ethanol fuel production and use in kenya for sustainable ... - lumes

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REINFORCING LOOP (R2)An increase in “Ethanol production” leads to an increase in “Cultivation of feedstock” and anincrease in “Cultivation of feedstock” leads to an increase in “Ethanol production”. Theproduction of ethanol will provide a market to farmers who will in turn increase cultivation.An increase in “Ethanol production” leads to an increase in “Jobs in production anddistribution”; the jobs will be in the processing plants, in the transportation of ethanol and atthe gas stations. An increase in “Jobs in production and distribution” leads to a decrease in“Poverty”; a decrease in “Poverty” leads to an increase in “STANDARD OF LIVING”REINFORCING LOOP (R3)An increase in “Ethanol production” leads to an increase in “Export of ethanol” and anincrease in “Export of ethanol” leads to an increase in “Ethanol production” this is because ifthere is profit in the export of ethanol, production for export will be increased as a result ofthe reinvestment in export due to the availability of a good market.An increase in “Export of ethanol” leads to an increase in “Government revenues” in form ofexport duty and trade surplus. An increase in “Government revenue” leads to an increase in“Public services (health education infrastructure)” as the Government will be in a betterfinancial position to allocate funds to social services. An increase in “Public services (health,education infrastructure)” leads to an increase in “STANDARD OF LIVING” Improved livingstandard will result from better health services and education to the population if thegovernment channels the funds to better social services.REINFORCING LOOP (R4)An increase in “Ethanol production” leads to an increase in “Ethanol use” and an increase in“Ethanol use” leads to an increase in “Ethanol production” as more usage will lead to moreproduction to meet the market demand.BALANCING LOOP (B2)An increase in “Ethanol use” will lead to a decrease in “Supply” as the demand for ethanolincreases and a decrease in “Supply” will lead to an increase in “Ethanol price” and anincrease in “Ethanol price” will lead to a decrease in “Ethanol use” as the high prices will actas a disincentive.An increase in “Ethanol use” leads to a decrease in “Petroleum use” as ethanol will replace acertain amount of petroleum that would have been used and a decrease in “Petroleum use”leads to an increase in “Trade balance” as the government cuts down on its importexpenditure thus improving the balance of trade. An increase in “Trade balance” leads to anincrease in “Government revenues” from the savings attained by not importing petroleum.Poverty ReductionOne way of meeting the needs of the poor is combating poverty through the provision ofreliable income generating opportunities (UNCED, 1992). Ethanol production is an agrobasedindustry and thus has the potential of providing both on-farm and off farm employmentopportunities especially in the rural areas and thus generating incomes. In Kenya, ethanolproduction would have the potential to boost the agricultural sector which plays an importantrole in the country’s economy. Currently agriculture contributes 26% of Kenya’s GrossDomestic Product (GDP) and is the source of livelihood for 80% of the people living in ruralareas (Muigai, 2005). In light of this big number of rural poor, the Government recognises the13
need for higher agricultural growth as critical for alleviating poverty (Government of Kenya,2000). It further argues that agricultural growth has a growth multiplier of 1.64 thus it couldcatalyse growth in other sectors and is likely to have a strong indirect effect (Government ofKenya, 2000). In Brazil, it is estimated that ethanol production provides up to 700,000 directjobs and about three to four times this number of indirect jobs (HABITAT, 1993). Thepresence of a large ethanol plant will attract other industries to the area just by its presenceand for its fuel this will lead to the creation of additional jobs (BOSTID, 1983).Government RevenuesThe tax base in Kenya is low making it difficult for the government to effectively providesocial services to the people. The Kenyan government has thus been under pressure frominternational funding organisations to increase its tax base so as to reduce its dependence onforeign aid (Cheeseman and Griffiths, 2005). One approach that could be used to increase theability of Kenyans to pay taxes is to increase the tax base (Cheeseman and Griffiths, 2005).The jobs and incomes generated from ethanol production could contribute to governmentrevenues in form of income tax from the salaries as well as in the form of value added tax(VAT) thus increasing the tax base (CLD Figure 4).Export to Other CountriesSurplus ethanol could be exported to the world market in which there is a potential demandfor instance in the European Union where some countries have adopted carbon taxes whichmake the use of fossil fuels expensive. By 2001 there were already eight European memberstates that had introduced carbon taxes (Carter, 2001). An added advantage is thegeographical location of the country; unlike its landlocked neighbours, Kenya has coastlinewith an important port from where ethanol can be shipped to other countries. Moreover ascompared to developed countries Kenya has a cheaper labour force which could lower thecost of ethanol making it competitive in the world market. Exporting ethanol will improve thebalance of trade that is offset by importing petroleum (Figure 4 CLD). The export of ethanolto other countries could be favoured by free trade agreements between Kenya and othercountries for instance in Africa, the East African Community (EAC) which comprises ofKenya Uganda and Tanzania and the Common Market for Eastern and Southern Africa(COMESA) of which Kenya is one of the 20 member states. Some of the COMESAagreements for instance, include: Free Trade Area (FTA) in which no tariffs are levied ongoods from other member states but each state is free to apply its own laws to goods importedfrom outside the region; and Preferential Trade Area (PTA) where lower tariffs are applied tointra-regional trade originating from member countries than to extra-regional countries(COMESA, 2005).Reduced Dependence on Imported fuelsFrom the field survey it was noted that Kenya has no economically viable sources of fossilfuels and depends on imports from Saudi Arabia, Iran, and Kuwait (questionnaire to policymakers) and that besides trade imbalance, the policy makers also recognise high and unstableprices as a major problem in the oil industry of which they asserted that little can be done tocontrol since the oil is imported from other countries. The field survey also revealed thatcurrent and past efforts have concentrated at exploration for fossil fuel deposits in the countrywith no success. Therefore, the search for alternative energy sources such as ethanol could bea viable option. Producing and using ethanol in Kenya would reduce the government’s high14
Page 1 and 2: LUND UNIVERSITYInternational Master
Page 3 and 4: AcknowledgementsI would like to tha
Page 5 and 6: Table of ContentsAbstract .........
Page 7 and 8: List of acronymsACE - Atmosphere Cl
Page 9 and 10: The oil crisis and low sugar prices
Page 11 and 12: patterns that may be used to predic
Page 13 and 14: REINFORCING LOOP (R1)An increase in
Page 15 and 16: World Oil Prices and Inflation Tren
Page 17 and 18: the strengthened greenhouse effect
Page 19: Available arable land(carrying capa
Page 23 and 24: atmosphere” leads to a decrease i
Page 25 and 26: evaporative emissions reacts with h
Page 27 and 28: particulate emissions from cane fie
Page 29 and 30: the yields on table 1 probably beca
Page 31 and 32: pastoralists and thus do not cultiv
Page 33 and 34: contributes to global warming. Petr
Page 35 and 36: Gariazzo et al. (2005) Monitoring a
Page 37 and 38: Tsai, et al. (2005) A Hematology Su
Page 39 and 40: Fossil fuels1. Does the country imp

ethanol fuel production and use in kenya for sustainable ... - lumes

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