Forests Sourcebook - HCV Resource Network

Box 6.2
Upstream Analyses on Energy Reform and Fuelwood Use: An Example from Azerbaijan
Since fiscal 2002, several lending operations in the
Europe and Central Asia (ECA) region have focused
on energy sector reforms to improve the efficiency
and effectiveness of service delivery in the region. In
2004 the World Bank reviewed the fiscal, efficiency,
social, and environmental dimensions of reforms in
the energy sector in seven countries in the ECA
region (Armenia, Azerbaijan, Georgia, Hungary,
Kazakhstan, Moldova, and Poland) (Lampietti 2004).
This study provided food for thought regarding
potential environmental impacts, including those
associated with human health benefits resulting from
reduced pollution from the electricity sector. The
study also discussed the possibility that reforms have
damaged health because households switched to dirty
fuels (such as wood, coal, or kerosene). Because of
inadequate data, the study could not evaluate the
impact of reforms on fuel switching, energy use, substitution
effects, and health and social impacts. Nevertheless,
such facts as “in Armenia 80 percent of
households and 95 percent of poor households
reported using alternative fuel sources to reduce
reliance on electricity (primarily wood (60 percent)
and/or gas (24 percent))” (Lampietti 2004:44) and the
possibility that fuelwood use may cause deforestation
raised concern.
This analytical work justified the poverty and social
impact analysis (PSIA) undertaken prior to an energy
reform operation in Azerbaijan (World Bank 2004).
The PSIA used spatial information to assess the environmental
impact of energy reform. The methodology
enabled the identification of areas where households
(because of poverty) might switch to dirty fuels. Overlaying
this information with data on forest cover
revealed where the risk of increased residential wood
use is greatest. With this information it was possible to
consider promoting access to alternative energy
sources and more efficient wood stoves in high-risk
areas, and preparing and implementing spatially
explicit forest management plans and encouraging
participatory forest management to reduce this risk.
The data for this study were collected with extensive
in-country collaboration. Local stakeholders participated
in two consultative workshops and various discussions
to help guide the research and included representatives
from the Ministry of Economic
Development, the Ministry of Fuel and Energy, the
Ministry of Labor and Social Assistance, and the Parliamentary
Committee on Energy. There was also close
collaboration and support from the Ministry of Agriculture,
the State Statistical Committee, and the State
Amelioration and Water Management Committee.
Source: Authors’ compilation using Lampietti 2004 and World Bank 2004.
line with this thinking, many of the decisions on large-scale
economic and social changes that are having an impact on
forests are made by people with little or no involvement in
the forest sector, and seldom contacted by forest sector specialists.
Under this interpretation, the options for sustainability
available to forest stakeholders are constrained. An
avenue is for the donor agencies, in their dialogue with economic
and social policy ministries on policy loans, to agree
on supportive measures for the forest sector, such as training
and education programs and consultative activities.
Creating entry points for introducing forest issues
and timing. Raising the profile and relevance of forest
issues among ministers of finance and social programs will
require rigorous analytical work to translate forest issues
into economic issues. Analysis of the economic contribution
of forests (or the impact of forest conversion or degradation
on the national economy) and forest-poverty links (see note
1.1, Mainstreaming the Role of Forests in Poverty Alleviation
and note 1.4, Property and Access Rights) could create
entry points for incorporating forest considerations in
macroeconomic and sectoral policy dialogues. The process
for informing relevant sector and finance ministries should
be tailored to the country context to ensure credibility. Relevant
analytical findings should be available at key intervention
points in national policy processes.
Indirect effects. Changes in tree cover or access to forest
resources are often the result of direct causes, such as logging
and pressures to increase agricultural and pasture
areas. Logging and forest conversion themselves, however,
are the result of various economic factors. Angelsen and
Kaimowitz (1999) provide a framework for understanding
the indirect causes of deforestation. One step examines the
206 CHAPTER 6: MAINSTREAMING FORESTS INTO DEVELOPMENT POLICY AND PLANNING