The Political Economy of Household Thermal Energy Choices in Developing Countries. Comparing the LPG Sectors in Indonesia and South Africa

Wikus Kruger, Louise Tait, and Jiska de Groot

INTRODUCTION

The central role of energy in human and economic development is widely recognized (Hall, Lambert, and Balogh 2014). The United Nations has, for example, identified universal access to modern energy as a major policy goal; and sustainable energy has been a widely accepted pillar of the post-2015 development agenda (United Nations Foundation 2015). In the context of developing countries, access to modern energy sources often signifies a shift away from traditional solid fuels (such as wood), which cause significant health and environmental impacts, towards modern energy sources, such as electricity (preferably from renewable sources) and liquid petroleum gas (LPG). In 2014, for example, over 2.6 billion people had no access to clean energy, and used fuel wood and charcoal for thermal energy use (primarily cooking and space heating). The majority of these people live in sub-Saharan Africa (SSA) and Asia (IEA 2014). The resultant household air pollution kills more than 4.3 million people per year (Global Alliance for Clean Cookstoves 2015). Moving away from traditional fuels towards modern cooking and heating fuels is, therefore, a global development priority and a key component of energy transitions in developing countries.

Studies have identified that enabling policies have played an important role in increasing access to and utilization of a key thermal fuel—LPG—in developing countries, including, for example, Ghana and Senegal (Ahiataku-Togobo 2013;

Brew-Hammond, Mensah, and Amponsah 2014). These successes were not solely the result of enabling policies, subsidies, or economic drivers, but part of an interplay between policies, actors, and institutions, their values, and sociocultural and political factors more broadly, so that it is necessary to understand the prevailing political and economic processes that have affected these outcomes.

Residential LPG usage in South Africa is among the lowest in the developing world (Kojima 2011)—despite the country being one of the leaders in SSA with regard to improving energy access. While South Africa has a relatively limited residential thermal energy policy focus, Indonesia recently implemented one of the largest household energy transition projects to date: the kerosene-to-LPG conversion programme. The majority of Indonesian households switched from using kerosene (the major thermal fuel in most urban poor South African households) to LPG in a relatively short amount of time (Budya and Arofat 2011).^[1] It is useful to compare the South African experience with LPG with that of Indonesia, since both countries have a number of significant similarities:

• Indonesia and South Africa are both classified as ‘developing nations’ or ‘middle-income countries’, and characterized by good infrastructure (especially transport, telecommunications) and relatively high levels of industrialization.
• Both countries have significant mineral resources that provide(d) an important economic base for their development. These mineral resources continue to play an important part in shaping the energy and economic development trajectories of both countries.
• While they might not be ‘hegemonic’ powers as such, both are regional ‘powerhouses’, having the largest economies in their respective areas and the ability to steer regional policy.
• Both Indonesia and South Africa have recently established democratic political systems, coming out of several decades of autocratic regimes that followed the end of colonial rule.
• Both countries have had recent successful energy initiatives. Where South Africa has been remarkably successful in terms of its electrification programme, Indonesia has been particularly successful in terms of LPG provision. Various social grant mechanisms and subsidies are also used in both nations to provide public goods and services to the poor.

By exploring and contrasting the Indonesian experience with that of South Africa, the political economic factors that have affected the widespread adoption of certain energy carriers can become more visible.

[1] At the time this chapter was being written, Hanung Budya was Marketing Director of PTPertamina (Persero), and Muhammad Yasir Arofat was Senior Analyst Strategy Planning—Marketing Directorate PT Pertamina (Persero).

The Political Economy of Household Thermal Energy Choices in Developing Countries. Comparing the LPG Sectors in Indonesia and South Africa

INTRODUCTION

Energy Engineering for Developing Countries

The Political Economy of Clean Energy Transitions

The Political Economy of Energy Innovation

An Enquiry into the Political Economy of the Global Clean Energy Transition Policies and Nigeria’s Federal and State Governments’ Fiscal Policies

Renewable Energy in the Brazilian Amazon. The Drivers of Political Economy and Climate

The Political Economy of Clean Energy Transitions at Sub-National Level. Understanding the Role of International Climate Regimes in Energy Policy in Two Brazilian States

A Brief Political Economy of Energy Subsidies in the Middle East and North Africa

Macro and microeconomics are on the same level of generality with political economy (without identifying with it).

Resources and Perspectives from Media Political Economy