to maintain their primary use when they rely more heavily on these as their primary fuels, as measured by proportion of total cooking fuel use (Table 1, columns 12 and 15).

In models that pool across all fuels in each location, based on conversions of quantities in kg or L to energy equivalents (S4 Table, Columns 1–6), we find similar negative fuel price elasticities in the two cities (ranging from -0.5 to -0.6). The relationship between the stacking variables and the WTP probability is markedly different in the two cities, however. Stacking is associated with a greater likelihood of switching away from one’s primary fuel in Nairobi. In Dar es Salaam, stacking has the opposite relationship with switching away from one’s primary fuel. This may be due to the differing stage of the energy transition in these cities and how it relates to fuel preferences. That is, given the relative early stage of LPG adoption in Dar es Salaam compared to Nairobi, LPG users (who tend to be stackers) there may perceive charcoal as their primary fuel despite reporting, aspirationally perhaps, that LPG is their primary fuel.

Percentage decreases in cooking

Rather than responding on the extensive margin of primary fuel use (that is, switching away from it entirely), households may choose only to reduce their use of a more expensive primary cooking fuel when its price increases. In the restricted sample of households that accepted the first proposed price increase and maintained primary use of their preferred fuel, we analyze the extent of the cooking reduction they predicted they would make. In Nairobi (S5 Table), we find that a 1 USD increase in LPG price per kg would reduce cooking with LPG by 9–12 percentage points. In Dar es Salaam (S6 Table), we find that a 1 USD increase in charcoal per kg and LPG price per kg faced by primary users of those fuels would reduce cooking with those fuels by 25–30 percentage points, and 8 percentage points, respectively.

Willingness to pay for the various primary cooking fuels

We provide three different measures of WTP for each of the primary fuels considered: non-parametric a) Turnbull lower-bound estimates and b) Kristrom mid-point estimates, as well as c) estimates obtained from application of maximum likelihood regression estimation to the double-bounded dichotomous choice responses to the CV questions (see the Materials and Methods section for details on the differences in these methods).

In Nairobi, the measures range from 0.14–0.2 USD/kg charcoal, 1.1–1.4 USD/liter kerosene, and 2.3–2.9 USD/kg LPG (Table 2). These measures are generally not sensitive to controlling for stacking behavior in the regression models, though the estimate declines slightly for LPG in Nairobi, from 2.7 to 2.3 USD/kg. In Dar es Salaam, the measures range from 0.05–0.13 USD/kg firewood, 0.3–0.4 USD/kg charcoal, and 1.0–1.2 USD/kg LPG. Controlling for stacking measures slightly increases WTP for firewood and LPG. In the pooled analysis, despite the substantial difference in the fuel mix relative to that in the Nairobi sample, WTP for 1 MJ of cooking fuel in Dar es Salaam is similar to that in Nairobi, at 0.1 USD.

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Table 2. Willingness to pay estimates (in USD) for cooking fuels in Nairobi and Dar es Salaam.

https://doi.org/10.1371/journal.pstr.0000077.t002

These estimates provide valuable insight on the nature of demand for cooking fuels in these two cities. First, in both cities, the WTP for users’ primary fuels is somewhat higher than currently observed prices. For LPG, WTP is much higher (by roughly over 65%) than current prices, reflecting a strong preference among users of this clean fuel for the benefits that it provides. Policy may need to focus on better targeting of incentives and other approaches to foster uptake and increase access among households who persist in their use of polluting cooking alternatives.

Second, WTP for LPG in Nairobi is roughly double that in Dar es Salaam, despite the low-income Nairobi sample only being slightly richer on average than the representative sample that was drawn in Dar es Salaam. Third, WTP for charcoal among primary charcoal users is substantially lower and different in Nairobi (where it is less than 1.5 times the prevailing market price) and Dar es Salaam (where it is twice the prevailing market price). Thus, households clearly have higher demand for charcoal in Dar es Salaam, which may be related to the less vigorous clean cooking policy agenda there relative to that in Nairobi. From a clean cooking transition perspective, it is important to know how much relative charcoal prices would need to change to induce more substantial switching towards clean fuels.

