ENERGY SAFETY NETS BRAZIL CASE STUDY - SEforALL
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ENERGY SAFETY NETS BRAZIL CASE STUDY
ACKNOWLEDGEMENTS
The Energy Safety Nets: Brazil Case Study was The research team acknowledges the contri-
researched and written by partners at the Cen- butions to this work of the following workshop
tre for Energy and Environmental Economics attendees and key interviewees: COPPE/UFRJ
(Cenergia Lab), COPPE, Universidade Federal (Carlos Henrique Duarte), Cenergia/UFRJ (Talita
do Rio de Janeiro (www.ppe.ufrj.br), with the Borges Cruz, Paula Borges, Mariane Zotin, Gerd
help of Antonella Mazzone, from the Oxford Abrantes Angelkorte, Leticia Magalar de Souza
University Centre for the Environment, Univer- and Rafael Garaffa), Institute of Applied Eco-
sity of Oxford. The lead researcher from COPPE nomic Research – IPEA (Elaine Christina Licio),
was Roberto Schaeffer (roberto@ppe.ufrj.br), Brazilian Electricity Regulatory Agency – ANEEL
supported by a team that included Alexandre (Mauricio Lopes Tavares), Electric Energy Re-
Salem Szklo, André Frossard Pereira de Lucena search Center – CEPEL (Márcio Gianini), Energy
and Régis Rathmann. Research Company – EPE (Thiago Pastorelli Rod-
rigues), Ministry of Social Development – MDS
We acknowledge with gratitude the financial (Denise Direito), Frente por uma Nova Política
support provided by the Wallace Global Fund. Energética (Joilson Costa).
This report is based on research jointly implemented by partners at the Cenergia Lab, the
Overseas Development Institute (ODI) and Catholic Agency for Overseas Development (CA-
FOD). The research in Brazil is part of a broader program of energy safety nets research also
carried out in Ghana, India, Indonesia, Kenya and Mexico funded by Sustainable Energy for All
(SEforALL) as part of its People-Centered Accelerator work program.
ENERGY SAFETY NETS | BRAZIL CASE STUDY 2
TABLE OF CONTENTS ACKNOWLEDGEMENTS 2 LIST OF FIGURES 4 LIST OF TABLES 5 ABBREVIATIONS 6 MAP OF BRAZIL 8 EXECUTIVE SUMMARY 9 INTRODUCTION 11 BACKGROUND 12 The Brazil case study 12 ENERGY ACCESS IN BRAZIL – A CONTEXTUAL OVERVIEW 14 THE DESIGN, IMPLEMENTATION AND EVOLUTION OF BOLSA FAMÍLIA, LUZ PARA TODOS AND TARIFA SOCIAL 17 BOLSA FAMÍLIA 18 Separate ministries provide separate safety nets (mid-1990s to 2003/4) 18 Integration into Bolsa Família 19 LUZ PARA TODOS 22 Electricity access prior to Luz para Todos 22 Electricity sector reform and the launch of Luz para Todos 23 The limitations of grid extension for providing electricity access 24 Shifting focus to prioritize those left furthest behind 26 TARIFA SOCIAL 26 The history of subsidized electricity consumption 26 A volume-differentiated tariff that varies by region and beneficiary group 27 BOLSA FAMÍLIA, LUZ PARA TODOS AND TARIFA SOCIAL: IMPACTS AND INSIGHTS 29 BOLSA FAMÍLIA AND THE IMPACTS OF THE LPG ALLOWANCE 30 Poverty reduction 30 Challenges of subsidizing energy access within Bolsa Família 30 ENERGY SAFETY NETS | BRAZIL CASE STUDY 3
The value of Bolsa Família has not kept pace with the cost of LPG 31 Impact of the increase in LPG price on energy access 33 A lack of awareness of social protection programs by beneficiaries may hamper the programs’ impact 34 THE IMPACTS OF LUZ PARA TODOS AND TARIFA SOCIAL ON PROMOTING ACCESS TO ELECTRICITY 35 Luz para Todos: delivery of near-universal electricity access 35 Tarifa Social has supported consumption for the poorest, but not for all poor groups 35 THE GENDERED IMPACTS OF ENERGY SAFETY NETS IN BRAZIL 36 CONCLUSIONS 37 SUGGESTIONS FOR FURTHER RESEARCH 38 POLICY RECOMMENDATIONS 39 REFERENCES 40 Endnotes 43 COPYRIGHT AND DISCLAIMER 44 LIST OF FIGURES Figure 1: Brazil: HDI values by region (2010) 13 Figure 2: Brazil’s progress towards achieving SDG7 16 Figure 3: Timeline: Introduction of Social Policies in Brazil, 1995-2011 20 Figure 4: Population with access to electricity, 1960-2000 22 Figure 5: National Grid Coverage 24 Figure 6: Access to Electricity by State, 2010 25 Figure 7: Evolution of poverty in Brazil 30 Figure 8: Real price variation of LPG to final user by region in Brazil, 2007-2016 32 Figure 9: Residential consumption of firewood and LPG in Brazil, 2008-2017 33 ENERGY SAFETY NETS | BRAZIL CASE STUDY 4
LIST OF TABLES Table 1: Relevant information about Brazil 15 Table 2: The composition of Bolsa Família 19 Table 3: Tarifa Social for low-income households 27 Table 4: Tarifa Social for specific groups 28 Table 5: Nominal price of LPG and value of Bolsa Família 31 Table 6: Regulated power consumption by end use sector (GWh) 35 ENERGY SAFETY NETS | BRAZIL CASE STUDY 5
ABBREVIATIONS ANEEL Agência Nacional de Energia Elétrica (Brazilian Electricity Regulatory Agency) BF Programa Bolsa Família (Family Allowance Program) BPC Benefício Assistencial ao Idoso e à Pessoa com Deficiência (Benefit for Elderly and Disabled People) CAD Cadastro Único para Programas Sociais (Single Registry for Social Programs) CAFOD Catholic Agency for Overseas Development CCC Conta de Consumo Combustível (Account for Cross-Subsidization) CCC-ISOL Fossil Fuels Consumption Account of Isolated Systems CDE Conta de Desenvolvimento Energético (Account for Energy Development) CEPEL Centro de Pesquisa em Energia Elétrica (Electric Energy Research Center) COPPE/UFRJ Instituto Alberto Luiz Coimbra de Pós-Graduação e Pesquisa de Engenharia da Universidade Federal do Rio de Janeiro CRAS Social Assistance Office EPE Empresa de Pesquisa Energética (Energy Research Company) HDI Human Development Index IBGE Instituto Brasileiro de Geografia e Estatística (Brazilian Institute of Geography and Statistics) IEA International Energy Agency IPEA Instituto de Pesquisa Econômica Aplicada (Institute of Applied Economic Research) LPG Liquefied Petroleum Gas LpT Programa Luz para Todos (Light for All Program) MCTIC Ministério da Ciência, Tecnologia, Inovações e Comunicações (Ministry of Science, Technology, Innovations and Communications) MDS Ministério do Desenvolvimento Social (Ministry of Social Development) MMA Ministério do Meio Ambiente (Ministry of Environment) MME Ministério de Minas e Energia (Ministry of Mines and Energy) NGO Non-governmental Organization ONS Operador Nacional do Sistema Elétrico (Brazilian´s Energy System Operator) ENERGY SAFETY NETS | BRAZIL CASE STUDY 6
PRODEEM Brazilian Program for Rural Electrification Using Photovoltaics RF Person Responsible for a Family Unit within CAD SIN Sistema Interligado Nacional de Energia Elétrica (National Interconnected System) TS Programa Tarifa Social (Social Tariff Program) VG Vale Gás (Gas Assistance Program) A note on currency The Brazilian real (Portuguese: real, pl. reais; sign: R$; code: BRL) is the official currency of Brazil. Cur- rency conversions were carried out using year-averaged values available from the World Bank/IMF (https://data.worldbank.org/indicator/PA.NUS.FCRF?locations=BR). If a specific year was available from the context, this was used, otherwise the most recent data (i.e. 2018) were used. ENERGY SAFETY NETS | BRAZIL CASE STUDY 7
MAP OF BRAZIL
Roraima Amapá
Amazonas
Pará Maranhão
Ceará
Rio Grande
do Norte
Paraíba
Piauí
Pernambuco
Acre
Alagoas
Tocantins
Rondônia Sergipe
Bahia
Mato Grosso
Distrito Federal
Goiás
Minas Gerais
