Damages and Compensation in Case of Breach of Contract

The CAS in the “Matuzalem case” determined the positive interest, the player has to compensate more than the damages which the former club actually suffered. The CAS deliberately chooses for the calculation of the indemnity a method which is unforeseeable for the football player. The European Court of Justice held in this decision that an indemnity for damages can only be calculated based on fixed criteria, i.e. criteria that are known. However, the approach of the CAS is contrary to the principle that the damage suffered is to be concretely calculated and that an indemnity may not contain any deterrent or punishing elements. According to the principles of Swiss tort law the reimbursement of damages is limited to the extent it can be expected within the usual course of affairs and the general experience of life that such damages are suitable to cause damages of the kind that actually occurred. The calculation of the compensation is to be based on the difference between the terminated and the new player’s contract as well as under consideration of a compensation for acquisition costs of the former club which have not been fully amortized due to the early termination of the contract. This seems to be the one and only adequate solution to achieve the balance between the contractual stability and the freedom of movement for players, which is actually the purpose of the FIFA regulations.

Introduction
'The function of the law is to enable rights to be vindicated and to provide remedies when duties have been breached. The purpose of this article is to explore the extent to which the English courts pursue a vindicatory function when awarding a remedy for breach of contract and, in particular, to examine the function of contractual damages. Vindication describes the International Journal of Social Science Research ISSN 2327-5510 2015 making good of the claimant's legal right by the grant of an adequate remedy. Unless an infringed right is met with an adequate remedy, the right is a hollow one, stripped of all practical force and devoid of all content. As society becomes more rights-focused and English law more rights based, the vindicatory function is likely to become increasingly evident. In this piece two related claims concerning vindication are put forward.
The first is that the English courts already recognize that their primary objective in awarding a remedy for breach of contract is the vindication of the claimant's rights under that contract. While the limited availability of specific relief and the preference for compensation as a substitute for performance suggest that contractual rights are vindicated only in a weak sense, closer examination of conventional compensatory principles reveals that compensation is very much a means to an end rather than an end in itself. That end is the making good of the claimant's right to performance of the contract. The second claim is that a discrete remedy, vindicatory damages, may be identified in contract cases. Up until the 'new start' heralded by the decision in Attorney-General v. Blake, it was commonly accepted that damages for breach of contract were exclusively loss-based.
The fundamental basis of contractual damages was to compensate 'for pecuniary loss naturally flowing from the breach'. But in Blake, the House of Lords acknowledged that English 'law does not adhere slavishly to the concept of compensation for financially measurable loss': damages may be measured by the gain made by the defendant. The precise nature of such damages has proved controversial. Some judges and commentators maintain that gain-based damages are restitutionary, others, that the damages remain compensatory. The better view, it is suggested, is that these damages are vindicatory in nature. Vindicatory damages, which to date have only been explicitly recognized in the context of constitutional rights are neither loss-based nor gain-based: they are a rights-based remedy. As well as providing a just remedy in suitable cases, vindicatory damages offer a further benefit. For at present, the concept of loss in English contract law is in danger of being over-stretched. Extending the availability of vindicatory damages to contractual actions would provide a more accurate explanation of the remedy awarded in certain cases and would help to preserve the coherence of the conventional remedies of compensation and restitution.
The following article will give an interpretation of art. 17 of the FIFA Regulations about the status and transfer of players (hereinafter "FIFA Regulations"), from a Swiss law point of view. The focus of the deliberations will be especially on the financial consequences of the termination of a contract as described under this provision. Art. 17 FIFA Regulations and its interpretation must in any event comply with mandatory Swiss law according to Article 63 para 2 of the Swiss Civil Code, because of the fact that FIFA is an association incorporated under Swiss law. Furthermore, non-mandatory Swiss law can also be relevant in relation to art. 17 FIFA Regulations. 1 Hence, Swiss law is relevant for art. 17 FIFA Regulations not only since the "Webster Decision". 1 In this ruling the CAS held that the reference in art. 17 para. 1 of the FIFA Regulation, to "the law of the country concerned" (to calculate the International Journal of Social Science Research ISSN 2327-5510 2015 compensation in case of a breach of contract), should not be misleading because according to art. 60 para. 2 of the FIFA statutes the interpretation and validity of decisions and regulations of the FIFA may only be assessed under one statute: Swiss law. 2 However this approach and also the one in the "Matuzalem case" cannot be generally accepted. Apart from the applicable mandatory Swiss law, the term "the law of the country concerned" in art. 17 para. 1 of the FIFA Regulation refers to the mandatory law of the country with the closest links to the contractual relationship concerned.
Bearing these considerations in mind, this article will point out the mandatory provisions under Swiss law that a court must respect in any case where fixing an amount of compensation based on art. 17 FIFA Regulations. Further, the authors will shed light on the principles of Swiss law applicable to the calculation of compensation as foreseen in art. 17 FIFA Regulations if a court designates Swiss law as the applicable law.

