The argument that fuelwood is not necessarily a preferred energy source but one forced upon the rural poor due to economic considerations, was mentioned briefly in the previous section. The main economic factors that drive the use of fuelwood in developing countries are the low costs of procuring fuelwood and the low income of consumers. Often the main cost associated with fuelwood collection is the opportunity cost of the time (which could be substantial) taken to collect fuelwood (Cushion et al. 2010) (Fig. 9.1). In this case, rural households can allocate scarce cash resources to other needs such as education of children, investment in agricultural tools and capital for income generation activities. Such cost savings would best be reflected by the replacement value of the energy sources that fuelwood substitutes, rather than direct cost of fuelwood (Shackleton 2004).

The commercial role of fuelwood can also be significant when community members supplement their incomes by selling fuelwood. Sometimes this activity even becomes their main source of cash. Notably, this includes also the poorest of the poor where many rural landless people are among those specialising in fuelwood production (Vedeld et al. 2004).

While it seems that when household income increases, people prefer to move up the energy ladder to other energy sources (typical scenario where fuelwood is seen as an “inferior” good), some researchers also report that fuelwood use increases with increased income for very poor households where fuelwood is seen as a “normal” good (Arnold et al. 2003; FAO 2005). Other social and environmental considerations

that might have an effect on household fuelwood consumption include climate (People might prefer to cook on fuelwood as it also provides heat for their house in winter (Chirwa et al. 2010)), access to markets and forest resources as well as health considerations (Exposure to indoor air pollution from biomass fuels is linked to many respiratory conditions and diseases (Cushion et al. 2010)).

The choice of energy source should thus be seen in the wider socio-economic developmental context and has various positive and negative implications for the user (mostly related to cost and convenience) as well as for the energy and CO2 balance of the country. Table 9.2 summarises the key implication related to each of the energy sources along the energy ladder.

When the cost of emissions reduction is brought into the equation, progress up the energy ladder becomes less clear cut. In cases where biomass is the least expensive source of fuel and is produced sustainably, traditional biomass energy use could result in much lower emissions than fossil fuel alternatives. In such cases it might not be beneficial from a national emissions point of view to promote coal derived electrification schemes but rather to focus on more efficient traditional use of fuelwood and sustainability of fuelwood supply (Cushion et al. 2010).

It is, however, also important to consider that the long term success of bioenergy programmes are linked to the socio-economic impact that it will have on rural producers of biomass. The socio-economic implication of bioenergy programmes has often been neglected in academic studies on the sustainability of biofuels. Most work focussed on the environmental implications and the interaction between the environment and economy while the social dimension remained weakly defined (Lehtonen 2011). The following sections of this chapter will consider the costs and benefits of bioenergy programmes to rural producers of biomass and users of bioenergy.