Distributional aspects of price change policies

It is critical to also understand the distributional impacts that fuel pricing policies might have across the income distribution. Low-income households are likely to respond differently to price increases than high-income households, especially when the switching costs are high. There is also a risk that price increases on some fuels could be regressive. To explore such aspects, we restrict the Dar es Salaam sample to households who cook mainly with charcoal, given that over 60% households (n = 672) use charcoal as their primary cooking fuel. In Nairobi, we restrict the sample to households who cook mainly with kerosene, who constitute 30% of the sample (n = 104). These two subsamples represent households that policy makers might target for transitioning to cleaner fuels. We then divide the income distribution into relatively low- and high-income households, based on whether households fall below or above the median of per capita monthly expenditures. Finally, we group the low price (25–50%) and high price increases (100–200%) together.

In Dar es Salaam, high-income charcoal users are more likely than low-income charcoal users to switch up the energy ladder to LPG for any given price increase, especially when the price increase is large (Fig 2). Lower-income households are less likely to switch away from charcoal, but those switching more often move to kerosene and firewood. Thus, large charcoal price increases in Dar es Salaam at this time could be regressive, in the sense that low-income households either maintain the use of charcoal, or switch down the energy ladder. In Nairobi, in contrast, where policies are more supportive of clean options, low-income households appear more likely to switch to LPG than high-income households. High-income kerosene-using households are instead more likely to switch to charcoal, suggesting that these households’ current preference for polluting fuel may reflect a resistance to using LPG that should be further explored.

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Fig 2. Stated responses to hypothetical price increases for low- and high-income households in Dar es Salaam and Nairobi.

Note: This figure restricts the samples to households who mainly cook with charcoal in Dar es Salaam (n = 672), and households who mainly cook with kerosene in Nairobi (n = 104), as these are the most commonly used polluting primary cooking fuels in our study sample. These respondents are divided into relatively low-income and relatively high-income households, based on whether they fall below or above the median of per capita monthly expenditure in the sample. The hypothetical price increases are then categorized into low increases (25–50%) and high price increases (100–200%). The figures present stated responses to the question of whether households continue to use their primary cooking fuel, or switch to another cooking fuel.

https://doi.org/10.1371/journal.pstr.0000077.g002

Similar results are obtained from regression analyses (S4 Table). In the Dar es Salaam sample, higher expenditure households are more likely to switch fuels, while the income elasticity of fuel switching is much lower in the Nairobi sample. The Nairobi results may be driven by vertical differentiation in the quality of kerosene stoves (between wick and kerosene stoves); in Dar es Salaam, charcoal stoves are comparatively homogenous. Thus, low-income kerosene users in Nairobi may switch up the energy ladder because the low utility of using a low-quality kerosene stove constitutes an additional cost for the poor. Alternatively, these results may be driven by differences in the market for alternative fuels like LPG and charcoal in these two contexts, as influenced by historical and existing policy actions.

Discussion

Our comparative study in two of the fastest growing cities in East Africa contributes to a sparse empirical literature on WTP for cooking fuels in urban LMICs, particularly in SSA where access to clean cooking fuels remains the lowest worldwide. We analyzed demand for the various primary cooking fuels used in each city, and account for fuel stacking. As fuel pricing policies are likely to affect low- versus high-income households differently, we also analyzed distributional impacts of price changes, thereby filling an important gap in the literature that relates to the affordability challenges impeding adoption of clean cooking technology.

Over the last decade, there have been rapid changes in cooking fuel use in Dar es Salaam and Nairobi, with LPG emerging as a key competitor to charcoal and kerosene. However, much of this transition has been driven by high-income households who can afford the higher upfront and running costs of LPG. Given the challenge of financing clean fuel subsidies, a critical question that policy makers face is whether and to what extent taxes, fees, charges, and other policies should be used to reduce demand for polluting fuels and encourage fuel switching. The effectiveness and viability of each of these depends on the elasticities of demand for different fuels, as well as targeting and policy enforcement aspects.

