Household Coal Demand in Rural Kazakhstan: Subsidies, Efficiency, and Alternatives

Peter Howie, Zauresh Atakhanova

Research output: Contribution to journalArticlepeer-review

Abstract

In 2012, 32% of Kazakhstan’s population nationwide, including 70% of rural households, used coal as a primary source of space heating energy. Equally dramatic is the statistic that the average household annual consumption of coal increased by 44% between 2002 and 2012, from 3.9–5.8 tons to 5.6–8.4 tons
depending on the region. This paradoxical increase and the high use of coal in a country with plentiful oil and gas reserves along with coal’s negative effects stimulated our interest in investigating the determinants of household coal demand, how subsidies may have shaped its use, and how the government might put its money to better use in providing a cleaner and more sustainable landscape. By estimating two demand models (based on household-level cross-section and household-cohort pseudo-panel data), we demonstrate that energy subsidy reform will reduce coal demand by 30% in the short run and 50% in the long run. In addition, increasing efficiency of all rural houses to that of the
houses built after 1990 will decrease coal demand by at least 12%. Finally, we discuss the importance of natural gas and renewable energy sources in enabling the transition of rural households away from coal.
Original languageEnglish
Article number7
Pages (from-to) 55-64
Number of pages10
JournalEnergy and Policy Research
Volume4
Publication statusPublished - 2017

Keywords

  • Price and income elasticities; energy subsidies; energy demand; rural energy policy; cross-section model; pseudo-panel data model

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