Towards more efficient fuel use<\/p>\n
By Otto Soemarwoto<\/p>\n
JAKARTA (JP): Fuel has been heavily subsidized by the
\ngovernment. Before the recent price hikes the subsidies amounted
\nto Rp 27.54 trillion consisting of Rp 16.17 trillion for oil and
\nRp 11.37 trillion for electricity. In accordance with the IMF
\nagreements the subsidies must be gradually abolished.
\nConsequently, the prices of fuel and electricity were increased.
\nThis, however, caused protests and riots, and after consultation
\nwith the legislature the government reduced the price increases.<\/p>\n
In theory the fuel subsidies are to help the poor. For this
\nreason about 68 percent of the total subsidies were for kerosene,
\nsupposedly the main fuel used for cooking by the low and the low-
\nmiddle income people. However, according to Potensi Desa (village
\npotential) statistics of 1990, in the rural areas only in a very
\nsmall percentage of kelurahan (subdistricts), i.e 3.2 percent,
\nwas kerosene used for cooking. In most kelurahan the people used
\nwood. Therefore, most villagers did not benefit from the kerosene
\nsubsidies. Even in urban areas 35.8 percent of kelurahan used
\nwood. In the middle and high income families gas is the primary
\nfuel for cooking. Wood is not used at all.<\/p>\n
Another important use of kerosene is for lighting. In the
\nvillages kerosene lamps are used for reading mostly by the well-
\nto-do families, and even then only until about 8 p.m. to 9 p.m.
\nAfter that very simple small wick lamps are used. The poor
\nfamilies mainly use this latter type of lamp. In cities of
\ncourse, electricity is used for lighting. But lower income
\nfamilies use only a small amount of electricity, usually just a
\nfew low wattage lamps. The richer people become, the more they
\nuse electricity for all kinds of electric goods, such as TVs,
\nelectric and microwave ovens, kitchen utensils, refrigerators and
\nwashing machines. It is not unusual to find the entire house of
\nthe rich air-conditioned.<\/p>\n
A major use of oil as fuel is for transportation. Many high
\nincome families have more than one car, often three or even more,
\none for the husband, one for the wife, one for the children and
\none for the maid to shop for daily needs. In upper income
\nfamilies the adult children may each have a car for their own
\nuse. Before the current economic crisis middle income families
\nwere also eager to have more than one car and the upper-lower
\nincome families were starting to acquire cars, albeit old second-
\nhand ones. As a result the rate of growth for the number of cars
\nhas been high, and consequently, also the rate of growth for the
\nvolume of traffic. Hence, although many new roads have been built
\nand existing ones broadened, the roads have not been able to keep
\npace with the increasing volume of traffic, even in large cities,
\nlike Jakarta, where highways and toll roads have been
\nconstructed. Increasingly, troublesome traffic jams occur in many
\ncities.<\/p>\n
People have electrical household goods and cars not merely to
\nenjoy their services, but because they have become important
\nsymbols of status, success and modernity. Being symbols they have
\nto be shown conspicuously. This in turn has a strong
\ndemonstration effect, driving the desire of other people to own
\nthem too. On the one hand this has the positive effect of
\nstimulating the economy, but on the other it leads to a highly
\nresource depleting and polluting lifestyle. Cars, the number one
\nstatus symbol, are used for short distances. This can be inferred
\nfrom the statistical data of 1996 that most households live at
\ndistances of less than 4 km from shops and markets, schools and
\nrecreation areas. This can also be clearly seen from maps of
\ncities like Bandung, Yogyakarta, Denpasar, Medan and
\nUjungpandang, just to name a few. Even in the city of Jakarta
\nthousands of households are located within a distance of 5 meters
\nof Jl Sudirman-Jl Thamrin and Jl Rasuna Said, the main business
\ncenters of Jakarta. People living in Kebayoran Baru also live not
\nvery far from shopping centers and public buildings, such as
\nschools, mosques and churches. In fact, the spatial structure of
\ncities in Indonesia is such that offices, shops, markets, schools
\nand public buildings are interspersed with residential houses. Of
\ncourse, there are many people who do live at considerable
\ndistances from their workplaces, particularly with the
\nproliferation of satellite towns around major cities. But the
\nimportant point is that undoubtedly many car trips are of short
\ndistances of less than 5 kilometers, which is a very inefficient
\nuse of cars and gasoline. The inefficiency is made worse by the
\nfact that in the upper and middle income families cars often
\ncarry only one passenger. The traffic jams and one-way traffic
\nsystems also increase the inefficiency of fuel use.<\/p>\n
Traffic is also an important cause of heat islands in cities.
