Enabling urban poor livelihoods policy making: understanding the role of energy services. Synthesis Report.
The Goal of the research project 'Enabling urban poor livelihoods policy making: understanding the role of energy services' reported here is to contribute to reaching the Millennium Development Goal of, between 1990 and 2015, halving the population whose income is less than one dollar a day. Empirical data was collected from low-income areas in three countries: Nigeria (Lagos and Abuja), the Philippines (Manila and Marikina) and Brazil (Salvador).
Key findings of the project were:
- There is a strong linkage between household energy and informal sector enterprises particularly those owned and operated by women since many such enterprises are located in the household. Therefore, measures designed to support household access to clean energy can also benefit enterprises.
- While energy market liberalisation seems to have brought increased availability of petroleum fuels for low-income groups, the benefits in terms of electricity availability have yet to be realised. Utilities appear to be concentrating on dealing with illegal connections in a punitive way instead of developing creative policy of converting the illegal into legal consumers. We would wish to stress that increased availability is not the same as increased access. Price rises have clearly proved a significant barrier for converting availability into access.
- Price rises of petroleum fuels have had different effects on consumer behaviour depending on the length of use of those fuels. In Brazil, where fuelwood is no longer found in urban areas, there is no apparent transition down the fuel ladder. In the Philippines, where low-income consumers have strong rural links and access to fuelwood and charcoal, there is sign of a downward transition. In Nigeria where petroleum fuels are not generally used the oil price rises are blocking an upward transition from fuelwood.
- Energy price rises are affecting the viability of informal sector enterprises. A disturbing aspect has been noted in the Philippines were employees are reported (during focus group discussions) as being laid off as an economy measure in response to energy prices. There are also reports of businesses being closed because of price rises. Other entrepreneurs are reducing the quality of inputs and business expansions are being put on hold.
- The cost of transport has risen significantly due to petroleum price rises. This has had a direct effect on low-income households reducing their mobility in search of work and leisure. Their enterprises are also affected since transport prices also increase input costs and restrict travelling for selling products.
- General support to enterprises, not necessarily specific energy programmes, can lead to enterprises adopting modern energy, as was seen the Nigerian pottery sector and the Philippines micro-finance institutions. However, the nature of informal enterprises, for example, lack of legal registration and small turn over, can be a barrier to taking up micro-credit.
- Informal food vendors have key role in urban poor's lives both as providing a livelihood strategy and as having an influence on health of poor people who are increasingly using the sources as a coping strategy for reducing household cooking demands. In this context, the flavour imparted by the fuel used to cook food can be a barrier to the transition to modern, cleaner fuels.