Espírito
Mato Grosso Santo
do Sul
São Paulo Rio de
Janeiro
Paraná
Santa
Catarina
Rio Grande
do Sul
ENERGY SAFETY NETS | BRAZIL CASE STUDY 8EXECUTIVE SUMMARY
This research aims to provide guidance for policy- fordability for poor and vulnerable households. It
and decision-makers, by identifying measures in has expanded rapidly and more than one in ten of
Brazil that have been successful in enabling very all households currently benefit from Tarifa Social
poor people to access modern energy services to some degree. The volume-differentiated tariff
and exploring the reasons for their success and applies discounts to the energy bills of households
challenges encountered. Its findings are based on enrolled in the Cadastro Único (CAD), the unified
quantitative and qualitative analyses of three pro- gateway registry for social programs. An analysis of
grams that directly and indirectly impact the ac- consumption levels by poor households suggests
cess and consumption of modern energy sources: that Tarifa Social has largely insulated electricity
Luz para Todos (Light for All) and Tarifa Social (So- consumption in low-consuming poor households
cial Tariff) for electricity, and Bolsa Família (Family from the recent economic downturn. However,
Allowance) for LPG for cleaner cooking. the same analysis shows that the scheme would
need to be modified to adequately support poor
Luz para Todos was launched in 2003 to extend ac- households to consume more than very basic lev-
cess to electricity connections in rural and remote els of electricity.
areas of Brazil. Like Tarifa Social, it is supported
by cross-subsidies funded via levies on consumer In 2003, the Brazilian Government launched the
electricity bills. Through successive iterations, the Bolsa Família integrated cash transfer to bring
program has focused on connecting households together support previously provided by 12 indi-
and communities using a prioritization scheme vidual social assistance programs. This included
that attempts to ensure the most disadvantaged support for LPG for cooking under the Vale Gás
communities are connected first. Although the and Auxílio-Gás programs. Bolsa Família also
vast majority of the unconnected households are uses the Cadastro Único to identify recipients
located in regions of the country scoring low on and represents an important resource for families
the Human Development Index (HDI), the scheme that has successfully lifted many millions out of
appears to have been broadly effective. Since its poverty. However, the program is poorly set up
inception, it has invested more than USD 7.1 billion to ensure access to modern cooking energy such
(BRL 26 billion, 2018 prices) to reach over 16 mil- as LPG and data show a recent uptick in the num-
lion people through more than half a million proj- ber of households reverting to using traditional
ects, putting Brazil on track to achieve universal biomass for cooking. This is, in part, because the
access to electricity well before 2030. program’s energy component is non-earmarked,
which allows households to use the benefit to
Tarifa Social was launched in 2010 to complement pay for other services, especially during times of
universal access to electricity connections. The economic hardship. The scheme’s effectiveness
program was built on previous experience with in supporting LPG consumption is also ham-
subsidizing electricity consumption to increase af- pered by the cost of LPG rising much faster than
ENERGY SAFETY NETS | BRAZIL CASE STUDY 9the amount the cash transfer provides to poor support low-income groups to access affordable,
households. In 2015, the cost of a 13kg cylinder reliable, sustainable and modern energy services.
of LPG represented 58 percent of the monthly These include adapting programs to reflect sub-
Bolsa Família transfer, but by 2019 this figure had national variations, increasing awareness among
increased to 79 percent. eligible beneficiaries, and changes to the way that
support is targeted and delivered to enhance the
The final section of this report details opportuni- programs’ ability to support energy access by
ties to improve the extent that current programs poor and vulnerable households.
ENERGY SAFETY NETS | BRAZIL CASE STUDY 10INTRODUCTION ENERGY SAFETY NETS | BRAZIL CASE STUDY 11
BACKGROUND Kenya and Mexico— seeks to answer four research
questions:
Social assistance measures can enable access to
affordable energy. The use of targeted support • What policy measures have been used to en-
measures may face inclusivity challenges. Different able very poor and marginalized people to ac-
mechanisms (e.g. cash transfers, vouchers and price cess and use modern energy services?
controls) may yield different results, and they may re- • How effective have these measures been in en-
quire levels of administrative and institutional capac- abling the poorest social groups to access and
ity that are not found in every country. Country case use modern energy services?
study research is meant to build an understanding • What links have there been/are there between
of the degree to which different mechanisms have these measures and wider/other social assis-
been successful in different contexts, and identifies tance programs?
areas for further innovation, piloting or research. • What changes could be made to enhance the
The overall objective of the research is to provide effectiveness of existing policy measures in en-
guidance for policymakers and decision-makers, by abling very poor people to access modern en-
identifying measures that have been successful in ergy services?
enabling very poor people to access modern ener-
gy services and exploring both the reasons for their Using these general research questions, the case
success and challenges encountered. study began by developing questions more directly
relevant to the context of access to modern energy
The Brazil case study services and social assistance programs in Brazil. A
literature review was then carried out to identify the
The Brazil case study aims to identify programs and main government policies and programs comprising
public policies that have been successful in enabling Brazil's Energy Safety Nets (ESNs).
access to modern energy services in regions with
low HDI values (Figure 1). The programs analyzed Two stakeholder workshops were also carried out.
are Luz para Todos, Tarifa Social and other govern- The first reviewed the specific research questions
mental programs, such as the Bolsa Família, which and identified data sources. The second validated
can indirectly impact the access and consumption of the preliminary research findings, addressed remain-
modern energy sources. ing information gaps, and agreed preliminary con-
clusions and policy recommendations. Twenty key
This research used quantitative and qualitative informant interviews based on the research ques-
methodologies to build a comprehensive picture of tions were also carried out with stakeholders directly
different experiences of the use of social assistance involved in the design, implementation, or evalua-
mechanisms for energy access. The case study— tion of the government programs and/or research
like the other five, covering Ghana, India, Indonesia, related to them.
