Estrateji Enèji pou Fwaye ann Ayiti

Energy Sector Manag Assistance Programme Haiti Household Energy Strategy Report No. 143/91 .. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized JOINT UNDP / WORLD BANK ENERGY SECTORMANAGEMENTASSISTANCE PROGRAMME(ESMAP) PURPOSE The Joint UNDP/WoddBank Energy SectorManagement AssistanceProgmme (ESMAP)was launchedin 1983 to complement the EnergyAet Pogramm, established three years earlier. ESMAP'soriginalpurposewasto implement key recom ions of theEnergyAssessment reports and ensurethat proposedinvestments in the energysectorrepresented the mostefficientuse of scarce domesticand extermal resources. In 1990,an intemational Commission addresed ESMAP'srole for the 1990sand, notingthevital roleof adequate and affordable energyin economic growth,concluded that the Programme shouldintensifyits effortsto assistdeveloping countriesto managetheir enurgy sectors more effectively. The Commission also recommended that ESMAPconcentrate on maing long-termefforts in a smaller numberof e,ountries. The Commission's report was endorsedat ESMAP'sNovember 1990AnnualMeeting andprompted an extensive reorpaniz on andreorientation of theProgrmme. Today,ESMAPis conducting EnergyAssessments, performing preinvestment and prefeasibility work, and providinginstitutional and policy advice in selecteddevelopingcountries. Through these efforts, ESMAP aims to assist governments,donors, and potential investors in identifying, funding,and implementing economically and environmentally soundenergystrategies. GOVERNANCE AND OPERATIONS ESMAP is governed by a Consultative Group(ESMAP CO),composed of representatives of theUNDP and WorldBank,the governments and institutions providingfinancial support,and representatives of therecipients of ESMAP'sassistance.TheESMAPCOis chairedby the WorldBank'sVicePresident, Operations and SectorPolicy, and advisedby a TechnicalAdvisoryGroup (TAG)of independent energyexpertsthatreviewstheProgamme'sstrategic agenda,its workprogram,andotherissues. The Managerof ESMAP,whoreporti to theWorldBank's VicePresident,Operations and SectorPolicy, administersthe Progrmme. The Manageris assistedby a Secretariat,headedby an Executive Sertuy, whichsupports theESMAP COandthe TAGand is responsible for relations withthe donors andfor securing funding for theProgramme's activities.TheManager directsESMAP'stwoDivisions: TheStrategyandProgm Divisionadviseson selection of countriesfor assistance, carriesout Energy Assessments, ppares relevant programs of technical assistance, andsupports theSecretatiat on funding issues. TheOperations Divisionis responsible for formulation of subsectoral strategies,preinvestment work,institutional studies,technical assistance, andtrainingwithintheframework of ESMAP's country assistance programs. FUNDING ESMAPis a cooperative effort supportedby the World Bank, UNDP and other UnitedNations agencies,the European Community, Organization of American States(OAS),Latn AmericanEnergy Organization (OLADE),and countriesincludingAustalia, Belgium,Canada,Denmark,Germany, Finland,France, Iceland,Ireland,Italy, Japan, the Netherlands,New Zealand,Norway,Portugal, Sweden,Switzeland,the UnitedKingdom, and the UnitedStates. FURTHERINFORMATION For fih information or copiesof completed ESMAPreports,contact:- The Manager or The Executive Secretauy ESMAP ESMAPConsultative Group The WorldBank TheWorldBank 1818H StreetN.W. 1818H Street,N.W. Washington, D.C. 20433 Washington, D.C. 20433 U.S.A. U.S.A. HAITI HOUSEHOLD ENERGY STRATEGY DECEMBER1991 FIXCLANGE RATE US$ 1 ourdes S.0 a Hatan $1 USS 1 = FF 5.8 CONVERSION FAC?'ORS LPG 0.55 45.7 Kerosene 0.8 43.5 Diesel 0.84 433 Wood(air dry,20%humidity) 0.7 17.0 Chara (10%humidt 29.0 Bagse (50%humidity) 7.5 Fia Enera 86 Primy EnerV 283 Otm 1 US Gallon - 3.785 ter I barrl 159 liters 1 TOE -41.87 0J o 10 mMioncal CUarwa poduction eiiency - 20% (in weight) 1 stere of wood -1 il (staked) * 0.6 m3 (roundwood) 1 cureau = 129 ha ACRONYMS ANDABBREVIUTIONS AFVP Association Frangaie des Volontaires du Progr&s AOP Agroforestry Outeach Project RAPP Bureaud'Approvisionnement en ProduitsP6troliers BDPA Bureaude D6veloppement de la Production Agricole B1T BureauInternationalduiTravail BME Bureaudes Mineset de l'Energie BRH Banquede la R4publique d'Halti CPNAP Commbsariat & a Promotion Nationaleet t l'Adminition Publique DR1E Diecton des Ressources Energdtiques (BME) EdH Electricit6 da ESMAP EkergySectorManagement Assitance Progmme FAC Fondsd'Aideet de Coop6ration FAO Food and Agricl Orgnization FEPP Forety and Enironmental ProtectionProject OoH Govenmuent of Haiti IDA interational Development Association LPG Liquifled PetroleumGas MARNDR Mlniste de lAgdcultur; des Ressources Naturelleset du D6veloppement Rural ODH OperationDoubleHarvest NOO Non Governmental Organization OLADE Latin Ameican EnergyOrganization TFAP TropicalForestryActionPlan PFN Proet ForestierNational UNDP UnitedNationsDevelopment Program !EI Renewable EnergyDevelopmentnstitute SRF Servicedes Ressources Forestieres TOE Ton Oil Equivalent USAID United StatesAgency for International Development . . . . . . . . . . . . . 2b . . . . .: .:. . .:.:. . . . . ... . .. . ... . . . . .. .. . .. ... .. .. .. .. . .. . . . .- . ........ .. ... . . . . . . . . . . . . . . . . . . . . . . . . * . . . . . . . . . - . . : :~~~~~~~~~~~~~~~0 . . . . . . . . . . . . . . . . . . . . . . . . . . . .. co~ * 0. * .... - a iFzg~~~I ~~~.~ .......- .--.- - . . ...... .. *a.*-................... ............ R. II. T E STRATEGY ................................................... 33 A . Interventions on Woodfuel Supply ............ .............................. 33 Current Economic Situation of Charcoal Exploitation ................. 33 Modlernizng theChbarcoaSector .. * *.....*....................................... 37 Geographic: Reorientationof Charcoal Offtake ...................... 38 todernization of Supply Netvorks .......... ............................... 41 Improving theCharcoal Taxation System .............. . ........... 42 B . Demand-Side Interventions ............................................... 