Saving Africa's Tropical Forests Through Energy Transition : A Randomized Controlled Trial in Tanzania

Charcoal production to meet the cooking needs of urban households is one of the leading causes of deforestation and degradation of Africa’s tropical forests. We randomly distributed Liquified Petroleum Gas (LPG) stoves to urban households in Tanzania through subsidy and on credit to measure their impact on charcoal consumption and the corresponding reduction in deforestation and CO2 emission. We find that the treatment group reduced charcoal consumption by 30% 15 months after the intervention. This corresponds to an average reduction in deforestation of 0.04 ha/household/year or an aversion of 3.9 MT of CO2/household/year. The sub- sidy treatment group reduced charcoal consumption by a larger magnitude (34%) than the credit treatment group (25%), with the corresponding likely reduction in deforestation by 0.04 and 0.03 ha/household/year, respectively. However, the two treatment effects are not statistically significantly different. A social cost-benefit analysis suggests that the cost of both programs is far below the benefits of the averted CO2 due to a possible reduction in deforestation. We highlight the impor- tance of relaxing households’ financial constraints and improving access to credit to encourage urban households to switch to cleaner energy sources and save the remaining forest resources of Africa