Energy Safety Net (ESN) is an umbrella term ESNs can make physical access (i.e. connec-
for government-led approaches to support tions) to electricity or clean fuels affordable for
very poor and vulnerable people to access poor and vulnerable people, or they can make
essential modern energy services, defined as the unit price of electricity or fuel affordable
electricity and clean fuels and technologies to consume. ESNs include some form of tar-
for cooking, by closing the affordability gap geting or eligibility criteria to direct benefits
between market prices and what poor cus- to those who need them.
tomers can afford to pay.
ENERGY SAFETY NETS | BRAZIL CASE STUDY 12Figure 1
Brazil: HDI values by region (2010)
Roraima Amapá
Amazonas
Pará Maranhão
Ceará
Rio Grande
do Norte
Paraíba
Piauí
Pernambuco
Acre
Alagoas
Tocantins
Rondônia Sergipe
Bahia
Mato Grosso
Distrito Federal
Goiás
Minas Gerais
Mato Grosso Espírito
0.77 – 0.83 do Sul Santo
0.74 – 0.76 São Paulo
Rio de
Janeiro
0.72 – 0.74 Paraná
0.69 – 0.71 Santa
Catarina
0.61 – 0.68
Rio Grande
do Sul
Source: Authors' elaboration based on UNDP Atlas 2012 and IBGE 2019.
ENERGY SAFETY NETS | BRAZIL CASE STUDY 13ENERGY ACCESS IN BRAZIL – A CONTEXTUAL OVERVIEW ENERGY SAFETY NETS | BRAZIL CASE STUDY 14
Brazil is an urban-industrial country with an ag- energy’ (Pachauri et al. 2011:36). In this study,
ricultural sector that plays a leading role in the energy poverty is interpreted as the inability of
global economy. One of the country’s most dis- individuals or groups to consume energy services
tinctive characteristics is its energy mix, with a that are affordable and reliable (UNDP 2000; IE/
significant share of its renewable sources, partic- UFRJ 2005), yet it should be noted that it can
ularly in the generation of electric energy, afford- be difficult to separate the definition of energy
ing the sector a low-carbon profile. poverty from the general concept of poverty.
Poverty is often the result of a complex economic Despite the wider definition of poverty concep-
and sociocultural system that favors inequality, tualized in the Brazilian Constitution, the Instituto
and energy access can play an important role in Brasileiro de Geografia e Estatística (IBGE), which
eliminating poverty, isolation and deprivation. carries out the national census, measures poverty
Current definitions of energy poverty focus according to the following values: “extreme pov-
on a lack of modern energy services and the erty” indicates an individual earning below USD
reliance on what is available in nature (IEA 2016). 0.75 per day (BRL 89 per month); while “poverty”
However, such definitions often do not specify is defined as individual income between BRL 89
the reasons for the ‘lack’ of modern energy and BRL 179 per month (USD 1.5 per day) (IBGE
services, which can be linked to a family’s financial 2015). In 2017, the numbers of people living in
constraints and the unaffordability of energy poverty and extreme poverty were 23 million
services, whether energy poverty is the result and 12 million, respectively (IBGE 2019). In Bra-
of geographical isolation (Bouzarovski 2014), zil, energy access is commonly reported using
or a ‘complex combination of factors, including the metric of the percentage of households with
lack of physical availability of certain energy access to electricity and clean cooking fuels–100
types and high costs associated with using percent and 96 percent, respectively, in 2017–see
Table 1
Relevant information about Brazil
Total area of 8,515,759,090 km2; divided in five political-administrative
Territory regions – North, Northeast, Midwest, South and Southeast; composed of
26 states and the Federal District
Population (2018) 209.5 million
Gross Domestic Product – GDP
1,689
(in US$ billions/2018)
GNI per capita
9,140
(in US$/2018)
In 2017, renewables accounted for 43.2% of the Brazilian energy mix,
a significantly higher share than world (13.8%) and OECD (10%) averages.
Energy Mix Biofuels and sugarcane biomass supplied 40.3% of total energy.
Renewables supplied 80.4% of electric energy. Hydraulic sources generated
59.4% of total electricity, natural gas 10.5% and wind 6.8%
Source: IBGE 2018; MME 2018; World Bank 2019
ENERGY SAFETY NETS | BRAZIL CASE STUDY 15Figure 2 (IEA et al. 2019). It is not entirely clear (Ibid 2018:45). It is worth mentioning that while
how well these figures reflect the actual num- firewood is largely used for cooking (Coelho et
ber of households using electricity and modern al. 2018), it also has other uses. In the south it is
cooking fuels. For example, one study noted that mostly used for space heating (EPE 2013), while
in 2004 more than 98 percent of households had in the warmer north, it is also used in livelihood
access to liquefied petroleum gas (LPG) (Jannuzzi activities such as brick and pottery making (Maz-
et al. 2004), while another in 2015 showed that zone 2019b).
54 percent of the population in the northern re-
gions was still exclusively using firewood versus In this context, the next chapter aims to pres-
46 percent relying on LPG (Coelho et al. 2018). ent the design, implementation and evolution of
Similar proportions were observed for the most government programs such as Bolsa Família, Luz
developed regions such as the south and south- para Todos and Tarifa Social, which can indirect-
east, in which firewood is still used by 42 percent ly impact access to and consumption of modern
and 45 percent of the population, respectively energy sources.
Figure 2
Brazil’s progress towards achieving SDG7
Brazil
Region Latin America
and the Caribbean
Subregion South America 100 96 46
Income Group Upper middle income
GDP per capita 9,850
(USD) Access to Electricity Access to Clean Cooking Renewable Energy
(% of population) (% of population) (% of Total Final
Energy Consumption)
Population 207,847,520
Source: IEA et al. 2019
16THE DESIGN, IMPLEMENTATION AND EVOLUTION OF BOLSA FAMÍLIA, LUZ PARA TODOS AND TARIFA SOCIAL ENERGY SAFETY NETS | BRAZIL CASE STUDY 17
BOLSA FAMÍLIA transformed into the Bolsa Escola; the Ministry of
Health launched Bolsa Alimentação; and the Min-
Separate ministries provide separate istry of Mines and Energy launched Auxílio-Gás in
safety nets (mid-1990s to 2003/4) 2001 (more commonly known as Vale Gás after in-
corporation into Bolsa Família in 2003/2004) (Zim-
Modern social assistance programs were developed merman 2006). Auxílio-Gás provided families with
in the mid-1990s with a series of policies emerging BRL 7.50 (USD 1.99) each month to assist with the
to provide food security and eradicate child labor. In purchase of a refill for a 13kg LPG cylinder.
