Targeting Clean Fuels: Pricing Strategies and the Distribution of Benefits in Periurban Ghana

Globally, nearly three billion people cook with traditional stoves and fuels. These inefficient and polluting energy sources produce one-quarter of all black carbon emissions globally. Household air pollution also represents the largest energy-related health risk, leading to nearly 2.3 million preventable pollution-related deaths per year. Recognizing these costs, the Government of Ghana has committed to giving 50 percent of Ghanaian households access to liquefied petroleum gas (LPG) fuel for cooking but currently lag behind in achieving this goal.

Previous efforts to drive clean fuel transitions by targeting subsidies to the poor have largely been unsuccessful. This project tests a novel and scalable approach that utilizes insights from second-degree price discrimination and ordeal mechanisms to balance the cost of subsidization with the social benefits of clean fuel use. Using a randomized evaluation, the project will evaluate the impact of targeting on overall LPG use and its cost-effectiveness, compared to the status quo. We will measure how impacts on clean fuel use translate into overall and gender-specific reductions in personal air pollution exposure. The results of this study will inform the Government of Ghana’s household energy policy, which focuses on improving the country’s LPG distribution system.

The project team includes PhD students Misbath Daouda (Columbia University) and Flavio Malagutti (UC Santa Barbara) and researchers Theresa Tawiah and Iddrisu Seidu (Kintampo Health Research Centre, Ghana Health Service).