Our findings show that fuel switching patterns in response to price changes vary across the income distribution and depending on the specific context, i.e., across these two East African cities. In both locations, the price elasticity of demand for cooking energy overall is similar, and LPG demand appears to be somewhat less price elastic than charcoal demand. WTP for LPG among respondents cooking primarily with that fuel is also significantly higher than prevailing market prices, consistent with evidence from India [37]. In relative terms, however, in our Nairobi sample, the ratio of the market price to WTP is low for LPG compared to charcoal and kerosene, while it is only low for LPG compared to firewood (and not compared to charcoal) in the Dar es Salaam sample. In the latter sample, low-income charcoal users thus appear more entrenched in their choice of cooking fuel and less likely to switch to cleaner LPG, indicating the need for policies to subsidize clean cooking there. LPG subsidies, while critical for fostering uptake [49], can also be regressive unless they are well targeted to reach the poor; evidence from many national LPG subsidy programs, globally, has found that the beneficiaries of these programs are mainly upper-income households [32,72]. Therefore, LPG subsidies targeted to low-income households appear especially crucial for fostering LPG uptake and its regular use among lower-income segments of the population. Learning from other environmental health domains, there could be complementary approaches to targeting of clean fuel subsidies to low-income households such as volumetric targeting (relating subsidy amounts to consumption volume), categorical targeting (subsidy provision basis geographic location or observed characteristics [73]), and means-testing on the basis of income, assets, or consumption [74].

The extent to which different policy tools can be effective also depends crucially on the readiness of the supply side to meet increased demand [23]. Non-price instruments such as bans on charcoal that effectively increase the price of charcoal in low enforcement contexts, or taxes, may be successful in urban areas where a market for alternative fuels exists, but can be regressive or backfire when households have limited access to affordable clean fuel alternatives, inducing back-sliding to even dirtier fuels [64]. As such, other complementary mechanisms are essential, such as supporting access to clean fuels by reducing upfront stove and canister investments [32], aiding the private sector in developing efficient supply networks for fuel refills [75], and shifting preferences away from polluting fuels with information and behavior change efforts [76]. Impact evaluations on LPG and ICS provision and other empirical work on national policies around cooking energy have emphasized that single interventions reliant on a singular policy lever are often insufficient to advance wide-reaching household energy transition [32].

Our study has important limitations. First, our purposive sampling in Nairobi affects the generalizability of the study findings to the entire city’s population. Our rationale for focusing on Nairobi’s informal settlements was to obtain a mix of various cooking fuels among sampled households, but this came at the cost of representativeness over the entire city. Had we not focused on only low-income areas of the city, our sample would have included far fewer kerosene users, affecting the precision of our estimates of WTP for kerosene. Second, in the two cities, our samples do not include primary users of bio-ethanol, a clean cooking fuel that is now actively being promoted by the private sector in Nairobi and Dar es Salaam [77,78], but that has thus far achieved only limited reach. We are, therefore, unable to compare WTP for LPG with that for alternative clean cooking fuels. Third, we control for only two measures of fuel stacking, but literature has argued convincingly that stacking behavior is highly complex and dynamic over time [70].

Despite these limitations, this comparative CV study provides a set of valuable insights that should help guide similar research on the persistent cooking energy poverty problem facing many LMICs today. In particular, our research highlights that cooking fuels demand estimation must be conducted on relatively large sample sizes that are representative of the populations and cooking fuel behaviors being targeted by interventions. Moreover, as fuel stacking is widely prevalent in LMICs, it is imperative to understand household preferences and motivations for continued use of polluting fuels, using a mix of quantitative and qualitative (including semi-structured in-depth interviews, focus group discussions and participant observations) approaches [16]. This combination of methods provides a more comprehensive understanding of contextual cost barriers to the clean cooking energy transition.

Finally, by providing a rich characterization of the demand for alternative cooking fuels in two rapidly growing cities in SSA, our study can be valuable for enhanced policymaking. Our findings especially highlight the need for various policy instruments to discourage use of polluting cooking fuels and stimulate sustained demand for cleaner cooking options. More specifically, policies must address affordability constraints, particularly among low-income households (e.g., taxing polluting cooking fuels, while increasing subsidies for improved and clean cooking technologies and fuels, and improving their targeting to low-income consumers). Such subsidies must also be complemented with improving clean technology and fuel distribution infrastructure, developing and streamlining the market, information and education campaigns, and efforts to empower women as primary consumers and suppliers of clean cooking technology and fuels [32]. Holistic, multi-faceted approaches are sorely needed to tackle such a major challenge as the global cooking energy poverty problem.

Materials and methods

Sampling strategy

We draw on data collected in mid-2019 in Nairobi, Kenya and early-2020 in Dar es Salaam. The two surveys were part of distinct energy access studies conducted less than a year apart in the two locations. Their respective budget constraints determined the final sample size in each location. All data were gathered before the COVID-19 pandemic began in these countries. In Nairobi, the sample comprises 354 households living in four informal settlements, with sampling in each area following a probability proportional to size (PPS) sampling methodology (S3 Fig, Panel A). In each informal settlement, households were randomly selected using a field-based counting method to fulfil the study sample requirement. In Dar es Salaam, the fieldwork was conducted in January and February 2020, and a total of 1,100 households were interviewed (S3 Fig, Panel B). A similar multi-stage stratified random sampling design was applied for selection of final wards, streets and households, also using a PPS sampling methodology.

