Formalisation of charcoal value chains and livelihood outcomes in Central- and West Africa

This paper examines the link between formalisation of charcoal institutions and livelihood outcomes in Central- and West Africa. The woodfuel trade generally commenced informally, little controlled by legal or bureaucratic means. Developing formal institutions is often considered as a way of managing charcoal production more sustainably. However, formalisation can have adverse effects for charcoal producers and traders when this hinders their capacity to access the resource or markets. In order to assess the relations between the formalisation of charcoal institutions and socio-economic outcomes for those involved, this study combines a value chain and livelihoods perspective. A review of case studies and empirical data show that (1) West African countries, with a longer history of dealing with woodfuel issues, have more formal mechanisms in place to deal with charcoal management and these are more embedded into cross-sectorial energy and environmental policies; (2) Despite regulatory mechanisms dealing with woodfuel in all countries, institutions are mainly embedded in informal institutions and based upon customary rules, which allows large numbers of actors to be involved, but also leads to substantial unsustainable and unofficial production, corrupt practises and loss of tax revenues; (3) Formal mechanisms can have negative consequences, such as: conflicts of interests over tax revenues, difficulties in avoiding ‘free riders’ from sustainable management initiatives, and disproportional benefits reaped by more powerful urban-based actors. Comparing the West African countries with Central African countries where attention is relatively new, indicates that conditions for successful charcoal institutions are: devolving power and responsibilities for woodfuel management to a local level, monitoring woodfuel trade, (tax) incentives for sustainably produced charcoal and reinvesting taxes in social and environmental aims.

► Informal rules dominate charcoal chains in Central- and West Africa.
► ‘Informal’ means access to many, overexploitation and little tax revenues.
► West Africa has more cross-sectorial formal mechanisms.
► Formal charcoal institutions risk reinforcing unequal distribution of benefits.
► Successes build upon decentralised management, tax incentives and reinvestments.