44 Economlc Conditions for Charcoal Substitution ........................... 44 Comparative Fuel Prices .................. 4**.4..* *.. ......... 44 Real and Theoretic Economic Costs of Cooking Fuels ................ 48 Impact on the Balance of Payments . ............................ . 49 7no Market for Fuels and Stoves.............................................. S0 CufrentUsersof ImprovedStoves, Gas Stovesand KeroseneStoves ...... 50 Consumer Accepta e of Different Stoves and Fuels ...... ............ 51 Potential Markets for Stoves and Fuels ........................... 52 Gas Promotion .......... . * .......................... 54 Energy Conservation ............................................... 57 Substitutionand Conservation: Discarded Options .............. .......... 58 Leam-Pronising Short Term Options ............. ................... . 58 Secondy Options ... ........................................ 59 TV. ST TEGY COMPONBNI . ......................................... 62 ening the Gas Market ............ ................................ 65 Charcoal Conservation ....................... ...................... 67 ModoIern fDizngie liarcoalSectr .................. .................... 70 Supply bLu{aser Plan for Port-au.Prince .............................. 71 Assstmazce to Chasrcoal odue .......... * * * * * ........................ 72 onitoring tie Strategy .................. .......... 74 Eomoniic Aspects ........................ .................. 76 Strate Costs 4444444444 44444444444......... 44... 4 44.......4........... 76 Financa and EAononic nalysis . ............................... 77 Rik ..................................................... 79 Financing .................................................. 80 TABLES 1.1 Final Energy Balance, 1985 . . ...... . . . ........... . . . . . . . 3 12 Woodfuel Conasunption in Haii 1990 ....................... ....... . 4 1.3 CookingFuel Use in Port-Au-Prince according to Living Standard Quintile (in percentage) ................................ 6 1.4 Cooking Equipmentin Port-au-Prince in percentage ofotal Househlds..............444.4.44..... 7 1.5 Bloman Standing Stoc in 1988 .. ........ ... 10 1.6 Charoad rea post counted in Port-au-Prine ........................... 11 1.7 Production areas ofcharcoal since 1979 in percentage .................. .... 13 13 Charcoal price swr ture ......................................... 14 19 Clsrwltaixrevenues .............. ...................... ..... 17 1.10 BIP price ....... .................................. ... 22 3.1 Compared Costs of Cooking Port-au-Prnce,1990 ....................... 46 32 Cos.s of Importing Gas and Kerosene ..... ................................. 47 3.3 Comparison of PropanePriceSuctures in Haiti and Dominican Repubic ............ ................ 44.... .. 48 3.4 Compared EconomcCostsinPort-au-Prince, 1990 ........................ 49 3.5 BipTichri'sshareofthegasmarket in thousands of households ............... 50 3.6 Reints ofthemarketstudylnPort.au-Prince ................ . 40 ...... 53 4.1 SummarizedBudget of theStratey,s Compov'.nts ......................... 77 4.2 Fiancial Analysis ... ..... *4444*44.. . *. .. 4*. . .4*....4..*. . 78 4.3 EconomicAnalysis .......... 4.. o4.. 4 ... 4 79 FIGURES: 1.1 Charcoal SupplySystemsin Haiti accordingto Stevenson (1985) 12 3.1 Owcoal price * 1953-1990 Trend ...... . ...... ... . ...... . . 34 3.2 ProducersShareofCharcoal Price -1979-199OTrend ...................... 35 33 Main ChaacteristicsofCLarcoalProduction .................... 40 3.4 Costs of Cookingwith Charcoal Keaosene and Gas . ..... ..... 45 4.1 Epeded Impact ofthe StrateVU . . ... ... .... .... ......... . . ... 64 ANNEXES: L Foresty Resourcs and Deforestation .. ........... .. 82 IL Energy Prices in the Cariean and Central A aerica. .................. 90 W.. Cookstoves i use n Haiti .................................. 94 Iv. Volumes of Charcoal Entries in Port-au-Prince . ... ... 4.. ... 4...4.. 99 V. Price Strcures of Charcoal, Gas and Keroene ....... .............. 100 VL Fiancial and Economic Coss of Cooking ............................ t 104 VIL Factor Analysis of the Household Survey .................. .. ...... 111 VIII. Market Study for Household Fuel ... . . ............................ 116 IX Projected Consumptions (Trend and Strategy) . ...... 124 X General Data ..... 4.. ... 4................ ..... 127 XI. Short-Tern Actions.......... ........ o .................... 144 XIL EconomicCostofCharcoal ... ...... 149 XIIL Reports andStudies Canied out .......... 4.............. , .......... 156 TV. Budget of the trt Coponents ..................... .............. 158 MAPS IBRDNo.23061 - Haiti Progessionof CharcoalPoduction Areas IBRDNo.23062- Haii, Charowal Production Areas IBRD No.22676- Hait5 Forestryand Environmentad ProtectionProject FOREWORD Thisstudywascompleted as an activity of the Joint WorldBank/UNDP/Bilateral Aid Energy Sector Managem.ent Assistance Program (ESMAP). Financingfor the study waa providedmain by the N.3rweglan Government, aswellPsby UNDP,the FrenchGovernment and the Jai.-neseFund. The studywasimplemented withthe assistance of and in closecoordination withlie BME/UNDP/OLADE EnergySectorStrengthening ?roject (HAI/89/031)and withthe teams involvedin the preparationof the IDA financedForest and Environmental Protection Project ESMAPand its consultants workedwith their main counterpatv, tde Bureau of Mines and Energy(BME)as wellas wil the Forest ResourcesSevice (ERS),the Bureau for PetroleumProductSupply(BAPP)and the main Haitianorganiztions operatingin the sector. The study coordinatorin the BME was LoctamardAntilus,Director of Energy Resources.NicoleDieudonne, GuilenAurelien and NaquinMedinaalsoparticipated in the study. violette Derosierswasresponsible for svey data entry(carriedout at the BME),with assistance from Marie MercieDieujusteand EunideGermain. The main authors of the following report are PhilippeDurand (Task Manager, ESMAP)and MichelMatly(EnergyEconomist, coordinatorof the consultant team). The study team indludedJocelyneDurany-Jakob and Carole Roy (Consultants,Sociologists), Jos6phine Arpaillange (Energy Statistician, ESMAP), Chrsa Bonaparte (Consultant, Marketing Specialist), CAlite Cldrism6 (Consultant, Sociologist) and KevinFitzgerald (EnergyStatistidan,ESMAP), as wellas aboutthirtypresentersand pollsters. Thi studyis basedon a majordata collection effortcomprising both quantitative and qualitativeinformation collectedfrom December1989to May 1990. Duringthis time, the folloig main suveys and in-field inquiries werecarriedout: household surrey,marketpols and *uveysof smallbusinesses in Port-au-Prince; surveys ofcharcoal retailersandtransporters in Port- au-Princeand in the main cities;sureys of rural merchantsand charcoalproducersin the main areas whichsupplycharcoalto Port-au-Prince; counting the numberof charcoalentries at Port- au-Prince(see AnnexXM). EXECUTIESUMMARY 1. Haiti's environment is undergoing a gradualp-ocessof severedegradation, which hasimmediately perceptible andsometimes irreversible effects, secialy withregardto lossofsoils and decreasngagricultural yields.Eventhoughthisenviromentalproblemhasarisenpartiall due to multiple non-energy factors (demographic prassures, agricultwal techniques, irregular landtenure practices), the factremainsthat woodfuel consumption, especialyurbancharcoal consumption, is a majorcontributor to deforestation.Tbis is not a newlynotedphenomenon:expertshave cited it for more than a decade. Howeverduringthat time, no coherent,comprehensive programhas been proposed or undertakenby the Haitian Governmentwith assistancefrom international development agencies. 2. It is signficantthat in Haiti - frequently cited as one of the countriesin the world whereenvironmental desuction has reachedan alarming phase - there is no recent inventory of forest or biomassreources, nor any serious analysisquantifijngthe extent of deforestation. Withoutfundamental data neededto accurately evaluatethe currentstateof the biomass stockand its annual growth,alarmistaccountsof the approaching demiseof the last Haitian tree persisL Independently ofthe uncertainties surrounding wood-energy supply potential, deforestation in Haiti is an inconttabe reality;it is therefore importantto reduce the pressureon forest resources generatedby woodfuel consumption, especiall charcoalconsumed in Port-au-Prince. Reforestation d ManagM Fofreist Rmmu 3. Theonlynational-scale projects relatedto this problem havebeen carriedoutby the private sector. They comprisemainlythe agro-forestry tree plantingprojects run by non- governmental organizatonsoperatingthroughoutthe country. Althoughthese plantatins are expnsive and theiroverallsuwesshas been relative,severalmillionnewtrees growin Haiti each year as a rest of these efforts. An additonal advantageous outcomeis that tree plantinghas boeomeingrained intotraditional peuant practices However, tree,plantingeffortsrepresentonly partialsolutions to Hait*sdeforestation problem.Basedon the latest analyses of deforestation, at least23 million surviving trees wouldneed to be plantedeachyear,i.e.nearly10timesthe current rate, in order to reversethe destucion of nationalforestresources. 4. Publicmn ent of forestresources, already relatively ineffective, has continued to Wons In 1986, a newstagewas reached: monitoring offorestexploitation disappeared almost totalDy. Sincethen, charcoalexploitation has spreadthroughoutthe country,startingfrom areas where lage-scle production wasalreadythe nonn, so that nowalmostall regionsof Haiti market charcoalfor the capitaL In someparts of the country, parularly alongthe aiorthwest peninsula, v i. charcoal production playsa majorrole in the rural eco:aomy and has becomean importantsource of incomefor numerous peasants. 5. The large scaleplantationsapproachhas been abandonedbecauseof the lack of financial piofitabflity whichin turn promptedlandholders awayfromthis option. Also,investments for reforestationand forestryresearchunder the NationalForestryProjecthave producedonly minor results relative to the deforestationproblem. The project achievedsomewhatlimited progress withincreasing the effectiveness of forestrycontrol; but the ForestryService stillmonitors only 10%of the charcoaltrade. Management of Household En,r Demand 6. Several projects haveaddressed the problem ofcharcoal conservation (BME, NGOs). Resultswerenegligible dueto the smal sizeof the projects, lackof resources and dispersed efforts. Althoughstudiesshowthat the charcoalcookstoves currentlyin use are highlyinefficient, there havebeen no commercial-scale promotionof improved models. 7. The initiativefor developing charcoalsubstituteshas been taken by the pri:ate sector,whichintroducedportablebutane gas stoves(Bip Ticheri) and engagedin large-scale publicitycampaigns to promote this fuel. The Government assisted private sector efforts by decontrolling gaspricesand app.ying favorable foreignexchange conditions to fuelimportsin 1987, wih extension of the sameconditions to the import of Bip cookstoves in 1989. Costsof Household Fuels 8. Extensive use of charcoalin Haiti's cities is, to a very large extent, an indirect consequence ofthe highgasprces whichresultfromcurrentsupplyand distnbution arrangements. In fact,the Haitiangas marketis a de facto monopoly, characterized by smalland oftenoutdated instaflations and gas prices amongthe highestin the Caribbean, if not the world. It is a captive marketfor the petroleumcompany whichholdsa monopoly overthe entire supplyof gas - from gas purhases on the internationalmarketto retaildistribution. 9. Under the currentsituation - no other supplyalternatives, decontrolled gasprices, no taxesor tariffs- the offiial gaspolicyis prejudicial againstthe State itseW, depriving it of much neededresources.Thispolicy coststhe economy about$25 million annually, has no directbenefits to the consumerand onlymarginally providesincentives for the use of g's as a charcoalsubstitute. Under a more norral price structure,the gas couldbe lightlytaxed,and the suppliermargins wouldbe reducedso that the finalprice is muchless costlyfor the consumer. 