\nThese are areas of higher temperatures surrounded by cooler
\nareas. There is no quantitative data on heat islands in
\nIndonesian cities. Qualitatively, however, such heat islands are
\nbeing experienced by people in the larger cities. People who have
\nresided for a long time in Bandung, say since the 1950s, complain
\nthat Bandung is not cool anymore. While in former years sweaters
\nhad to be worn in the evenings and early mornings, they are not
\nneeded now. Because of the heat islands, more middle and upper
\nincome families install air-conditioning in their homes. Their
\ncars are also air-conditioned. But air-conditioning also
\ncontributes to higher heat islands. The lower income people,
\nhowever, travel on public transportation which is often crowded
\nand does not have air-conditioning. Therefore, as we go up the
\neconomic ladder more fuel is being consumed per family, both
\ndirectly to fuel cars and indirectly by consuming more
\nelectricity. Consequently, the higher the income, the more the
\nfuel subsidy is enjoyed. As mentioned above, even the kerosene
\nsubsidy does not get to the poor people. Clearly, this is an
\nunfair system. The increase in fuel prices exacerbates the
\nunfairness, because the lower income families are harder hit by
\nthe higher fuel prices.<\/p>\n
A fairer system would be to force those who use more fuel to
\npay an increasing tax for private car ownership, preferably by a
\nsteep progressive system, i.e. the second, third, etc. car would
\nhave steep increases in tax. Conversions of green areas for
\nparking lots could be limited and heavily taxed, because they
\nalso contribute to the problem of overland flow and floods, and
\nthe creation of heat islands. As a consequence, parking lots
\nwould be reduced and parking fees would be increased. These
\nmeasures would force the people to use their cars more
\nefficiently which would result in less fuel consumption, and
\nhence, also less government subsidy.<\/p>\n
Another benefit would be decreased air pollution which,
\naccording to the World Bank, has caused a loss of about US$200
\nmillion per year, just for Jakarta alone. For the whole country
\nthe loss would presumably exceed $1 billion, since cities like
\nBogor, Bandung, Semarang, Yogyakarta, Surabaya, Medan, Palembang
\nand Ujungpandang have large populations and many cars. The
\nprevention of health-related losses would be of the order of the
\nIMF installment. Much of this benefit would go to the poorer
\npeople who are daily exposed to high levels of air pollution,
\ne.g. the street vendors or kaki-lima. These are also the
\npopulation group who can ill afford to pay additional health
\nexpenses.<\/p>\n
Short distance trips can be conveniently done by walking and
\nbicycling. To encourage this the government should formulate a
\nnew transportation policy in which these two modes of transport
\nare included as integral components. As a consequence, safe and
\npleasant pedestrian walks and bicycle lanes would have to be
\nconstructed in cities and between towns and villages. The
\nconstruction of pedestrian walks and bicycle lanes would be
\ncheaper than roads for motorized vehicles. They could be planned
\nas part of the padat karya (labor intensive) projects. Mass use
\nof bicycles would create many small- and medium-scale enterprises
\n(SME) and many jobs for the production of bicycles and their
\nspare parts, assembling and marketing, particularly since these
\nSMEs would not depend on many dollars. Therefore, the padat karya
\nprojects for the pedestrian walks and bicycle lanes and the SMEs
\nwould help to overcome the economic crisis and its impacts. The
\ngrowth of SMEs would also lessen the socioeconomic gap between
\nthe poor and the rich. Since about 30 million families live
\nwithin a distance of 4 km from shops\/markets, schools,
\nrecreational areas and other public buildings, the potential
\ndomestic market for bicycles is very large. But high quality
\nbicycles also have a good potential for export. Taiwan, for
\nexample, exports 3 million bicycles to Europe.<\/p>\n
It should be stressed here that this is not a proposal to
\nsubstitute cars with walking and bicycling. These two modes are
\nfor short distance travel with light burdens, while motorized
\nvehicles are for long distances and heavy loads. In other words
\nthe motorized and non-motorized modes of travel are complementary
\nto each other. To stimulate walking and bicycling high level
\ngovernment officials and the rich should give the example that
\nthere is nothing wrong with walking and bicycling for short
\ndistances. The IMF and the World Bank could play a positive role
\nby suggesting to the government that this would be an
\neconomically appropriate and environmentally sound way of
\nreducing fuel subsidies which would contribute to overcoming the
\neconomic crisis.<\/p>\n
Prof. Dr. Otto Soemarwoto is an expert on environmental
\nmatters, based in Bandung.<\/p>",
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