Firing on the Job
According to art. 334 para. 1 CO fixed-term employment contracts end without notice at the expiry of the contracting period. If an employment relationship after this period is upheld by tacitly extending the contract, it will be deemed to be open-ended.
Fixed-term employment relationships do not exclude employers and employees agreeing on notice periods which allow an early termination of the employment relationship. If the parties have not agreed on such a notice period, only an early termination as defined in art. 337 CO is possible to end the relationship before the expiry of the contractual period. In this case regarding the financial consequences a distinction is to be made between whether the dismissal was for good cause or not (cf. chapter 3). Further it is possible that fixed-term employment relationships may be terminated based on an agreement and mutual consent of the parties to terminate the contract.
An open-ended employment relationship may be terminated by either party by respecting the contractually agreed or statutory notice periods. In Swiss labor law it is an important mandatory principle that different notice periods for employees and employers must not apply (so called parity of termination periods, cf. art. 335a CO).
Amongst Swiss scholars it is controversial (but has been affirmed several times by cantonal jurisprudence), whether from art. 335a para 1 CO a substantial parity can be derived in the sense that also beyond the period of notice the other conditions for termination and its consequences may not be aggravated unilaterally for one party (e.g., by way of economic disadvantage) 3 . Further, special regulations are to be respected regarding the termination of an employment relationship during the probation period or in case of mass redundancies.
The Swiss labor law regulates, inter alia, in art. 336 ss. CO the issue of dismissal protection. A termination is regarded as wrongful if it infringes the principle of good faith (art. 2, para 2 2 "Webster decision", recital 16 ss.  ISSN 2327-5510 2015 CC). It is important to distinguish between a wrongful termination and a termination at an inopportune juncture. The latter involves a notice of termination during a period blocked by law (cf. art. 336c para. 1 CO and art. 336d para. 1 CO). Any notice of termination during such period (for example during pregnancy or while an employee is absent due to performance of military service, sickness or accident) is void (cf. art. 336c para. 2 CO).

Termination Consequences
As a result of this provision, the employee should be treated as if no notice of termination with immediate effect had been pronounced. Hence, the so-called positive interest 4 is owed to the employee. This positive interest in case of a termination with immediate effect without just cause consists of the remaining wage(s) and includes other factors like a possible 13th month wage, a severance payment, expenses etc. 5 If the employee wants to claim additional damages, he is entitled to do so according to the general conditions of Swiss tort law. 6 Further it is to be noted that the employee cannot require reemployment. Instead of this, the judge can oblige the employer to pay, in addition to the damages as set out above, compensation at the most of a maximum of six monthly salaries to the employee. The fixing of such compensation lies within the discretion of the judge, who has therefore to consider all circumstances which led to the resolution of the employment relationship. Some scholars qualify this kind of compensation as a penalty, 7 the jurisprudence however calls it a civil law punishment. 8 By failure of the employee to take up his post or if he leaves it without notice and good cause, the employer is entitled to a compensation which corresponds to one quarter of a monthly wage of the employee (art. 337d para. 1 CO). However, if the employee produces evidence that no damages or only lower damages than this quarter of a monthly salary have occurred, the compensation has to be adapted accordingly. Nevertheless the employer has also the possibility to claim greater damages than the quarter of a monthly wage of the employee (cf. art. 337d para. 1 CO in fine). Art. 337d CO and the compensation set forth in this provision are intended to lead to a simplification of the calculation of the damages: The employer has no burden of proof regarding damages which lie within the quarter of a monthly wage of the employee. Hence, the claim for a quarter of a monthly wage may have similarities with a contractual penalty, but as a matter of fact, it is only a lump-sum indemnity. Art. 337d CO causes de facto a reversal of the burden of proof and, hence, is not to be qualified as a contractual penalty. Nevertheless, the preference of the employer by the reversal of the burden of proof reaches only so far, as it is not a bigger claim at stake than a quarter of a monthly wage of the employee. Otherwise the employer must prove the extent of the  ISSN 2327-5510 2015 damages as well as the causality between the damages claimed and the termination with immediate effect of the employee according to the general principles of tort law. Considering this, art. 44 para.

International Journal of Social Science Research
Art. 337d CO is an absolute mandatory provision. Therefore, it is not allowed to penalize the early termination of an employee with a contractual penalty. This applies not least because the legislator wanted, due to the fact that an employment relationship is strongly personality-related, to make it possible for the employee to change a job without ruinous consequences.

