Household Fuel Use and Fuel Switching in Guatemala

Household fuel choice in the past, has
often been analyzed and understood through the lens of the
energy ladder model. This model places relatively heavy
emphasis on household fuel switching in response to rising
incomes. This report views energy use through a household
economics framework. The household economics framework
clarifies that, in addition to income and market prices, the
opportunity costs of firewood collection also need to be
taken into account, in shaping demand for all fuels. The
opportunity costs of firewood collection are determined by
household cash, labor, land, and wood resources. Fuel
choices therefore need to be understood in terms of relative
household resource scarcities. The household economics
framework also makes it clear that it may be perfectly
rational for households to use a portfolio of different
energy sources at any point in time. The results of logit,
and multinomial logit regression analysis suggest that
expenditure, education, household size, region, ethnicity,
electrification status, and gender composition are important
in influencing fuel choice. Prices and opportunity costs of
firewood also matter. It remains intriguing that so many
urban households continue to use wood, which is not a cheap
fuel when it has to be purchased. Experience of household
energy use in Guatemala suggests that, as household fuel
policies elsewhere concerned with switching from biomass,
need to look beyond simple pricing instruments to a wider
array of policy options. Household energy strategies must be
based on the realization that large groups will continue to
meet their cooking needs with fuel wood for the foreseeable
future. Strategies therefore cannot rely exclusively on
inter-fuel substitution. A balance needs to be struck
between policies aiming at inter-fuel substitution, and
policies seeking to ameliorate the negative consequences of
fuel wood, such as improved stoves and better ventilation.
And, liquefied petroleum gas (LPG) needs to be targeted
primarily to areas where households rely on expensive
purchased wood.