1995, President Fernando Henrique Cardoso initiat-
ed the Social Safety Net Project (Rede de Proteção The introduction of Auxílio-Gás took place in the
Social) aimed at redistributing wealth and protect- context of the liberalization of the cost of oil prod-
ing the most vulnerable people in Brazilian society. ucts in Brazil that started in the mid-1990s and
Attention to the poorest and the most marginalized ended a policy of universally subsidizing LPG that
in Brazil increased in the mid-1990s because of the had lasted from 1954 to 1995 (ANP 2017). This
social consequences of hyperinflation (1985-1994), long-term policy of LPG subsidization was aimed
which increased the divide between rich and poor at helping families buy and refill LPG cylinders
and the number of the extreme poor. and at encouraging a switch in cooking fuels from
wood to modern cooking gas. The liberalization
From 1995 to 2002, 12 programs were progressively of LPG prices meant that policymakers needed to
included in the Social Safety Net Project, including introduce a monthly allowance to support low-in-
Bolsa Escola (School Allowance), Vale Gás (VG) and come families’ continued consumption of LPG
Bolsa Alimentação (Food Stamps). Individual minis- (ANP 2017). According to Coelho et al. (2018),
tries were responsible for specific programs. For ex- generous subsidisation programs aimed at re-
ample, the Ministry of Education implemented the placing firewood with modern fuels such as LPG
Programa Agente Jovem (Youth Program) in 2001, were made available all over the country to make
a cash transfer measure for education that was later LPG affordable for poor people.
Box 1: Support for energy as support for nutrition
It can be argued that supporting a transition to ongoing specific measures aimed at fighting ex-
modern energy sources was not the only rea- treme poverty and hunger went hand-in-hand
son why the Brazilian Government started the with LPG programs to guarantee food security
LPG-support programs. As Zimmerman (2006) and nutrition for the poorest. The joint coordi-
argues that Brazil’s first social protection pro- nation of social safety nets and energy subsi-
gram targeted food poverty and malnutrition. dies for low-income families and marginalized
Cooking meals guarantees nutrient absorption groups can be an effective way to target specific
and increases energy intake. For this reason, aspects of poverty such as malnutrition.
ENERGY SAFETY NETS | BRAZIL CASE STUDY 18Integration into Bolsa Família municipality received a fixed annual budget that
was based on its current number of low-income
A desire to address bureaucratic inefficiencies households. This meant that if any additional
and weak communication between different min- families were identified, conditions of vulnerabil-
istries appears to have driven the unification of ity in the following year would not be included in
different social programs into the Bolsa Família the program (Ibid. 149). For these reasons, the
program, beginning in 2003/2004, as shown in Cadastro Único para Programas Sociais (CAD),
Table 3. For Zimmermann (2006:149), the lack of a unified system that could more easily identify
effective coordination in implementing existing families eligible for more than program was cre-
social policies resulted in leaving newly impov- ated in 2003. This allowed the government to
erished people behind. As an example of these create a unified social safety net program in the
systemic problems, Zimmermann notes that each form of Bolsa Família.
Table 2
The composition of Bolsa Família (values updated to 2019)
COMPOSITION OF
BOLSA FAMÍLIA FOR WHOM? VALUE (IN BRL)
For families living in
extreme poverty
Basic benefit 89
(income up to BRL 89
per family per month)
Conditional benefits (additional)
For families with
children and
Children 41
adolescents
(0-15 years old)
41
Pregnancy For pregnant women
(x 9 months)
For families with
41
Nutrition children
(x 6 months)
(0-6 months)
For families in 48
extreme poverty (each family can
Adolescents
with adolescents accumulate up to two
(16-17 years old) benefits = BRL 96)
Additional support
Benefit against For families living on top of basic benefit
extreme poverty in extreme poverty. (amount varies depending
on circumstances)
Observation
Families living in extreme poverty can accumulate the basic benefit and all the
conditional benefits (pregnancy, nutrition, adolescents) up to a maximum of BRL 372 per month.
In addition, families can accumulate up to one benefit against extreme poverty.
Source: Authors' elaboration based on CAIXA 2019
ENERGY SAFETY NETS | BRAZIL CASE STUDY 19According to the official government website cartão to pay for designated goods and services.
CAIXA i, the main objectives of Bolsa Família are: In 2019, the value of the basic benefit of the allow-
ance was raised to BRL 89 per month (USD 23.59).
1. to fight hunger and promote food and nutri- Details of the basic benefit and the conditional
tional security benefits, i.e. those granted in addition to the basic
2. to fight poverty and other forms of deprivation benefit based on family composition, are shown
3. to promote access to public services, espe- in Table 2.
cially health, education and social assistance.
In addition to Bolsa Família, the government also
Bolsa Família supports families with children liv- provides support to households through the Zero
ing below the poverty line to different degrees Hunger (Fome Zero), My Home My Life (Minha Casa
depending on their situation. Each family receives Minha Vida), and the Green Grant (Bolsa Verde)
a cash card (cartão) to which the benefit amount programs. For more details of the evolution of so-
is transferred monthly. Cardholders then use their cial assistance policies, see Figure 3.
Figure 3
Timeline: Introduction of Social Policies in Brazil (1995-2011)
Bolsa Verde
Ministry of Social Development
Credits to rural low-income families categorized
2011
Tarifa Social as traditional groups to conserve and develop
sustainable management of the land
Ministry of Mines and Energy
Social tariff for electricity, targeted at poor
2010
and vulnerable households
9 million households benefit
2009
Minha Casa Minha Vida
2008 Ministry of Social Development
Safe shelter and housing (tax reduction and
credits for low-income families)
2007
2006
Bolsa Família
2005 Ministry of Social Development
Auxílio-Gás/Vale Gás Unified cash transfer for low-income families
(includes Auxílio-Gás/Vale Gás )
Ministry of Mines and Energy 2004 Benefited 36 million people between 2006 and 2015
Low-income families receive BRL 15 every two months
to support LPG consumption
2003 Luz para Todos
Programa Agente Jovem
Ministry of Mines and Energy
Ministry of Health 2002 Provides electricity connections to unelectrified
Cash transfer to young people between households
15 and 17 years old living in extreme poverty and 3.4 million new connections provided by 2018
social risk (BRL 65 per month) () 2001 Extended four times – now targeting universal
access by 2022
Bolsa Escola
2000
Ministry of Education
Schooling allowance (cash transfer) to low-income
families with young children to boost school attendance 1999
Bolsa Alimentação
1998
Ministry of Health
Food stamp Program Renda Mínima
1997
Municipality distributed cash transfer
Targeted low-income families with young children
Programa de Erradicação do Trabalho Infantil 1996
Ministry of Health 1995
Cash transfer to children aged 7 – 14 to prevent
FHC
their employment
25 BRL (rural)/40 BRL (urban)
LULA
Source: Authors' elaboration based on Zimmermann 2006 and MDS 2019
ENERGY SAFETY NETS | BRAZIL CASE STUDY 20Box 2: Cadastro Único (CAD), Single Registry for Social Programs
In 2002, a self-identification registry callled Ca- called RANI in the case of indigenous peo-
dastro Único (CAD) was created to facilitate the ple) and national insurance number (Carteira
distribution of social programs and to act as the de Trabalho).
