Overview

A new study by researchers from the University of British Columbia, the International Institute for Applied Systems Analysis, and the Stockholm Environment Institute evaluates the Indian government’s national program, Pradhan Mantri Ujjwala Yojana (PMUY), which was designed to overcome financial barriers to  purchasing a clean, liquefied petroleum gas (LPG) stove and cooking fuel. The study finds that rapid growth in program enrollment by LPG consumers is not always matched with increased sales of LPG. Even though PMUY provided the choice of a one-time subsidy or an optional loan to cover the initial costs, the research findings suggest that subsidizing the initial purchase alone may not be a strong enough motivator for consumers to transition away from polluting cooking fuels.

This study was funded by the United States Environmental Protection Agency, the Clean Cooking Alliance (“Alliance”), the Peter Wall Institute for Advanced Studies, and the Collaborative Research and Training Experience- Atmospheric Aerosol Program (CREATE-AAP) at the University of British Columbia. It was conducted in the Koppal district of Karnataka, India.

Key takeaways

  • The potential health, social, economic and environmental benefits of transitioning to LPG fuel use for cooking are dependent on the level of solid fuel displacement.
  • Implementation of PMUY in the district evaluated resulted in rapid growth of LPG consumers.
  • Low LPG refill rates and a large proportion of customers choosing not to refill after the initial provision of the first filled cylinder suggests that increased access alone was not a sufficient motivator for a full transition away from using solid fuels.
  •  All rural consumers (PMUY and non-PMUY) use LPG at a level lower than the national average.
  •  Experience (familiarity with technology) does not lead to consistent growth in consumption among general consumers, at least not in the initial few years for general customers. As PMUY was relatively new in the study area, the role of experience could not be studied.
  • Widespread adoption of LPG allows for more targeted and tailored consumer incentives in rural India in order for both PMUY and non-PMUY consumers to become consistent LPG users.

Summary

Combustion of solid fuels such as crop residue, firewood, and dung cakes leads to exposure to household air pollution, which is attributed to 1.6 million deaths in 2017. On a global scale, about 30% of wood burnt as fuel for cooking is not sustainably harvested, contributing to forest degradation and significant global emissions. India launched the Pradhan Mantri Ujjwala Yojana (PMUY) in 2017 to promote liquefied petroleum gas (LPG) as a cleaner and more efficient cooking fuel to address issues around health, the climate, and the environment, specifically targeting poor women as program beneficiaries. The program provides a one-time subsidy or an optional loan to cover the initial upfront cost of the LPG connection, which includes a stove and a filled LPG cylinder.

More than 70 million poor women received LPG within the first 35 months of PMUY. The research highlighted in this article took a novel approach to evaluate underlying behaviors and purchasing patterns that led to this significant achievement by gaining access to a robust set of previously unavailable data. The Indian Ministry of Petroleum and Natural Gas (MoPNG) provided the research team access to a national database of 30 million PMUY beneficiaries, anonymized and categorized by state and LPG distributor and containing enrollment and sales records for registered LPG consumers. With this level of information, the researchers were able to gain insights around the efficacy of the program and behavioral factors that influence the adoption of clean cooking solutions with the objective of informing potential changes to the program and similar future initiatives.

Why India?

India’s deployment of the PMUY program, targeting low-income, rural populations, was unprecedented in scale and pace. It has attracted local and international attention, especially from other countries seeking to transition their country’s cooking fuel mix away from solid fuels and programs with an interest in learning from its methods. This study, namely initiated by interest from the authors to build on their existing research in India, was supported by the MoPNG to objectively evaluate the ability of the program and its various incentives to spur a national transition to clean cooking fuels. The Koppal district of Karnataka was chosen by the research team, as it had an ongoing project where the team had already collected self-reported survey data on LPG consumption that could inform this study.

What the researchers did:

Using the information gathered from the extensive dataset, the researchers were able to create a robust database, grouping the LPG customer and distributor records in a way that allowed them to analyze and discern meaningful insights. Having selected Koppal as their targeted area of study, they extracted more than 200,000 LPG sales records for over 25,000 rural consumers from January 2016 to December 2018 and some records previous to 2016 for this area. They evaluated this information through the lens of different LPG customer categories including PMUY versus general consumer, years as a consumer, the role of LPG in the cooking fuel mix of each consumer (occasional, secondary, primary, or exclusive use of LPG), among other categories. 

What they found:

The researchers found rapid program uptake. Within 16 months of the program being launched in Koppal, there were approximately 15,000 PMUY customers, an average monthly growth rate six times that of general customers over the same time period. The researchers also found that there was a drop in the monthly growth rate of general customers. The research sought to discern how the program showed such large enrollments, while at the same time fewer people, in general, seemed to be purchasing LPG. One possible explanation offered by the authors was that some PMUY consumers would have purchased LPG even without the subsidy provided by PMUY; the authors refer to these customers as “free-riders.” After conducting key informant interviews, the authors provided an additional explanation that some people that were not initially eligible for PMUY were taking a “wait-and-see” approach, holding off on purchasing LPG with the hope that they would eventually become eligible for the program.

The authors conclude that while PMUY was successful in promoting LPG enrollment among the poorest households, there has not been comparable growth in overall LPG sales. This suggests that enrollment in PMUY has led to an overall decline in LPG consumption. The authors note that “In pre-PMUY, we had a consumer pool who were able to afford and were willing to pay Rs. 5000. It is roughly equivalent to three times the average per capita monthly consumption expenses in a rural household. When millions of poorer and/or less motivated women are invited into this consumer pool, it will obviously drag down the average consumption.”

With many looking to PMUY as a model for expanding energy access in other countries, showcasing lessons learned is crucial to replicating successes and avoiding similar pitfalls. The insights from the program, some of which are outlined below, allow for opportunities to conduct mid-course and in the future corrections, thereby increasing India’s ability to reach underserved and low-resource populations. The results also demonstrate the value of access to consumer purchasing data and its ability to inform rigorous analysis and transparent program evaluation.

Policy/Sector Implications 

  • Steps should be taken, beyond overcoming the initial capital cost barrier, to design and implement program changes that directly address the gaps identified in this research. For example, subsidies that extend beyond the initial purchase could be paired with simultaneous behavior change communications and strategies to encourage the substitution of LPG for traditional fuels and to raise usage rates for non-PMUY customers.
  • To achieve expected health benefits, reductions in exposure to emissions must occur, requiring widespread adoption of the cleanest fuels, such as LPG, in addition to the displacement of dirty fuels within households and at the community level.
  • The results obtained from the study in Koppal can be used to inform implementation efforts in other regions and address questions about LPG use.

Links to further reading/citations