Waste Not: Can Household Biogas Deliver Sustainable Development?

Household biogas systems are a renewable energy technology with the potential to provide sustainable development benefits by reducing pressure on forest stocks and by shifting household time allocation towards higher value activities or long-term investments in human capital. We estimate the environmental and socioeconomic impacts of biogas expansion in Nepal using an instrumental variables approach that exploits conditional variation in access to biogas installation companies. We confirm prior evidence that biogas use significantly reduces collected fuelwood, estimating changes of approximately 800–2000 kg per year per household. We find new evidence that biogas saves time in fuelwood collection (23–47%), and results in reallocation of time away from home production and wage labor towards agricultural labor and education. We find that biogas reduced forest cover loss in the Hill region and when combined with other forest protection policies. Together the results suggest that biogas can contribute modestly to sustainable development, particularly in combination with complimentary opportunities or policies.