An Economic Framework for Energy Transitions
"There is special interest in the patterns of fuel use among low-income rural communities and their transition from one form of energy use pattern to another. Understanding energy transitions will help in developing energy policies for the poor and promoting new energy markets that will improve their household budgets. Energy suppliers, such as utilities, would be better able to work in low-income communities for their mutual benefit. Households could benefit from more convenient and healthier forms of energy. This paper develops a simple micro-economic framework describing aspects of energy supply and use in low-income settings. We assume that consumer utility is the driver of transitions, subject to fuel-appliance availability and budget constraints. We explore the hypothesis that reductions in “market failure” often help to encourage energy transitions."