10. Analyses showthat undernormalconditions of supply, gasbecomes the bestfinancial optionfor the consumer and the best economic optionfor the country. Marketstudiesunderscore that gas is alsothe fuelwhichis most likely to sucessuly substitute for charcoalin urbanHaitian lv- households:the market potenW'al is for conversion of 25%io 50% of households In the capital depending on whichpricingassumptions are retained,as comparedto a potentialmarketshare of le than 10%for its direct competitors, keroseneand electricity. The upper estimate,50%,is substantially bhiger than the current rate of market penetration: only 15%of Port-au-Prince households use as as the onlyor primaryfuel However, this is far belowthe estimated70% uthiation rate by households in the capitalof the Dominican Republic, thoughthe fuelis heavfly subidized(and the price of charcoal is two timeshigherthan in Haiti). 11. The household energ sector is in complete economic disequilibrium and thusrapid interventionis needed. Peasant charcoalproducerssubsidizeurban consumerssincewood is acquiredat a pricefar belowits replaceme"nt cost - priceswhichreflect a "mining" mentality in the exploitation offorestryresources - therebycontributing to degradation of the environment andthe rural economy.International organizations subsidize reforestation activities and evenpart of the operadngcosts for the forestryservices, whileelsewhere ineffective collection of charcoal-related ues representsa recoverable lossof nearly$1 millionannualy. The publicauthorities subsidize the gas sector to a considerable extent throughits favorable import policies;unfortunately, no benefitsaccrueto eitherthe consumer or the State,even thoughthe State itself is sorelyin need of more sourcesof operatingrevenues. 12. The primaryobjective of any intervention in these areasis to gradually restorethe financial and economic equlibriumsin the sectorthrough:lowering significantly the priceof gas; allwing charcoal pricesto increasesubstantialy; introducing mechanisms for the State to generate rvenues from the marketingof both fuels, sufficientfor financingoperations and partal Investments by the publicentitiesresponsible for managing the sector. 13. Interventionalso willbe centered onlyon severalmain themeswhichrepresent importantstakesfor the counttyand whichare likelyto have significant impacts. These themes wil be addressedin a manner so that the scaleof intervention willhave nationalimpacts. 14. Intervention requiresthe State to affirmits political willingness to act at the highest levels,and to make a more accurate accounting of its strengthsand weaknesses, by seeking intervenon of eising non-governmental and privateentities,and by negotiating whennecessary withthe localpopulations. 15. Finally,interventionin the householdenergy sector must be designed as a contribution to solvethe problemofenvironment degradation.A household energy strategy would thereforenot hinderbut rather complement and reinforce the countrysglobalstrategyfor natural resource management -V. 16. Theproposedstrategy containsmeasura designed.to effectively redressquickly the currentdramaticsituationin the sectorby intervening on four levels- the four components of the rdcommended strategy: a. openingthe gas market, b. generating charcoalsavings, C. modernizing the charcoalsector, d. sector monitoring and evaluation. 17. Te frst m of th_. opening the gasmarket,wi createconditions for real competition in the gassector,thus producing downward pressureon the gas pricesto the benefitof consumers It alsowillfacilitate accessto gasas a primaryfuel and to gas appliances by the lessprieged classes(middleclassesand upper levelsof the poorer households).Thiswill be accomplished by eitherinstalling newreceivin& storageand filling in or by elarging exsting inftucture, with possiblytemporary recourse to gas imports supplied from the Dominican Republic. The variouspibilities of partnershipsbetweenprivate or institutional operators,both local and foreign,shouldbe studied,as well as the legaLregulatoryand fiscal aspectsof the prerequisites and consequences of partnership choices. 18. The secondcomponentof the strategyis the lgW-scaledistribution of improved wcoal stves in Port-au-Prince and in the four major secondary cities in Haiti In fact, even under the most favorable assumptions of subituto by other fuels,the proportionof households which willcontinueto use charcoal willremain ignificant: aboutone in everytwo,on averagein the major cites. he distibuton wil target householdusers of round stoves and "potaje" cookstoves, as wellas snall roadsidefoodvendors("manjekwit'). A total distrbution of 80,000 stoves i8 anticipatedat the end of three years 19. The third componenttargets the reorgpnization and.ratonalzaton of charcoal exploitation. Charcoalexploitation willbe redistrbutedgeohicall throughthe use of regional production quotas, which willensurethat charcoal production is carriedout in areaswherethe risks to the enionment are acceptable. The component wi help the Haitian Government to more effectiey controlthe flows of charcoal, especially for marketing in the capital,and to collect taxes associated withcharcoaltransport. The component is basedon definiton and implementation of a SupplyMasterPlanfor Port-au-Prince, strengthening and improvement of controbon charcoal transportand of the tax colection system, contribution to defininga priorityrural development progrm to compensate localpopuationsfor losses generated by application ofcharcoal quotas, and -vi- implementatonof an assistanceprogram for charcoal producers in zones where charcoal exploitation wil continue. 20. 31Mfourth coment indudes creationof a SteeringUnit for the strategy. The Stering Unit wl asre permanentsupersion and coordination of the householdenergysector and wil assurecooperation betweenthe varioussectorparticipants, as wellas coordination and evaluation of activies carriedout as part of the strategy. In order to promotecoherencein the sector,the SteeringUnit wil also overseeadjustments to pricingand fiscalpolicyand legislation cmoening the differentfuels. At the fiscallevel,the strategyincludesimprovedcollection rates for charcoal preos and a nowtax on the priceofgs oncethegas price structurehas been revised so that gascan be distributed throughout Haiti at lowerprices(para. 16). 