With data from the nearly 6,000
households in the Nepal Living Standards Survey of 2010–11,
this paper finds that the mean reduction in household
firewood collection associated with use of a biogas plant
for cooking is about 1,100 kilograms per year from a mean of
about 2,400 kilograms per year. This estimate is derived by
comparing only households with and without biogas in the
same village, thus effectively removing the influence of
many potential confounders. Further controls for important
determinants of firewood collection, such as household size,
per capita consumption expenditure, cattle ownership, and
unemployment are used to identify the effect of biogas
adoption on firewood collection. Bounds on omitted variable
bias are derived with the proportional selection assumption.
The central estimate is much smaller than those in the
previous literature, but is still large enough for the cost
of adopting biogas to be significantly reduced via carbon
offsets at a modest carbon price of $10 per ton of CO2e when
using central estimates of emission factors and global
warming potentials of pollutants taken from the scientific literature.