Assessment of the CAS jurisprudence
Following the Swiss labor law, damages of the employer due to a termination with immediate effect by an employee usually consist of the additional costs for the engagement of a temporary employee, the costs of overtime work by the other employees or the costs for outsourcing the respective work to a third party. In case of a fixed-term employment contract additionally the problem may arise that an adequate replacement must be found ahead of time. These cost items had been correctly reflected in the "de Sanctis-case" and finally made a considerable share of the compensation. 9 Theoretically also loss of profit could be part of the positive interest. However, this kind of damage is very difficult to prove and therefore rarely admitted in practice. 10 An analogue approach seems to be justified also in the area of football: In general it is to be assumed that the salary of a player (the employee) agreed for the entire term of the contract reflects the performance which the player/employee is able to serve. As a consequence the lapse of the duty to pay a salary will not cause any damages to the club/employer. This should apply at least if the club is not replacing the player and further the club is not able to prove any loss of damage caused by the early termination.

Prevailing Difference Theory in Switzerland
Regarding this preliminary finding some additional in-depth thoughts are to be added: According to the prevailing difference theory in Switzerland, the damage consists of the difference between the current financial status and the hypothetical state of the assets without the harmful event. As set out above, the CAS tried in the "Matuzalem case" to calculate the damages by determining the positive interest, i.e. that the injured party is to be put in the same position as if the contract would have been completely fulfilled. In our opinion, such positive interest has to be determined as follows: If the contract between the player and the club is fulfilled correctly, the club may benefit during the entire duration of the contract from the services of the player in exchange for the payment of the agreed salary. If the player's potential increases exceptionally, the salary under the actual contract might be too low compared with his performance, i.e. that if he could negotiate a new contract, most likely he would earn more than under the old contract. This means that the player's performance is de 9 "de Sanctis decsion", recital 73.  ISSN 2327-5510 2015 facto underpaid and therefore the club gains a financial benefit, as he would have to pay more than he does now for another, equivalent, player. In case of an early termination of the contract, the club loses this advantage. Hence, the decisive delta for the positive interest in case of an early termination consists of the difference between the salary of the player under the old contract and the income under the new contract in consideration of the actual term left until the expiry of the contract with the former club. The actual value of the player is reflected in the salary which the new club is willing to pay to the player for his services under the new contract. The difference of this sum to the salary under the old contract reflects the increase of value of the player since the last contract negotiations until the signing of the new contract. This difference is the positive interest which the former club is not able to realize due to the breach of the contract by the player.

