Alternative policies to subsidize rural household biogas digesters |
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| Affiliation: | 1. State Key Joint Laboratory of Environmental Simulation and Pollution Control, School of Environment, Beijing Normal University, Beijing 100875, China;2. School of Forestry and Wildlife Sciences, Auburn University, 3213 SFWS Building, 602 Duncan Drive, Auburn, AL 36849-5418, USA;1. Centre for Environment and Development Studies, College of Development Studies, Addis Ababa University, 1176, Addis Ababa, Ethiopia;2. Department for International Development [DFID], Ethiopia;3. University of KwaZulu-Natal, School of Engineering, Bioresources Engineering, Pietermaritzburg, South Africa;1. Donlinks School of Economics and Management, University of Science and Technology Beijing, Beijing, 100083, People''s Republic of China;2. School of Economics and Management, Beihang University, Beijing, 100191, People''s Republic of China;3. State Key Joint Laboratory of Environment Simulation and Pollution Control, School of Environment, Beijing Normal University, Beijing, 100875, People''s Republic of China;1. Department of Economic and Technological Change, Center for Development Research (ZEF), University of Bonn, Walter-Flex-Str.3, D53115 Bonn, Germany;2. College of P.E & Sports, Beijing Normal University, No.19 Xinjiekouwai Street, Haidian District, 100875 Beijing, China;1. College of Economics and Management, Chang’an University, Xi''an, Shaanxi, 710064, China;2. A.R. Sánchez Jr. School of Business, Texas A&M International University, Laredo, TX, 78041, United States;3. College of Technology, University of Houston, Houston, TX, 77204, United States;4. School of Business Administration, University of Mississippi, University, MS, 38677, United States;5. Government Audit School, Nanjing Audit University, Nanjing, Jiangsu, 211800, China;1. School of Economics and Management, North China Electric Power University, Beijing, 102206, China;2. School of Economics, Zhejiang University, Hangzhou, 310058, China;3. Institute of Management Sciences, Bahauddin Zakariya University, Bosan Rd Multan, 60000, Pakistan;4. Department of Building and Real Estate, The Hong Kong Polytechnic University, Hong Kong, China |
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| Abstract: | Existing policies of household biogas projects focus mainly on supports on construction, but less consider management and maintenance, resulting in high scrap rate and waste of resources. Alternative policies must be explored to balance construction and operation. Taking the costs and benefits from a typical rural household biogas project, this paper assesses the economic performance at three different subsidy levels, i.e., no subsidy, existing standard and positive externality based standard. Furthermore three subsidy alternatives, one-time, annual and combined option are applied to the externality based standard. The results show that household biogas digesters have unsatisfactory economic performance without any subsidy and even in current subsidy policies. Environmental benefits of the digester were estimated as 2732 Chinese Yuan, significantly larger than existing subsidy standard. To keep continuous work during the 20-year lifespans of digesters, the income disparity of farmers among regions must be considered for policy application. With the increasing of labor costs, the ratio of initial subsidies must be reduced. These results provide policy implications to the future development of biogas projects in terms of both their construction and follow-up management, reuse of the abandoned digesters as well as the exploitation of other emerging renewable energy projects. |
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| Keywords: | Household biogas digester Externalities Subsidies Net present value Cost-benefit analysis |
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