21. Themain outcomes of the Strategy wfllbe to stabilize charcoal consumption in Haiti and to gradually transformas muchcharcoalproductionas possible into a sustainable, financially profitableand envionmentalybenip economic activity.Specific outcomesfor the strategyonce the four components havebeen implemented are the following: a. gradually incrase in the proportionof urban consumers usinggas as the primary fuel,witha targetpercentage of 35% of Port-au-Prince households in 1996 and 50% in 2001(10%and 20%respectively in other cities); b. developmeat of gs consumption from7,000tons at present to 23,000 tons in 1996 and 41,000tons in 2001; C.X ue of improvedstovesby one of everytwo charcoalconsumers in Port-au-Price by the year 2001; d gradualdrop in charcoalconsumption (and thus decreasedpressureon national forestresources) by 43%ofprojected 2001consumption, throughsubstitution by gas and distribution of improved stoves. i. mprovement ofconditions for charcoal production and rationalizaton of the acce to forestresourcesin the maincharcoaleploitation diticts (Supply MasterPlan for Port-au-Prince), includingimprovedtax polcy and better enforcementof regulations concerning charcoal commerce (taxcollection ratesfor charcoal tranwport to g from 10%in 1990to 60%in 1996); f vocationa taining and assistance for developing professionalism among500small- scalecharod makers vii - 22. Tho impactsof this strategyon the nationaleconomy are the folo.wing a. relativeincrease in petroleum productimportsof 12%by 2001,all otherthingsbeing equaL This is equivalent, in termsof the currentlevelof ternaltrade, to 4% of the countriestotal exportsL b. incomegenermted by charoal exploitation in the main production zonesto remain constant(or, undernormalconditions, to increase due to effortsto increasethe real producerprice). Cot and FEnancing 23. Implementation costs for the strategytotal USS 10.5mfion over the 1992.1994 period: USS0.8 millionfor the stove distribution progam, (whichis included in IDA!sForestty and EnvionmentalProtectionProject)US$1.4 millionfor modernizing the charcoalsector,USS 7.5 millionfor petroleuminvestments (ir 't private),and US$ 0.8 millionfor monitoring and evaluation.Total recurrentcosts are estimatedat US$900,000 over the period 1995.2001. The simplffied economic and financial analysis givesa financial IRR of 10%and an economic IRR of 40% for the period 1992.2001. 24. Considering the urgency of implementing the Strategs components, obtaining the necesay funding should be among the Government'spriorities. Several bilateral donors traditionally activein the energ and foresty sectorscouldbe approached, suchas France,Canada, uSAYD and Germany. Other resourcesmightalso be tapped,suchas the Haiti Economicand Socal Fundin the recently-reatedGlobalEnvironment Facility. L OVERVIEW Genra Socio-Econemic Osve Dtioationu of the Eggffi= 1.1 By far the poorest country on the Latin American continent,Haiti has been in the midst of a sustained economic and social cisis for over a decade. Tis crsis is manifested by a continuous decline in per capita GDP averaging1 to 2% per annun since 1985 and estimated at nearly 4% in 1989. The drop in GDP has had repercussionsin all economicsectors. The decreased demand for imports, associated with the economic slowdownand the resulting reduction in the population's purchasingpower, has been totally offset by declining exporis, decreasing of foreig aid and the loss of tourismrevenues. Thus the trade deficit,whichwas about 40% in 1989,remains substantiaL In the formal commercialsector, the level of salaried employmenthas continued to drop: accrding to the National Bank of Halti (Banque de la Rpublique d'ati - BRH), the number of employees in the formal sector declined by 10% between 1986and 1989. The effects of the crWis have not spared the informalsector: during the last three years, about 20% of the 3300 mini and small business located in the capital have been forced to shut down. Declininfof Purchasin Power in Urban Areas 12 Inflation was relatively moderate until recently but now is on the rise; officially estmated at 7%, actual inflation figures were in the range of 15 to 20% in 1989. The prices of most basic products have increased substantialyr. food products such as oil, meat, eggs and sugar rose by 30 to 80% between February 1989 and February 1990. Construction materials Otso increased by 25% during the same period (30% for timber alone). By contrast, the minimum salay in HaIt4 (H$ 100/month) has not changed since 1984. A progressiveweakenin of HaIti's crrency is linked with this inflation. At the beginning of 1990, there was a 40% differential between the nominal rate of exhange (5 Gourdes per $1) and the actual rate offered on the paralel market. There results a continued erosion of purchasing power in urban households, particuarly among the middle dasses, whether it be for purchases of imported supplies and products (automobilepurchases, for example,have dropped from nearly 6000 in 1985 to 2500 in 1989)or more simplyfor purhases of local products Acity Slowdow in Rural Areas 13 Agriculural actiy has been on the dedline for several years, as evidenced by a decrease in its value added ir 1989;in conatant terms, value added already had fallen by 10%from 1986 to 1989. Agricutural activity decline is parwtiuly noticeable at the level of crop exports for products sch as cocoa (production was halved between 1985 and 1988) or sugar cane (productionwent from 2 milion tons in 1985 to 350,000tons in 1989). Inflation coupled with a decline in international market prices act as disincentivesto ural producers:the tendencynow is 2- to moveawayfrom eport-oriented cashcrops and raise foodcrops instead. The eradicationof pigs also has deprivedthe peasantsof one of their rare sourcesof monetatyincome. Marketed productionand monetaryincomein rural areas thus have been reducedconsiderably, producing infi4tionaty rcions on the pricesof productsflowing onto the nationalmarket. 