To meet our research goal of obtaining a distribution of cooking fuel users in each city, particularly polluting cooking fuel users, we used somewhat different sampling approaches in the two cities. In Dar es Salaam, the sampling strategy aimed for a representative sample of cooking fuel use in the city. Our Dar es Salaam study data are comparable with the Household Budget Survey (HBS) (2017–2018) for the Dar es Salaam Region. For example, the average age in the HBS 2017–2018 is 26 years (N = 3,272 household members in Dar es Salaam Region) and 28 years in our survey (N = 4,393 household members). In addition, 52.4% of HBS 2017–2018 household members in Dar es Salaam Region are female, while this figure is 55.2% in our survey. The proportion of household heads whose highest level of education was primary school is 47.8% in the HBS 2017–2018 and 48.4% in our survey. In terms of fuel use, 61.5% of respondents in our survey cook mainly with charcoal, 32.2% with LPG, 3.7% with kerosene and 2.4% with firewood in our survey; in the 2017–2018 HBS these figures for Dar es Salaam region are 62% of households cook mainly with charcoal, 10.4% with LPG, 6.9% with kerosene and 4.5% with firewood. On the other hand, in Nairobi’s primary cooking fuel mix, LPG has the highest share (65%, as of 2020) and use of polluting fuels is relatively low (compared to Dar es Salaam). Based on our extensive interviews with public and private sector stakeholders in the energy landscape in Nairobi, discussions with the local field partner and prior empirical literature on energy use in Nairobi, we targeted informal settlements where polluting cooking fuel use remains much higher. Therefore, the Nairobi sample was explicitly designed to cover lower-income households in the city residing in informal settlements. While the share of LPG in the primary cooking fuel mix in our sample is lower (54%) compared to that for Nairobi in the Kenya Continuous Household Survey Programme 2020 (65%) [54], it is comparable with that for Nairobi in the Kenya Household Cooking Sector Study 2019, where LPG was the most common primary cooking fuel (56%), followed by kerosene (27%) and charcoal (6%) [79].

Informed consent

The Campus Institutional Review Board (IRB) at Duke University reviewed and approved the research protocol for the Nairobi survey (Campus IRB Protocol Number: 2019–0330). Research permits were obtained from the University of Dar es Salaam (UDSM) and study district officials for the Dar es Salaam survey (UDSM Reference Number: AB3/12(B)). In both Nairobi and Dar es Salaam, we obtained oral informed consent from the household head and the primary cook in our sampled households, prior to administering the questionnaire. Oral consent was deemed acceptable because the research took place in settings where requesting people to sign a document can cause distress and mistrust. Field officers read out the consent script to the respondents, and their response to the consent question was recorded in the survey form.

Survey

Some of the key issues in administering CV experiments in LMICs are poor development of CV scenarios, poor survey implementation and oversight of not testing the effects of survey design variations on the CV experiments’ results [43]. As part of the survey elaboration process, we reviewed pertinent reports and documents on the cooking sector in both countries. For the survey design and implementation, we worked with local partners (research institutions and survey firms), conducted scoping field visits, and prepared a sampling framework (using maps in both locations).

The survey instruments in Nairobi and Dar es Salaam were similar, save for minor adjustments to ensure suitability to the local context. Comprehensive data were collected on household demographics, cooking practices and fuel preferences, household consumption and wealth and access to credit. To assess households’ WTP for cooking fuels (namely, firewood, charcoal, kerosene and LPG), each CV experiment included a double-bounded, dichotomous choice design, thereby avoiding incentive-incompatibility problems [43]. Testing of the CV experiment was especially important given the dearth of prior work in resource-constrained settings that aimed to value cooking fuels. In addition to helping frame the CV scenario, pilot testing helped determine the percentage price increases that would be most relevant to selected wards in Nairobi and Dar es Salaam. Following the empirical literature [43], we randomly assigned four bidding games or four price increases to different respondents in each study location. As expected, these different starting points brought out different responses.