‘gateway for poor people to access a set of over 20 • The condition for enrollment in the CAD is
policies’ (MDS 2015). This includes Bolsa Família that the household’s income should not ex-
and Tarifa Social (as per Decree 9357/2018) as well ceed three minimum wages. In the case of
as other sectoral programs such as the Water for a single person household, the beneficiary
All Program. The CAD is ‘the main tool for the should not earn more than one minimum
state to select and include low-income families wage monthly. In 2019, the national minimum
in federal, state and municipal programs aimed wage was equivalent to BRL 998 per month
at inclusive social participation in public policies’ (USD 246), but state governments can vary
(IBGE/PNAD 2014:22). the level of the minimum wage depending
on local living standards.ii
The enrollment guidelines developed by the MDS • The beneficiary must notify the CAD of any
outline the application procedure as follows: changes in the household’s situation (house-
hold income, change of address).
• A member of the family (generally the house-
hold head) is responsible for providing infor- In a household survey released by IBGE in 2014,
mation about the other family members. The 40.6 percent of households surveyed in Brazil
MDS clearly states: ‘the person – named as were not aware of the existence of CAD and
Person Responsible for the Family Unit (RF) – were not fully aware of all social assistance pro-
must be at least 16 years old, and preferably grams to which they may be entitled (IBGE 2016
be a woman’ (MDS 2015). p.26). This finding was corroborated during
• The person must visit a Social Assistance Of- the first stakeholder workshop organized by
fice (CRAS) to enroll. In many cases the com- COPPE/UFRJ for this research project in June
pilation of relevant information is carried out 2019. Several participants flagged how citizens,
by social workers. mainly in remote areas, are often unaware of the
• The only documents requested for the enroll- main information regarding social policies in the
ment in CAD are the RF’s identify card (also country.
ENERGY SAFETY NETS | BRAZIL CASE STUDY 21LUZ PARA TODOS i) Initiatives led by foreign investments and pri-
vate companies (1879-1930)
Electricity access prior to Luz para ii) Creation of the state-owned company
Todos Eletrobras, which held a monopoly over the
sector and expansion of the hydroelectric
Prior to the introduction of Luz para Todos in park (1930-1990)
2003, household electricity coverage was 93 per- iii) Privatization of the electricity sector and cre-
centiii (urban and rural) with 97 percent access in ation of the Electricity Regulator – ANEEL
urban areas and 70 percent in rural areas (IBGE (1990-2003)
2002). This result was realized by alternating iv) Reform of the electricity sector, rural electri-
stages of public and private investments that can fication and energy development that is now
be divided into four main phases: subsidized by the government (2003-today).
Figure 4
Population with access to electricity, 1960-2000
TOTAL URBAN RURAL
180
168.2
160
145.6
137.0
140
117.3
120
POPULATION (MILLIONS)
110.1
100
89.9
79.3
80
69.2
60
51.5 50.3
38.6 38.0
40 35.5
33.2
39.5 31.2
30.5
18.3
20
0
1940 1950 1960 1970 1980 1990 2000 2010
Source: Authors’ elaboration based on ANEEL 2002 and IBGE 2000
ENERGY SAFETY NETS | BRAZIL CASE STUDY 22The second and third phases were when the bulk Electricity sector reform and the of residential electricity access was achieved, es- launch of Luz para Todos pecially in urban areas where every urban house- hold that requested a connection from the local In 2002, a significant shift in the electricity sec- energy company distributor was provided with tor occurred when the rules for achieving uni- one. However, in rural areas, consumer demand for versal electricity access became stricter. Law new electricity connections was largely ignored, Nº10,438/2002 required electricity distribution resulting in the development of private initiatives. companies to respond to new requests for res- Rural households organized themselves into en- idential electricity connection within three days ergy cooperatives that would carry the costs of in urban areas and five days in rural areas and rural electrification. In return for covering these prevented them from charging the final consum- costs, rural consumers received large discounts er for the costs (ANEEL 2016). The 2002 law also on their electricity bills from the local energy en- required energy distribution companies to main- terprise responsible for that area. According to tain all new electric connections free of charge to one of the energy stakeholders interviewed for the final user. Funding comes from various sourc- this report: "rural electrification from 1930s to es but flows through the Conta de Desenvolvi- 1990s was largely driven by private initiatives and mento Energético or CDE (Account for Energy the creation of energy cooperatives" (AMX 2019). Development) (see Box 3). From 1990 to 2002, rural electrification became a concern for the government and several initia- Building on reforms, Brazil launched Luz para To- tives, including Luz no Campo (Light in the Coun- dos in 2003, with the aim of providing access to tryside) and PRODEEM (the Brazilian Program for electricity in still-unserved rural areas. According Rural Electrification Using Photovoltaics – 1996- to the IBGE, more than 2 million rural households, 2003),iv set out to provide rural households with or over 12 million Brazilians, lacked access to elec- electricity access in the form of renewable elec- tricity in 2002. Further aggravating their exclusion, tricity. These programs were largely funded by approximately 90 percent of these households foreign enterprises and development finance were estimated to be living in areas with a low HDI institutions. and on less than three times the minimum wagev Box 3: Conta de Desenvolvimento Energético (CDE), Account for Energy Development Conta de Desenvolvimento Energético (CDE), provided through Tarifa Social (affordability) Account for Energy Development was established and supports Conta de Consumo Combustivel in 2002 under Law Nº10,438/2002 and is regulated (CCC), the cross-subsidization account. The by the ANEEL. The CDE covers the costs of CDE is financed through levies added to universal energy access, funds the subsidies consumer electricity bills. ENERGY SAFETY NETS | BRAZIL CASE STUDY 23
2
i.e. the level at which 2households were eligible ued expansion of the hydropower park and ex-
2
for support from Bolsa
2
Família2 and
2
other social tension of the national grid, starting with urban,
safety nets.
2
2
2 3
densely populated areas and then moving to ru-
2
2 2 5
2 2 ral and
2 isolated areas. The reliance on hydropow-
2 2 2 3
4
2 Initially, the Luz para Todos program 2 was to 2end er for3 electricity generation entails a complex
2 2
in 2008, but it was subsequently 3 3 extended sev- 2 organization
3
of
2 resources and interconnections
2 2
eral times, most recently to 20222 (under Decree
2 2 between the reservoirs, 3 in addition to distribu-
2 2 2 2 2 3
2 2 2 2 3
29357 of 2018). The 2 initial target of connecting 12 tion to the 4 final2 consumer.
3
2
2 2
2
2 2
2
million
2 rural
2
3
2
people 2 by 2008
2 3 has been
3
2 revised
2 to 2 E 2 33
2 2
2 52 22 2 5 2
2 2 2 2 2 2 2
4
that of achieving universal access 2 2
3 by 202232
(MME
2 2
In2 20173 2
the national interconnected grid covered
4 2 4
2 2 2 2
2015; 2017;22019).
