2.2. Methodology and Data Used in the Cost-Benefit Analysis of a Strategy for Adoption of Improved Stoves in Honduras
The methodology used to evaluate the cost-benefit of implementing a National Strategy for the adoption of improved stoves is based on using the LEAP (Software version: 2018.1.37, Stockholm Environment Institute. Somerville, MA, USA) software.
LEAP is an integrated, scenario-based modeling tool that can be used to track energy consumption, production, and resource extraction in all sectors of an economy. It can be used to account for both the energy sector and the non-energy sector, as well as greenhouse gas emission sources and sinks. In addition, LEAP can also be used to analyze emissions of local and regional air pollutants and short-lived climate pollutants, making it well-suited to studies of the climate co-benefits of local air pollution reduction [4
LEAP is not a model of any particular energy system, but rather a tool that can be used to create models of different energy systems, in which each requires its own unique data structure. LEAP supports a wide range of modeling methodologies [6
]. On the demand side, these range from bottom-up, end-use accounting techniques, to top-down macroeconomic modeling [8
LEAP’s modeling capabilities operate at two basic conceptual levels. At one level, LEAP’s built-in calculations handle all the “non-controversial” energy, emissions and cost-benefit accounting calculations [8
]. At the second level, users enter spreadsheet-like expressions that can be used to specify time-varying data or to create a wide variety of sophisticated multi-variable models, thus enabling econometric and simulation approaches to be embedded within LEAP’s overall accounting framework [8
In this study, LEAP is used for the calculation of the costs and benefits of implementing a strategy for the adoption of improved stoves in the urban residential sector (electrified and non-electrified), the rural sector and the commercial sector, with and without shares of Liquefied Petroleum Gas (LPG). The base year is 2016, and the target year is 2030. Variables were also established to be the most representative for the analysis of the energy sector: Population, GDP, income, households, GDP growth, population growth and demand growth.
According to the 2016 Honduras Energy Balance, the final energy consumption is 56.33% primary energy and 43.67% secondary. The final consumption of primary energy was divided into the main consumption sectors—residential, commercial and industrial. The share of each sector of primary energy consumption was determined as follows: the industrial sector with 13.17% energy consumption share, the commercial sector with 4.76% share, and the residential sector with 82.07% share. The latter value represents majority of the share.
The residential area was divided into urban and rural areas with shares of 54.1% and 45.9% of energy consumption, respectively. This energy consumption is driven by the factors of both rising household quantities and rising population.
Therefore, for both areas previously mentioned, the firewood consumption was taken. For the urban residential sector, 25% of households consume firewood, and for the rural residential sector, 77.96% consume firewood.
It is established that the traditional stoves account for an approximate 7.45 m3 yearly consumption of wood per household, and the improved stoves accounts for only 2.13 m3 per household.
For secondary energy consumption in the residential sector, the sector was divided into urban and rural areas, and each of these areas was classified into electrified and non-electrified.
Electrified zones use mainly lighting, cooling, and cooking. In the cooking section, LPG was added, which represents 42% of the energy used for cooking; an average consumption value of 300 pound per year was assumed considering that a 25-pound container is consumed in each home per month.
On the other hand, by considering historic consumption, it is assumed that under reference scenario the LPG consumption per households will grow 18.4% per year.
For the non-electrified area, only the kerosene for lighting and the LPG for cooking are considered. In this scenario, only the LPG consumption for food cooking is analyzed, mainly in the peri-urban area of Tegucigalpa, the capital of Honduras. In this category, the use of LPG will rise to 36.8% in 2030. This is due to an assumed National Policy by the GoH, aimed to encourage the use of LPG due to the increasing electricity tariff. Finally, it is considered that there will be no increase in the use of LPG in rural areas.
Three scenarios were used in the analysis, as follows:
Business as Usual (BAU)—a scenario in which the strategy is not implemented. This scenario does not consider the implementation of measures to adopt the new technology. Under this scenario, the government continues giving away the improved stove as it was mentioned in the previous section.
The scenario with a strategy. Under this scenario, improved stoves are introduced in the urban and rural households.
The final scenario analyzed is the introduction of improved stoves plus LPG.
By 2017, 583,295 improved stoves had been delivered, of which 20% have not been adopted by users (116,659 stoves). It is expected that by 2030, 1,125,000 improved stoves will have been already been installed, which implies that 658,364 improved stoves should be installed in that time.
2.2.2. Manufacture Costs
The manufacturing costs of improved stoves are as follows:
Urban households: Justa portable stove, USD 61.78.
Urban households: Justa 2 × 3 stove, USD 59.50.
Commercial: Justa 22 × 22 stove with flatiron, USD 108.16.
These costs are introduced into the LEAP model, in such a way that they were annualized throughout the analysis period. Thus, the following figures (Figure 4
, Figure 5
, Figure 6
) were obtained, which show the costs behavior from the base year up to 2030. It is assumed that a traditional stove has a cost of USD 34.00.
On the other hand, the benefits of implementing a strategy for improved stove-adoption are broadly known:
The improvement of air quality—a reduction in particulate emissions (black carbon) and smoke.
Reduction in fuel needs (saving time and money), particularly benefiting women and children who traditionally collect firewood.
The creation of new jobs in production, sales, marketing and distribution of improved stoves.
Reduction in pressure on the forest.
Health benefits as a result of the reductions in household air pollution.
Furthermore, before analyzing the cost-benefit of each scenario in comparison with the reference scenario, it is important to observe the energy consumption behavior of each scenario and contrast that behavior with the reference scenario, in order to have a better idea of what the implication of energy use in the cost-benefit analysis is.
Hence, the results of the energy consumption dynamics of each scenario are shown first. Then, the results of the cost-benefit analysis are presented.