Experienced field partners implemented the field work, where enumerators underwent rigorous training on the survey instrument. Two co-authors of this study extensively trained enumerators on the CV experiment module of the household survey. Local field teams’ thorough pilot testing of the household survey and the CV experiment informed the final questionnaire. Surveys were completed using tablet-based, in-person enumeration.

In both the Nairobi and Dar es Salaam household surveys, in the CV experiment module, the hypothetical situation was described to the respondent in detail. S1 Text and S2 Text include the CV experiment modules administered in Nairobi and Dar es Salaam, respectively. Enumerators first described how different cooking fuels affect households in a multitude of ways. They then asked respondents if they would consider switching their primary cooking fuel should there be an increase in its price. In both settings, respondents received randomized initial bids for cooking fuel price increases (in percentage terms) from a set of four different prices increases (25%, 50%, 100% and 200%). S2 Table shows the randomized price increases offered to households in both locations. If respondents responded positively to the initial bid, they received a follow up question with a payment option that was double the initial bid; if respondents replied in the negative to the initial bid, they received a follow up question of a payment option that was half the initial bid. In addition, respondents who declined to switch their main cooking fuels were asked whether, and to what extent, they would reduce their cooking in response to the price increase. This design allows us to assess both intensive and extensive margin responses to hypothetical fuel price changes.

Relationship between cooking fuel preferences and price

We examine households’ propensity to maintain their primary fuel use in the face of the randomly-assigned price increases. In the basic analysis, we examine the role of price alone (Model 1); more sophisticated regression analysis then controls for fuel stacking behavior and a range of household characteristics (Models 2 and 3). Fuel stacking behavior is operationalized as both binary and continuous (proportion energy use) variables. (In S3 Text, we describe the construction of these variables and in S3 Table, we examine the determinants of cooking fuel stacking among surveyed households in Nairobi and Dar es Salaam). In determining the relationship between cooking fuel preference and stacking, WTP is a binary variable that indicates whether the respondent agreed to the first price increase randomly offered. Using a probit specification, we estimate a household’s demand for cooking fuel, wherein the functional form assumes that: (1) where Φ is the cumulative distribution function of the standard normal distribution.

In Eq 1, the outcome variable is the binary answer of whether (1) or not (0) the household is willing to pay the first randomly allocated price increase, P is the price variable of the randomized increase (categorical), S is the fuel stacking variable (run separately for binary and the continuous variables), and Z is the vector of all other variables included in the model.

The Z variables included in the regressions are: household size, dependency ratio (defined as the ratio of the younger (ages 14 and under) and older (ages 65 and above) population in the household to the working age population (between 15–64 years) in the household), the age of the household head (in years), the education level of the household head (categorical), an indicator for whether the household head is female, the log of monthly per capita total expenditures (in USD), whether the household has saved money anywhere in the past year, whether the household has an electricity connection, and weekly time taken (in minutes) to acquire various cooking fuels (firewood, charcoal, kerosene, LPG).

We also analyze whether households that said they would continue with the same primary fuel use, would change their amount of cooking given the price increase. For this analysis, we run a conditional regression on those that responded positively to the initial bid (in other words, they would continue using their primary fuel even if its unit price increased), wherein the outcome variable is the percentage of normal cooking that would be reduced, and the explanatory variables are the same right-hand side variables as in Eq 1.

Estimating WTP for cooking energy

We adopt a double-bounded, dichotomous choice CV experiment to elicit respondents’ willingness to maintain both primary reliance on their main cooking fuel (namely, charcoal, kerosene and LPG in Nairobi, and charcoal, LPG and firewood in Dar es Salaam) [41,80]. We examine the sensitivity of that main fuel use to price increases that were randomly assigned to survey respondents. We estimate average WTP in the sample of primary users of each fuel, both in terms of units purchased, and their useful energy content.

Taking into account the double-bounded design of the CV experiment, we use a maximum likelihood estimator that includes both the initial and second bids to estimate the WTP for each cooking fuel–charcoal, kerosene and LPG in Nairobi, and firewood, charcoal and LPG in Dar es Salaam. The user-generated STATA command ‘doubleb’ is used for this calculation [81]. The independent variables controlled for are the same as those used in Eq 1. For comparison, we also derive non-parametric WTP estimates, namely the conservative Turnbull lower-bound estimates of WTP and the Kristrom mid-point estimates [82,83]. These alternative estimates only leverage the data on response to the first experimentally assigned price increase, which maximizes the incentive compatibility of the CV design, and do not control for household-specific factors that might influence demand [84].