2
2 2 2
2
2 2
3 2 141,388
3 2 km across the south and east of the coun-
3 3 3
3 23 2 2
2 2
2 2 3 2
try 3(see Figure
3 2
5) but remained largely absent
2 2 2 2
The2 2limitations
2 2
2 of2 grid
2 2
extension
4
2
for2 33 2
in the state2 of
3
3
Amazonas and in parts of Acre,
2 2
providing33electricity access
2 3 2 3 32 3
2
2 2 2
4 2
2 Mato Grosso,4 2 Roraima, Pará and Amapá (the Le-
E E
2 2 3 3 2 3 2 3
2 2 2 2 3 2 3
2 2
2
2 2 2
22
22
2 gal2 Amazon). The grid is unlikely to be expanded
2 3
2 2
3 2 2 2
3
4
2
The preferred strategy 2for increasing
D 2 2 electricity into2 the Amazon forest for a number of reasons
2 2
2 2 2 2
2 2 access in Brazil
2 2 has been characterized
6
3 by2 contin-
2 2 (ANEEL
3 2010). These include the geomorpholo-
C
2 2 2
2 2 2 2 2
2 2 2
A 2
3
2
3
2 2 2 4 2 8 4 2
2 2 2
B2
2 2 3
3 2 Figure
2 3 5
3
2
2
3
2
7
4
3
2
2 2
4 2 23 2 2
National
3
2 2 Grid Coverage
3 2 3
3
2 2
2 2
2 D 2 2
2
2
2 D 2 2
6 2 2 2 26 2 2
2 22
C 2
2 C 2
2
A 2 A 2 2 2
2 28 2
8 2 2
2
2 2 2 2
2
B B
3 2 3 2
7
2 2 5 3 7 3
2
4 2 4 2 2 2 3 2
2 2 5
2
3 2 3
2 2
4 3 4 3 2 2 2 3
4
3 2 3 2 2
2 3
2 2
2 2 3 3 2
2 2 3 2
2 2
2 2 2 2 2 3
2 2 2 2 3
2 2 3 3
4 2
2 2
2 2
2
3
2
2 E 2
3
3
2 2
2 2 2 2 2
2 2
3 2 2
2 2 4 2
2 2 2 2
2 2
2 2 5 2 2 5 2 2
3
2
2 2
2
Existing Planned
2
Complex 2 2 3
138 kV 2 2 4
PARANÁ 2 2
230 kV 3 2
2 3
2 2
345 kV PARANAPANEMA 2 2
2 2 2
440 kV 3
GRANDE 2 D 2 2
500 kV 6 2 2
2
750 kV PARANAÍBA C 2
2
A 2 2
8 2
PAULO AFONSO 2
B 3 3
7
4 2
Existing Planned 2 Number
Existing
Complex
Planned Complex
of existing circuits 4
3
3
3
2
8 kV 138 kV 2
PARANÁ PARANÁ 2
0 kV 230 kV 2 2
5 kV 345 kV PARANAPANEMA PARANAPANEMA
0 kV 440 kV 2 2
GRANDE GRANDE 2
2
0 kV 500 kV 2 2 5
0 kV 750 kV PARANAÍBA PARANAÍBA 2
PAULO AFONSO PAULO AFONSO
2 2 Number of existing circuits
Number of existing circuits
Source: ONS 2017 138 kV
Existing Planned Complex
PARANÁ
230 kV
345 kV PARANAPANEMA
440 kV
GRANDE
500 kV
750 kV PARANAÍBA
ENERGY SAFETY NETS | BRAZIL CASE STUDY PAULO AFONSO 24
2 Number of existing circuitsgy of the Amazon forest with its thick vegetation; eas with the lowest electrification rates and low-
low-density population and the low return over est HDI values in Brazil.
investment on energy development projects in
this area. Moreover, the Amazon forest hosts one The Ministry of Mines and Energy (MME) iden-
of the most ethno-culturally diverse populations tified specific contexts in which access to elec-
living in natural parks and sustainable reserves tricity was particularly challenging, such as vul-
where development plans are not encouraged nerable indigenous or traditional communities
by conservation plans. living in remote and sensitive ecosystems (nat-
ural parks, extractive reserves and indigenous
The area outside national grid coverage is called lands). In these areas, the MME ascertains that,
the isolated system. It is composed of medi- as the national grid can not be expanded, local
um-size thermopower plants supplying energy to populations should be served by renewable and
the consumers of the northern states (Amazonas, decentralized systems (ANEEL 2017). Among
Pará, Rondonia, Roraima, Amapá and Mato Gros- the available technological options, the MME
so as well as the island of Fernando de Noronha). encourages mini- and micro-hydropower plants,
As Figure 6 shows, the territory covered by the thermopower plants fueled by biofuels or nat-
isolated system corresponds in large part to ar- ural gas, wind power, and solar photovoltaics.
Figure 6
Access to Electricity by State, 2010
Roraima Amapá
Amazonas
Pará Maranhão
Ceará
Rio Grande
do Norte
Paraíba
Piauí
Pernambuco
Acre
Tocantins Alagoas
Rondônia
Sergipe
Bahia
Mato Grosso
Distrito Federal
Goiás
Minas Gerais
98% – 98.99% Mato Grosso
do Sul Espírito
Santo
97% – 97.99% São Paulo
Rio de
Janeiro
95% – 96.99% Paraná
94% – 94.99%
Santa
Catarina
91% – 93.99%
Rio Grande
77% – 90.99% do Sul
Source: Authors' elaboration based on UNDP Atlas 2012 and IBGE 2010.
ENERGY SAFETY NETS | BRAZIL CASE STUDY 25In addition, there are hybrid systems involving a example, if the electricity distribution company in
combination of options including diesel/renew- the state of Amazonas received two connection
able hybrids (ANEEL 2017). requests in the same period, one in a peri-urban
village and the other in a quilombola village, they
Shifting focus to prioritize those left should connect the quilombola one first, even if
furthest behind the peri-urban request (because of geographical
vicinity) were easier to connect in terms of dis-
The priorities of Luz para Todos have evolved over tance and cost.
