The economic effects of phasing out the usage of peat in Rwanda

Abstract

Peat has been a crucial component of Rwanda’s energy sector, primarily used for electricity generation and industrial processes. However, due to its environmental impact and Rwanda’s commitment to sustainable energy transition, its need to be phased out. This shift aligns with global efforts to reduce carbon emissions and promote renewable energy. The transition, however, presents economic, environmental, and social challenges that require in-depth analysis. This study the economic effects of phasing out the use of peat in Rwanda. It evaluates the economic consequences, environmental benefits, energy security considerations. This study applies LEAP energy and emission modeling to analyze different scenarios of phasing out and its economic effects. The results shows that more than 715.6 GWh of peat energy lost as results of transition, peat energy result to 13.4 MT of greenhouse gas emission, so phasing out would reduce the emission that contribute to environmental sustainability, it poses short-term economic challenges. Industries dependent on peat, energy such as cement manufacturing and tea processing, may experience increased production costs. Additionally, the transition had an effect on employment in peat extraction and related industries, necessitating government intervention in workforce reskilling and job creation in renewable energy sectors. Rwanda must implement strategic policies, including financial incentives for industries shifting to renewable energy, investment in research and development of alternative energy sources, and regional cooperation in energy trade.