1.4 With an estimatedpopulation of 5.8 millionin 1990, Hait has a population density of 215inhabitants per bnm, one of the highestin the hemisphere.Thiscreatesa growing pressure on the environment due to demandfor newagricultural land. Evenso,the annualgrowthrate for the rural populationis estimatedat only0.7%for the period 1982-2000, whilethe growthrate for the urbanpopuationwouldreachnearly5% duringthe sameperiod; the capital,Port-au-Prince, representsnearly20% of the total population. This urban population, most of whomconsume charcoa, thus constitutes a rapidlygrowing threat to the environment 3b E3n=agSector E=Wa BDemand 1.5 Per capita conumptionof commercial energyin Hait is amongthe lowestin the worldand certainly the loweston the Latin Americancontinent. Estimatedat 1.8 barrels of oil equivalent (b.o.a), annualper capitaconsumption is onlyhalfthat of the Dominican Republic, one third that of Jamaicaor Barbados,and one quarter that of Cuba. These comparisons are even more strikng fqr elecicity consmption,whichmeasuresabout 51 kWh per capita annuallyin HaKitversus430 kWh in the Dominican Republic, 510 kWhin Jamaica,and 1410kWhin Cuba. Only a fractionof Haiti's population hasaccessto =ommercial energy,kerosene, used for lighting, is the onlyfue in widespread usage. Gas 1/ and electricity are usedby a verysmallsegmentof the population,almostacc*el in urban areas (the nationalelectrification rate is less than 15%). 1.6 The most recent energyconmption data (for the year 1985)are summarized in Table 1.1. Residential energyr cWns on representsmore than half the total energydemand, followed by the commercial sector(21% of nationaldemand),industryand transport. The table emphasizes the preponderance of the woodfuels sector in nationalenergysupplyfuelwood, which by itselfrepresents70%of the nationalsupply, charcoaland sugarcanebagasse. Haiti currently is more than 80% slf-sufficientin energydue to residentialuse of woodin rural areas and of charcoal in urbanarea StiDl, it alsoshouldbe noted that fuelvood,bagasseand,to a lesserextent, charcoal are usedlargelyby the industrl sector;thus thesefuelscumulatively represent63%of energ consumtion by industry. 1/ References to gas in this rMpr impl LiquidPetroleumGas (LPG). .3. Igkl 1 .ls Final tnwry _orution, 198 (1000 TOE) Residential Indtry Transport Corceial Pubtlc Toxal Cost 36.S 36.5 Petroltepro icts 17.4 49.0 121.5 187.9 LPG 2.7 1.2 3.9 Electricity 10.1 11.1 1.2 3.1 2S.5 Charcoal 88.9 1.5 90.4 Fualwood 635.1 49.8 286.S 971.4 Sao"" 86.0 86.0 TOTAL 754.2 233.9 121.5 287.7 4.3 1401.6 1.7 Several srveys and evaluations by the BMEandwithinthe fameworkof this study show the breakdownof charcoal and fuciwoodconsumption by categoryof consumer. This breakdownis presentedimTable 12, whichshowsboth the levelsof woodfuel consunppdon and their equivalent in terms of woodcuttin& One wi note: (a) the importnce of charcoal which is ony consumedby less than 30% of the populadon,but represents40%of the demandfor wood, (b) the importanceof non-residential charcoal onumption, estinated to represent 20%of the total dharcoal consumption, (c) the importance of Port-au-Prince for cbarcoalconsumption; withtwo-thirds of the naon con -4. Tabte .2': Voodfuel Consuption in Haiti, 1990 Charcoal Woodfuel Vood equivalent (1000t) (1000t) (1000t) (a) (1000.3) (b) Port-au-Prince Households 160 800 1,143 21 Informal sectors, others 40 200 286 5 Bakeries/dry cleaninw 20 20 29 1 sub total 200 20 1020 1458 27 Other urban HouseholdsZc) 65 30 355 S07 9 Informal sectors, others IS 75 107 2 Bakeries/dry cleaning 20 20 29 1 sub total 80 50 450 643 12 Rural Households- 2100 2100 3000 56 aSuldivas 130 130 186 4 Oil factories 30 30 43 1 sb total 2260 2260 3229 61 Total HaNit Households 225 2130 3255 4650 87 others 55 200 475 680 13 Total 280 2330 3730 5330 100 jggess (a) Charcoalproduction efficiency estimated at 20X (in weight). (b) Wood dnsity estimated at 0.7 tons/i3. (c) 905 of households use charcost. firews &Surveys of ESIAP/D1E/OLADE/PID, 1990(Annex IX). Revised BNE data (1987). n2 XLgi of PetroleuImn 1.8 Despite the dominanceof woodfuelin the national energybalance,petroleum importsrepresenta considerable weighton the Haitianeconomy.Petroleumimportsamounted to nearly50% of totale portsin 1982, whenoil pricespeaked. After fallingsharplyto just 20% in 1987, the ratiobetweenoilimportsand totalexports hasbegunto increase once again, due partly to the continued erosionof export of goodsand services and partlyto the sustaineddemandfor energy(AnnexX). 1.9 Thus in 1989,the energybill absorbedmore than 30% of the countys export revenuea Keroseneand LPG represent 10%in volumeand about 20%in value of all petroleum productimportsto the countiy. Although ps consumption is verylimited(about 10,000 tons in 1989),the value of gs importsalone is equWalent to 4% of the total valueof HaIti' eports Cats of Commial Enery in Hati 1.10 One of the reasonsfor lowconsumption of commercial ener is withoutdoubtthat Halti is one of the Central Americanand Canibbean countrieswhere petroleumproductsand electricity are most expensive. A comparison of prices in Haiti and the DominicanRepublic demonstrates this: eventakinginto account the overvaluation of Haitiancurrency ( a 40%margin estimatedbetweenthe official market rate and the parallelrate relativeto the dollar),the price of keroseneand dieselare abouttwotimeshigherin Haiti, that of electricity three times,and LPG prices nearlyfive times higherthan in the Dominican Republic(see AnnexII), where LPG is heavily subsidized. 