time. Initially the program prioritized low-HDI
communities located near the grid, whose con- TARIFA SOCIAL
nection was at the lowest cost. As these near-grid
communities were connected, the focus shifted The history of subsidized electricity
to more remote communities and then, in the fi- consumption
nal phase, to families located in regions farthest
from the grid, especially in the Amazon. In recent The Luz para Todos program aims to achieve
years, Luz para Todos has targeted low-income universal electricity access, but once con-
families, ethnic minorities and vulnerable popu- nected, how do low-income families pay for
lations living in protected areas such as national their electricity services? Gomes and Silveira
parks, extractive reserves and conservation areas (2012:160) suggest that the creation of social
(Decree Nº 9357/2018). These areas correspond tariffs is ‘instrumental in the process of ensur-
to the regions with the lowest HDI in Brazil – see ing the sustainability of the [universal electrici-
Figure 6. ty access] program’. This led to the creation of
a social tariff to complement Luz para Todos
To accelerate the completion of Luz para Todos in and ensure affordability of electricity by con-
rural areas, the MME issued a regulation in 2012 sumers. The Tarifa Social program was created
requiring energy distributors (currently still rely- under Law Nº12,212/2010 and is the most im-
ing on the CDE to finance universal electricity ac- portant subsidy for electricity consumption for
cess)vi to give priority to remote communities and low-income people. While the tariff was only in-
‘traditional’ groups. The Ministry of Environment troduced in 2010 (considerably after the launch
(MMA) categorizes these as specific groups of of Luz para Todos), discounts on electricity
people who share distinctive low socioeconomic consumption had been used since 1985 in the
status, geographies and sociocultural identities, context of economic recession, inflation and
including: a) indigenous Indians; b) Seringueiros high national debt. Prior to 2010, discounted
(rubber workers); c) Quilombolas (people of Af- tariffs were not introduced explicitly as a tool
rican-Brazilian heritage); Castanheiros (nut col- to reduce energy poverty. Due to economic re-
lectors); d) Quebradeiras de coco-de-babaçu cession, the demand for electricity in the late
(babaçu coconut workers); e) Pescadores Arte- 1980s and 1990s decreased. This coincided
sanais (artisanal fishermen); f) Ribeirinhos (river- with several hydropower plants (commissioned
ine people); g) Ciganos (Romani people); and h) during the 1970s) coming onstream. As a result,
Caatingueiros (people living in the Caatinga bi- the supply of electricity exceeded demand and
ome) among others (MMA 2017). Luz para Todos consumers were encouraged to consume more
relies on these categories to prioritize future con- electricity with the introduction of discounted
nections. The 2012 regulation stipulated that the tariffs (Tavares 2004). Hence, discounted tar-
most vulnerable and marginalized groups should iffs were originally a way to increase electricity
be given priority for electricity connection. For consumption and avoid financial losses on in-
ENERGY SAFETY NETS | BRAZIL CASE STUDY 26vestment in the hydropower plants operating permanent disabilities (of any age).vii Households
during the economic crisis. with a BPC beneficiary also receive discounts on
their total electricity bill.
A volume-differentiated tariff that
varies by region and beneficiary Electricity tariffs in Brazil also vary by region.
group The average tariff in 2018 was 0.568 BRL/kWh
(ANEEL 2019). This means that without the dis-
Tarifa Social has two components – one targeted count, a family consuming 30kWh would pay BRL
at low-income households and the other at the 17.00 (USD 4.10) per month. With a discount of
most vulnerable marginalized social groups. 65 percent the family would pay BRL 5.95 (USD
1.44). In addition to the volume-differentiated
To be eligible for the low-income Tarifa Social, discount, electricity is also cross-subsidized in
households must be enrolled in the CAD. The Tar- some regions, especially in the northern regions
ifa Social is a volume-differentiated tariff. A lifeline where the costs of generation and distribution
block mandates that if a household consumes 30 of energy are higher than in other parts of the
kWh per month or less, they will receive a 65 per- country. Here, consumers of isolated systems
cent discount on their electricity bill. As a house- receive electricity generated by decentralized
hold’s monthly electricity consumption increases, thermal power plants that rely on fossil fuels. The
the percentage discount decreases (see Table 3). lack of energy infrastructure together with low
population density and large distances between
The same tariff structure is also available to vul- urban centers contribute to high prices of goods
nerable groups of people likely to be affected by and services. Higher tariffs than in other regions
energy poverty, such as the elderly and disabled. would be needed to cover the extra costs of gen-
The Benefício Assistencial ao Idoso e à Pessoa eration compared to electricity generated by the
com Deficiência (BPC) or Benefit for Elderly and national grid. Given that these northern areas
Disabled People, is a cash transfer program tar- have some of the lowest HDI values in Brazil, fos-
geting older people (over 65) and people with sil fuels for transportation, cooking and electricity
Table 3
Tarifa Social for low-income households
MONTHLY CONSUMPTION
QUOTA (MCQ) DISCOUNT (%)
MCQTable 4
Tarifa Social for indigenous groups
MONTHLY CONSUMPTION
DISCOUNT (%)
QUOTA (MCQ)
MCQBOLSA FAMÍLIA, LUZ PARA TODOS AND TARIFA SOCIAL: IMPACTS AND INSIGHTS ENERGY SAFETY NETS | BRAZIL CASE STUDY 29
BOLSA FAMÍLIA AND THE IMPACTS fers lifted 3.4 million people out of extreme pov-
OF THE LPG ALLOWANCE erty and 3.2 million out of poverty (IPEA 2019).
Currently in Brazil there are 13.9 million people
Poverty reduction receiving the benefit (MDS 2019).
The numbers of poor and extremely poor people Bolsa Família represents an important resource
in Brazil totaled 59 million and 25 million, respec- for low-income families. However, two issues—
tively, in 2001 (IBGE 2019). While these numbers diversion to other goods and services, and failure
decreased slightly in the 2000s, it was only after to keep pace with real cost increases in LPG—
the launch of Bolsa Família in 2006 that the num- raise serious questions over the continued effec-
bers decreased significantly, to 14 million and 5 tiveness of the program in supporting energy ac-
million respectively in 2014 (IBGE 2019). Between cess for the most disadvantaged groups.
2006 and 2015, Bolsa Família benefited 36 million
people and increased living standards in Brazil Challenges of subsidizing energy
(IDB 2015:38). Its coverage among the poorest 20 access within Bolsa Família
percent of the Brazilian population has increased
over time, reaching 60 percent in recent years. During the second stakeholder workshop, par-
Its incidence coefficients—measuring the redis- ticipants (energy stakeholders, academics and
tributive impacts of the first real disbursed by NGOs) were asked about the effectiveness of
the program—have also become more negative, consolidating diverse safety nets under Bolsa
which indicates the measure has become increas- Família. The participants disagreed with the anal-
ingly progressive. About 70 percent of the ben- ysis in the literature discussed above that this in-
efits of Bolsa Família have reached the country’s tegration helped the government to have better
poorest 20 percent. In 2017, Bolsa Família trans- control over the transfer, thus minimizing the risk
Figure 7
Evolution of poverty in Brazil
PEOPLE IN EXTREME POVERTY PEOPLE IN POVERTY
70
62
61 60
59 59 59 59
60 58 58
56 56 56
53
52 52 52
49
50 47
42
40
MILLION PEOPLE
40 37
34
30
29 29
30 28 28 28
26 26 26 26
24 24 25 24 24
23
22 22
21
20 17
17
14 14 13 12
10 10
10 8
0
90
91
92
93
94
95
96
97
98
99
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
0
0
0
0
0
0
0
0
0
0
20
20
20
19
20
20
20
19
19
19
19
19
19
19
19
20
20
20
20
20
19
20
20
20
20
Source: Authors' elaboration based on IBGE 2019
ENERGY SAFETY NETS | BRAZIL CASE STUDY 30of fraud, arguing that the consolidation neither the market price of LPG and the fall (in real terms)
simplified the process nor reduced bureaucracy. of the value of the Bolsa Família with inflation
averaging 6.5 percent in the 2000-2017 period
In addition, participants suggested the delivery (IPEADATA 2019). This inability to keep pace with
of Bolsa Família limited its ability to promote inflation may also have led to recent increases
energy access. Families receiving Bolsa Família in the numbers of poor and extremely poor be-
simply receive a lump sum cash transfer each tween 2015 and 2017.
month with no limitations attached to how it may
be spent. No assessment was found as to wheth- Table 5 shows the nominal annual price of LPG in
er the LPG portion of Bolsa Família contributed comparison to the value of the Bolsa Família in Bra-
to household energy expenditure, however, it zilian reals, both of which have increased in recent
appears that ‘invisibility’ of the energy access years. The figures are not directly comparable be-
subsidy within the non-earmarked Bolsa Família cause Bolsa Família is paid monthly, while a cylin-
means families have the freedom to allocate their der may last longer than one month. However, the
LPG allowance to other goods (mostly food and bottom row clearly illustrates that for a household
educational materials). As a result, the govern- to consume the same amount of LPG, they had to
ment is considering a return to the old Vale Gás use more of their Bolsa Família transfer in 2019 than
voucher program exclusively aimed at subsidiz- in 2015, i.e., the cost of a 13kg cylinder represent-
ing the monthly purchase of an LPG cylinder. ed 58 percent of the monthly Bolsa Família in 2015,
while in 2019 it represented 79 percent of its value.