We also pool responses across the three cooking fuel categories in each city to examine the links between household characteristics and cooking fuel valuation, in addition to eliciting WTP for cooking fuels. We use a similar probit regression approach as in Eq 1 to estimate this association, where the left-hand side variable is the probability that a household responds positively to the CV questionnaire. We normalize across fuels in the pooled models to account for the different useful energy content of each. Specifically, prices were pooled and normalized by dividing by calorific value for each fuel (MJ/kg) and again by fuel efficiency (%); the final unit is in KES/MJ in Nairobi and TZS/MJ in Dar es Salaam, which have further been converted into USD/MJ.

Supporting information

S1 Fig. Access to clean fuels and technologies for cooking in urban areas in selected East African countries.

Note: Clean cooking fuels are defined as electricity, LPG, natural gas. Source: WHO. 2023. Household Energy Database.

https://doi.org/10.1371/journal.pstr.0000077.s001

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S2 Fig. Main household cooking fuels in Nairobi and Dar es Salaam in 2015 and 2020.

Source: Nairobi: Kenya Integrated Household Budget Survey 2015–2016 for Nairobi County (N = 554). Kenya Continuous Household Survey Programme (KCHSP) - 2020 Annual data for Nairobi County (N = 795). Dar es Salaam: 2014–2015 Tanzanian National Panel Survey data for Dar es Salaam Region (N = 552). 2020 EfD Household Energy Survey (N = 1,098).

https://doi.org/10.1371/journal.pstr.0000077.s002

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S3 Fig. Wards selected in Nairobi and Dar es Salaam study sites.

Note: OpenStreetMap is used to create the base map layers for both figures. Ward shapefiles, showing the wards visited in the surveys, are overlaid on these base maps. Dar Es Salaam base layer of map: https://www.openstreetmap.org/#map=12/-6.8243/39.2239. Terms of use: https://operations.osmfoundation.org/policies/tiles/. Copyright and License Terms: https://www.openstreetmap.org/copyright. Dar Es Salaam ward shapefiles: https://data.humdata.org/dataset/2012-census-tanzania-wards-shapefiles. License: (CC BY-IGO) Creative Commons Attribution for Intergovernmental Organisations. Nairobi base layer of map: https://www.openstreetmap.org/#map=13/-1.2828/36.8020. Terms of use: https://operations.osmfoundation.org/policies/tiles/. Copyright and License Terms: https://www.openstreetmap.org/copyright. Nairobi ward shapefiles: https://data.humdata.org/dataset/administrative-wards-in-kenya-1450. License: (CC BY) Creative Commons Attribution International.

https://doi.org/10.1371/journal.pstr.0000077.s003

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S1 Text. Contingent Valuation (CV) experiment in Nairobi.

https://doi.org/10.1371/journal.pstr.0000077.s004

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S2 Text. Contingent Valuation (CV) experiment in Dar es Salaam.

https://doi.org/10.1371/journal.pstr.0000077.s005

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S1 Table. Household characteristics of study sample in Nairobi and Dar es Salaam.

https://doi.org/10.1371/journal.pstr.0000077.s007

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S2 Table. Price (in USD) of cooking fuels in Nairobi and Dar es Salaam.

https://doi.org/10.1371/journal.pstr.0000077.s008

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S3 Table. Correlates of cooking fuel stacking.

https://doi.org/10.1371/journal.pstr.0000077.s009

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S4 Table. Probability of maintaining primary cooking fuel use (pooled): average marginal effects.

https://doi.org/10.1371/journal.pstr.0000077.s010

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S5 Table. Percentage change in cooking among those that continue using primary cooking fuel after hypothetical price increase in Nairobi.

https://doi.org/10.1371/journal.pstr.0000077.s011

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S6 Table. Percentage change in cooking among those that continue using primary cooking fuel after hypothetical price increase in Dar es Salaam.

https://doi.org/10.1371/journal.pstr.0000077.s012

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Acknowledgments

We are grateful to EED Advisory for leading the data collection in Nairobi, and to the Environment for Development-Tanzania center for leading data collection in Dar es Salaam. We thank the Clean Cooking Alliance for useful comments on the survey instruments and data interpretation, particularly from the Nairobi study. We are grateful to seminar participants at Duke University, at the Environment for Development annual meetings, and at the annual Sustainable Energy Transitions Initiative conference, for their valuable comments that helped improve the analysis and work. All errors are our own.

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