1.11 Conditions for marketing anddistrbutionare suchthat majordifferentials alsoexist betweenthe economiccost of the variousfuels in Haiti and in other Central Americanand Carbbeancountries.TI is particularly true for LPG,a fuelwhichis not undergovernment price controt Householdand SmallIndut Consumtin in Urban Area =naeidetal Conumotion 1.12 Tle categorization ofPort-au-Prince households by fuel (primary and secondary) is summarized in Table 13. Charcoalis the most utilizedfuel, consumedby 90% of the capital's households.The most affluentclases are abandoning the use of charcoal(onlyabout2/5 of the 20%most affluenthouseholds use charcoalas their primaryfuel). Thosewho consumecharcoal only(62% of the population)use about 0.44kg per capita daily. Takinginto accountsecondary uses of charcoal,daily per capita consumption in the capital for all householdscombinedis estiated between0.36kg (basedon weighin auried out in 22 households) and 0.42kg (based on a surveyof 400 households). This resultsin a total residential consumption for Port-au-Prince approaching 160,000 tons in 1990(based on the resultsof the householdsurvey). .6. ilb 1.3: CookingFuet Use in Port-Prince acording to Living Standrd Quintile (in percentap) Nedium Nedita LoW Low Nediua Nigh NHlh Total CHARCOAL Only or main fuel 89.7 96.6 97.8 83.8 41.1 80.8 Sacmndmry fuel 6.4 2.4 2.2 11.3 32.8 10.9 Total 96.1 99.0 100.0 95.1 73.9 91.7 GAS only or wain fuel 1.3 1.3 2.5 13.9 55.8 15.1 Secondaryfuel 1.3 3.? 3.7 31.0 22.0 12.0 Total 2.6 5.0 6.2 44.9 77.8 27.1 FUELU10 only or mafn fuel 7.7 1.2 0.0 0.0 0.0 9.3 Secondary fuel 6.4 4.9 1.3 0.0 0.0 2.5 Total 14.1 6.1 1.3 0.0 0.0 11.8 ELECTRtICITY Onlyor mainfuel 1.3 0.0 0.0 0.0 2.5 3.5 secondaryfuel 2.6 0.0 3.8 11.3 6.3 4.5 Total 3.9 0.0 3.8 11.3 8.8 8.0 Onlyor main fuel 0.0 1.2 0.0 2.5 1.3 1.3 Secoday fuel 0.0 0.0 3.8 3.8 1.3 1.8 Total 0.0 1.2 3.8 6.3 2.6 3.1 sLE : Survey ESIP/W/LADE/P, 1990 llos S" Amx X for tho definfitn of the living standard vrale and aerae incoe and food epdture ftor oah quintit*. 1.13 Among the otherfuel gasis of spe l note,as nearly 27%of households currently are equp with Vgs stoves or gs cookersandmorethanhalfof these(15% of total)usegasas the primatyfuel (see Table1.4). In fack use of gs is well _sablished mainly in high-income households (halfuse it as the primary fuel)andmiddle-income households (those withincomes of morethan $250/month). Use ofgasamonghouseholds withmoremodestincomes s1 is relatively limited:however, thearrival of"popular gs withthedisemination of Bipsingle-flame butane has generate an iital penetrin of thismarket.Morethan50%of portable gascookstoves are sold to households withincomes of ler than S2W0/month (thelastthreequintiles of the population). 1.14 Other fuel are used on* by small seents of the popuation: woodusedin poor households (2.1% in open firesand4.1% inportble cookaoves); kerosene, which onefindsin use amongthe fringesof middle-to high-income populi (0.8%primay usageand 53% in stoves/cookers); andelecticity (0.8% primary usage and53% instoves/cookers) useduniquey in affluent households. -7.. 1.15 Household energ consumption intheseoondary citiesofHaiti(themain onesbeing CapHaitien, LesCayes, Gonaives andSt Marc)apparently Iscompable so that in the capttal, withcharcoal predominating Theproportion of householbusingpasand kerosene for cooking is much lower, however,and residential consumption of fuehwood is stifl widespread, spially in cain port neighborhoods situated along cityoutsits laife 1.4: CooktngEquipwnt In Port-Princ* In Prcentage of total Nouhholts Nan stove Secondery stove Other stove Wood Three ston 1.8 2.5 Charcoal Round stove 55.3 10.3 PotaJS6 stove (36tal) 13.6 3.S "Potaj6' stove (blocks) 7.0 3.8 Squre stow 4.0 2.3 3qwoved stove 1.5 0 0 total S1. 19.9 2.3 Gan alp Tich4rl 3.5 S.8 1.5 Plate 1.S 0.3 0 Cooker 9.8 7.0 2.5 Toatl 14A 1.1 4.0 Keroesne 1.0 1.5 1.3 Electricity 1.0 4.5 1.3 TOTAL 100.0 41.5 9.0 Scumse: urveyESNAP/W/OLADE/PNW 1990. * - Less than 1X. 1.16 There are variousmetallictraditionalcookstoves available(see Table 1.4); the dominanttypesare the following: (a) the roundstove(or its squareversion whichswlsfor pricesvatyingfrom $1.5to $2, is usedby twohirds of the households, (b) the wpotajestove,consisting of two or three burers supportedby a metallicor cementblockfiame,is used by near 30% of the househol, geay the most affluent. The metlic model of this Nt of the lne' stovecoss fom $15 to $20, and the %loW modelsellsfor about $3 to $S per burner. -8- 1.17 The lifespanof these stovesis approimatelyone year. The round sngle-burner stoves(as wellas their squareversion) are producedby 'r6chauliers(craftsmen who specalie in makingportablecookstoves), and the potaj6stovesby iron or metal masons. An estimated200 r&chauliers can be foundin the capital CosuMlin Sma lAdut 1.18 With regardto woodand charooalconsumption by the urbanproductive sector,a distinction must be made betweentwo main categories: (a) productive activities in the informalsector,whichoftenconsumecharcoal; (b) bakeriesand dry-cleaners, whichuse mostlyfirewood. 1.19 Among the activities ofthe informal sector,smallroadsiderestaurantsand hot food vendorsrepresentthe bulkof charcoal consumption: a studycarriedout in 1989 by the Center for the Promotionof Female Workersestimatesthat there are nearly80,000sale points of food productsin Port-au.Prince, of which 20,000 consistof smallOmanj6 kwit restaurants(onefor eight households).Evenif thesefiguresare overestimated, they showthe informal sector'simportance in the capital. The household surveyestimatesthat charcoalconsumption linked to home-based productive activities of this sort accounts for 20%of total residential consumption:thus in Port- au-Prince, about40,000 tonsofcharcoal are consumed by theseactivities annualy,bringing the total consumption of charcoalin the capitalto 200,000 tons/year. 1.20 TheBME's1987 censusidentifies 836bakeries(146in Port-au-Prince) and 113dry- leamers (94 in Port-au-Prince).Some of these companies have switchedfrom keroseneto gas (approximately 30 bakeriesand 13d&yv-eaners): hence95%of the bakeriesand 90%of the dry- leanersin Hati consumefirewood elusively. Total consumption, respectively, is estimatedas 24,000 and 10,000 tons ofwood. Cnsumption by ousehojds and Small ndustryin RuralAreas Rlda Consumption 121 Variousactivities havebeen undertaken to assessrural fuelconsumption, generally withinthe framework of reforestation projects. Theyshowthat firewood is almostexclusively the only fuel used in rral areas for cookingfoodand related acivities. Variousestimatesof the quantitiesconsumedgivefiguresconvergig around500 kg/yearof firewood per capita. In most cases, this wood is gathered free of charge by the peasants on their land; in certain regions, however,especiay in large agrinuural zoneswhere sugarcane or 'vetiver are cultivated,rural marketingof firewoodis beginming to appear,sometimes even for residentialuses. Ihe use of . 