The value of Bolsa Família has not
kept pace with the cost of LPG Moreover, the liberalization of the LPG market ini-
tiated in the mid-90s leading to a complete with-
The workshop participants also highlighted that drawal of subsidies by the end of 2000 (Coelho et
the amount of money transferred under the Bol- al. 2018) also created regional disparities. For ex-
sa Família has become increasingly insufficient ample, monthly reports released by the MME show
to cover the purchase of LPG. The impact varies that the northern region has the highest prices for
between regions, due to disparities in delivery LPG due to the distribution margin and transporta-
costs, and has been compounded by the rise in tion costs (MME 2015 N109, 2015: 9).
Table 5
Nominal price of LPG and value of Bolsa Família
2015 2016 2017 2018 2019
Value of monthly
77 82 85 89 89
Bolsa Família transfer (BRL)
Cost of 13 kg LPG (BRL) 45 50 55 65 70
Cost of LPG cylinder as
share of value of monthly 58% 61% 65% 76% 79%
Bolsa Família transfer
Source: Authors' elaboration based on ANP 2019 and Ministry of Social Development 2019
ENERGY SAFETY NETS | BRAZIL CASE STUDY 3141.6 41.6
38.6 38.6
2010 38.2 2010 38.2
36.2 36.2
Figure 8 38.5 38.5
Real price variation of LPG (to final user) by region in Brazil, 2007-2016
41.4 41.4
39.0 39.0
2011 38.5 2011 38.5
CENTRE-WEST SOUTH SOUTHEAST NORTHEAST NORTHERN REGION
CENTRE-WEST SOUTH
36.4 SOUTHEAST NORTHEAST NORTHERN
CENTRE-WEST
REGION SOUTH
36.4 SOUTHEAST NORTHEAST NORTHERN
PRICE VARIATION OF LPG (BRL/CYLINDER)
39.6 39.6
0% PRICE
10%VARIATION
20% OF30%
LPG (BRL/CYLINDER)
40% 50% 60% 70% PRICE VARIATION OF LPG (BRL/CYLINDER)
0% 10% 20% 30% 40% 50% 60% 70% 0% 10% 20% 30% 40% 50% 60% 70%
35.3
35.3 41.9 35.3 41.9
33.6
33.6 39.9 33.6 39.9
2007 32.2
2012
2007 32.2
32.7
39.4 2012
2007 32.2 39.4
32.7 37.3 32.7 37.3
34.3
34.3 40.4 34.3 40.4
35.0
35.0 43.7 35.0 43.7
33.8
33.8 41.3 33.8 41.3
2008 32.3
2013
2008 32.3 41.1 2013
2008 32.3 41.1
33.3
33.3 39.4 33.3 39.4
34.8
34.8 43.6 34.8 43.6
38.9
38.9 45.6 38.9 45.6
36.4
36.4 42.4 36.4 42.4
2009 35.2
2014
2009 35.2 43.1 2014
2009 35.2 43.1
35.0
35.0 42.0 35.0 42.0
35.8
35.8 46.5 35.8 46.5
41.6
41.6 51.7 41.6 51.7
38.6
38.6 48.5 38.6 48.5
2010 38.2
2015
2010 38.2 47.5 2015
2010 38.2 47.5
36.2
36.2 47.0 36.2 47.0
38.5
38.5 53.3 38.5 53.3
41.4
41.4 60.5 41.4 60.5
39.0
39.0 55.7 39.0 55.7
2011 38.5
2016
2011 38.5 52.6 2016
2011 38.5 52.6
36.4
36.4 52.2 36.4 52.2
39.6
39.6 59.5 39.6 59.5
0% 10% 20% 30% 40% 50% 60% 70% 0% 10% 20% 30% 40% 50% 60% 70%
41.9
41.9 41.9
39.9
39.9 39.9
2012 39.4
2012 37.3
39.4 2012 39.4
37.3 37.3
Source: Authors' 40.4
elaboration based on ANP 2017
40.4 40.4
32
43.7
ENERGY SAFETY NETS | BRAZIL CASE STUDY
43.7 43.7
41.3
41.3 41.3
2013 41.1
2013 39.4 41.1 2013 41.1Impact of the increase in LPG price on However, since 2013, levels of residential fire-
energy access wood consumption have shown a slight increase
(to 20.4 kilotons in 2015) while consumption of
According to Gioda (2019:373) ”the use of fire- LPG has remained constant (Figure 9). Although
wood by the low-income population seems to their analyses use different methodologies,viii this
be directly associated with the price of LPG. In increase was corroborated by the IBGE that cal-
general, the firewood used by this population culated that there was an increase to 17.6 percent
is of ’picking’ quality (gathered from the land in households using firewood as fuel for cooking
without cost) and the stoves are rustic”. Figure in 2017 compared to 16.1 percent in 2016 (IBGE
9 presents data from the state-owned Energy 2019; Gioda 2019). More research is needed to
Research Company (EPE 2017) showing a de- understand how the recent economic crisis com-
crease in the use of residential firewood con- bined with the increase of LPG prices has impact-
sumption from 2008 to 2013 (from 24.9 to 18.5 ed fuel choices in low-income households.
kilotons) along with a corresponding increase
in LPG consumption. This supports the asser- To minimize the impacts of the increase in LPG price
tion by Coelho et al. (2018) that the LPG sub- on energy access, workshop participants also rec-
sidization policies contributed to a 22 percent ommended decreasing fees and taxes on LPG and
reduction in households consuming firewood providing subsidies for the purchase of solar stoves
between 2002 and 2012. in rural areas with poor LPG distribution networks.
Figure 9
Residential consumption of firewood and LPG in Brazil, 2008-2017
FIREWOOD LPG
11 26
24.85
10.81 25
10.8
24.28
10.69
Annual firewood consumption (103t)
10.67 10.75
Annual LPG consumption (103m3)
24
23.47 10.70
10.6
23
10.41
10.46
10.4 22
10.30
20.87
10.2 21
20.98 20.43
19.72 20
19.70
10
10.00 19.56 19
9.89
9.8
18.52 18
9.6 17
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Authors' elaboration based on EPE 2017
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