9 - charcoal Is relatively limited and concentratedin a few areas with large charcoal production activities. ==bL bmauJDd. 1.22 In 1985 there were 473 'guildivese and 'moulinsguildivese (small companies producing supr and drinkng alcohol), mainly in the southwest peninsula of the country. Someof the moulin-guildives usebagassefromsugarcaneand moremodernguildives use diesel but most of thesesmallindustriesuselargewood. Thisis also the casewith31 essentialoilfactories; a few morethan halfusefirewood for theiroilextraction process.It is estimated that in total, the annual woodconsumption of these smallenterprisesis 130,000 tons and 30,000 tons,respectively. ^cQet ~ ~ ~ ~ ~ Wodfe Resources 1.23 The extentof Haitis forest resourcesis not well-known;the last estimationwas basedon aerialphotographs takenin 1978, and comprised onlynaturalforestformations. A World Bankenvironmental study(BDPA)undertookan evaluation of forestresources basedon the 1982 land use mapwhichwasestablished usingthe aerialviewsfrom 1978 (see Table 1.5). As this map wasnot created specificaly for foreattyneeds,the estimates whichare drawnfrom it - the most completeand mostpreciseof all existing estimates - remainat best approximate, even according to the authorsof the map. Still,it is possible to note the importance of fallowland and tree crops as standingimventory for biomass, and probablythe principalsourceof woodin Haiti - 10. IAM*.JJl Ille_oS Stncdtlg Stocks In 198 Areo Volim (1000 he) (2) (10000 aS (2) Bread-tleaf foret dse 14 1X 2l1O 46 degraded SO 2X 2500 5X rogneration s0 32 3200 62 Pine fret dne a oX 1200 2 opn 20 1X 600 1X wry open 40 12 520 1 Aro-psturel fost prosopic forest S 0A 250 1X ghrnis (ds) 100 4 2500 5X shrus (opn) 15s 7x 2405 5s Nrove 1S X 525 1X en treo crops 170 a 5100 10X (fruit tre, coffee) open tree roPs 40 14 "40 13X Othr (h eous 1682 612 10095 202 crops, swrt rottion fellos, sesom, rock, etc.) TOTAL 2769 100 37395 76 jgg*s UDPA, 19 Ch SUDD1VNetworlu 124 Charcoallsdistibutedthroughanextreme deentraledurbanetailandwholesale networkIn thegreater Port-au-Prince reion (Port-au-Pince, Delmas, Carrefour, andP6tionville), thereare an estimated 3000salespoints,as presented in Table1.6. Thereare nearly200large varehouses withcapacity for morethanSO bap and,at the otherendof the scale,nearly1500 mostly female, smallreiers (themarketing of cbarcoal, bothat the wholesale andretaillevels, iscarried outmostybywomen). Much of the harco issold inthe markets, induding the wharfs, wch comprise nearly 3/4 of the marketfor salesinba. * 11. Iglas.6. Charcoalretail poste couted In Port-w.Prtnce LWS0 than N Nllr of retall posts Ibg I to 10 11 to so thn SO Total X Port*au-Prince 749 277 260 11? 1,423 62 Carrefour 282 134 131 44 591 26 * 0t1e 119 37 24 2 182 8 P6tioittll 57 34 23 2 116 5 Nwkets S81 283 309 151 1324 5? am" 23 1S 10 3 51 2 AloN the street 0 184 139 t1 334 14 Alon the road 603 0 0 0 603 26 Total conted 1,20? 42 4SG 165 2.3i2 100 X 52 21 20 7 100 Total esttzted 1.800 520 5o0 180 3,000 Z60 17 17 6 100 IU1CRV~~~~~~~~~~~~~ .NE 1% 12S Approimatey 37%ofte charcoal consumed in the capitalis transported byboat kmotheportsoftewo pen 1sa nd from onave island; theremaiing 63%isdelivered by truckor othervaious modes of roadtraport Thepractioe of Ocharbon-provione which refers to c od transported in passenger vehicles to escaperegulation by public officials - a practice tlaeratedby the Foresty Svice up to a limit of 10 bap -swidespread. About15%of the charcoal supply entersthe cit by thismeas Charcoal generalyis delivered by ruralmerchants (uswaly female, referred to as madameSaras)whohiretranspotto comeandseU charcoal in the city (seeFi4ure1.1). 1.26 Carca production, entirely donewithtradionl methods, hasbeenthe object of onlysomelimited inestitions Ihe charcoal producers usesmall capacity sak (5 to 10bag) of various forms(pasol circlar, or recaular bateau'kilas). the obsved yieldbyweight are quitehigh(20%)in areaswth largrscale prduto but it seemsthat yieldsare lowerin areaswhere carbonizaton acdvity rcentlyhasbeenesbied. Asthereis verylittlequantitative data,a campainto takemeasuem-ents fom a pre ativesample ofkilns i very much needed. .12 - Eigpre1.1:Charcoal supply systems in Haitiaccording to Stevenson (1985) Produce/charoaler Reron Ma\rket Trasprtler Collector Wholesaler In Port-au-Prnc Lal Merchant Retailer .13- 1.27 IL comparison of two maps,one created in 1980(Adas CNRS 1985),the other in 1990 basedon Information obtainedfromvarioussuiveys conducted duringthis study,showshow wharcoal productionhas become widespreadthroughout Haiti The extensionof charcoal productiondates primarilyfrom 1986,when public control over forest exploitationin Hait disappeared for all practicalpurposes. 128 The originzones of charcoaldelvered to Port-au-Prince in 1980and in 1990are shownin Table 1.7;the resultsof a revisedcountof the volumesof ' rcoal entries in Port-au- Princeare also givenin AnnexIV. A progressive diversication of supplyto the capitalcan be seen; to the traditionalproductionzonesin the northwest and the south have been added new zones,notablythe Grande Anse (southwest peninsula)and the Central Plateau. There are no longerhardlyany zones in the country,with the cweption perhaps of the far northeast,where dharcoalis not producedfor Port-au-Prince (see maps for 1980and 1990in AnnexXIV). Table 1k,: Production areas of Charcoal since 1979 in percentaee Department 1979 198S 1990 North vest 50 33 21 south 30 36* 2 Central 10 1s** 13 Gonae 10 3 5 Grande-Anse 0 ` 13 south Eant 0 9 3 Uast 0 4 26 Artibonite 0 13 North 0 0 4 t tncludinG Grande-Anse I Including Artibonite Source: Karl Voltaire, 1979 University of Maine, 1986 Supply ME rgin and Rvne 1.29 Thecost to the residential buyerofcharcoal in Port-au-Prince, whensoldby thebag, is about