International Journal of Social Science Research
Of course the objection can be made that the additional value of a player under a new contract does not only consist of the delta explained above. This in particular is the case if a club is willing to pay a transfer fee for the player. In such a situation, the club does not only declare the additional value that he sees in a player through a higher salary but also by paying in addition a transfer fee to the former club. The value added to the player under the new contract according to this approach consists of the difference between the salary under the new and under the old contract as well as of, according the ruling of the CAS in the "Matuzalem case", the transfer fee paid by the new club. Under this approach one must keep in mind the following: The additional value of a player reflected in a possible transfer fee may not per se be attributed to the former club. Because whether a transfer will be realized or not, and therewith the question of whether the former club may realize a profit by way of the transfer fee, does not lie exclusively in the sphere of influence of the club. Moreover such transfer relies mostly on the willingness of the player to agree on such a transfer. As a consequence, the player may avert such a transfer fee in favour of the club not only by an early termination of the contract, but also with good right, by refusing any attempt of a transfer. Thus, a lost transfer fee may not be qualified as lost profit on behalf of the club and therefore cannot be part of the club's positive interest. Rather, this situation is to be seen as a possibility to perhaps one day realize a transfer fee and thus to be qualified as a loss of opportunity (perte d'une chance) if such opportunity, on any grounds whatsoever, finally does not materialize. The legal construction of the loss of opportunity in Switzerland is at present not recognized as a factor which could be claimed as damages. A chance itself, in case a lucrative transfer fee, cannot be qualified as an asset, neither an actual one nor a future one. Either such a chance can be realized and becomes a fully fledged asset or it will be "realized in nothing". Thus, a chance itself is never part of the wealth which can be used for the calculation of damages. 11 This conclusion would only be different if the club had already negotiated a transfer in a very concrete way, but the latter would be hindered due to a breach of contract by the player. In such a case, it is to be assumed that the chance of a profit due to a transfer has already become so concrete that a recoverable damage exists. 12 In all other International Journal of Social Science Research ISSN 2327-5510 2015 situations the general possibility of a transfer fee may not be used for the calculation of damages in case of an early termination.
If one is consequently pursuing the concept of the positive interest, which means as already mentioned that the injured party is to be put in the same position as if the contract would have been completely fulfilled, the following picture is shown: the player and the club are to be put in the position as if the term of the contract had expired without any incident. Under this assumption, the player would now be free to conclude any new contract he wants to, as he is no longer bound by the old contract. Such negotiations of course could also take place with a new club and the latter would not have to pay any transfer fee at all to the old club under this situation. Therefore, if the correct fulfilment of the contract is assumed, the old club automatically loses its chance to realize any transfer fee. Thus, if the interest in the correct fulfilment of the contract is assumed, a transfer fee can never be part of the claimed damages. These two deliberations dogmatically hinder the idea that a compensation for the "lost" transfer fee can be awarded to a club due to the breach of contract by a player.
However, also the approach in the "Webster case" cannot be fully agreed from a Swiss law perspective. Dogmatically, damages cannot consist in an amount saved due to the "harmful" incident. Nevertheless it is to be borne in mind that, due to the specificity of sport, the value of the services of a player is difficult to estimate by monetary indicators, as the services of a player for a club cannot just be replaced by another equivalent player. The value of a player and therewith the damage through his loss, may most likely be measured against the amount the club was willing to effectively pay for the player's services. From this point of view, the findings in the "Webster case" are to be agreed with, however with the reservation that this way of damage calculation does not recognize any additional value of the player caused by an increase of the player's performance. In the "Matuzalem case" the CAS added for the calculation of the damages i) the services which the player would have rendered within the next two years (reflected by way of his future income) and ii) the transfer fee which would have to be paid according to his new contract. By this addition, the CAS violated the fundamental principle of tort law which says that no bigger damages are to be granted in compensation than those that were actually incurred. Further the CAS assessed the player's performance not by considering the contract with the former club, but by taking into account contracts which never had been performed, contracts with a duration until the year 2011 and also based on a salary which the player would only have received, if ever, after the expiry of the contract with his former club. Further, the CAS considered the planned contract with SS Lazio Roma (this contract has never been performed), and therefore again a possible future increase of the player's value, to calculate the compensation for his former club. By doing this, the CAS diverges from its principle that the damages to be repaired must flow from the breached contract and not from the value that a third party attributes to the services of the player, e.g. by way of a transfer fee.
Such an approach would, as RADOSTOVA/WIESCHEMANN correctly noted, lead under certain circumstances to the situation that clubs would not only be compensated but enriched, as depending on the transfer situation, they would profit from monetary advantages which they themselves would never have achieved. 13 As a conclusion, according to the "Matuzalem decision" the player is obliged to indemnify his former club for damages which are largely based on fictitious assumptions. Further, from a Swiss law point of view the damages are compensated twice by this calculation. Apart from that, according to the strict wording of art. 17 FIFA Regulations, only compensation is due, and not damages.

Cancelling the Contract by Employee with Immediate Effect
Under the criteria "specificity of sport" the CAS in the "Matuzalem case" added the amount of EUR 600'000 to the double indemnity. This meets approximately six monthly wages under the former contract. To justify a possible lump-sum in connection with the breach of an employment contract the CAS reverts to Art. 337c para. 3 CO and art 337d para. 1 CO and finds that six monthly wages are possible as compensation. This interpretation however clearly contradicts the wording of the cited provisions. According to art. 337c para 3 CO the employer may be obliged by the court to pay the employee a compensation of up to six monthly wages, if he dismisses the employee without good cause. This clear wording cannot just simply be applied vice versa in favour of a football club (the employer) with the argument that a player has a relatively greater power of negotiation as a great number of clubs compete for the player. This because, on the other hand, any club has the possibility to hire football players from all over the globe and the free positions in each team are limited. Therefore the protective regulations of the labour law must also mandatorily apply to football players. In case the employee is cancelling the contract with immediate effect, art. 337d CO protects the employer from an unjustified termination. This provision entitles the employer (as part of the reparation of further damages) to a lump-sum compensation of a quarter of one monthly salary of the employee only. Thus, the maximum sum to which the player in the "Matuzalem case" could have been condemned, according to the cited Swiss law and without the proof of a bigger effective damage, is a quarter of his monthly salary, i.e. about EUR 25'000. Further it is to be noted that this compensation cannot be claimed additionally to the damages due, but only in cases where the employer has suffered a bigger damage, which can be proved. By adding a lump-sum, the CAS has extended the compensation with a punitive element, which is not known under Swiss law. As mentioned above, the lump-sum set forth in art. 337d CO is not a contractual penalty. The CAS mistakes the legal nature of the compensation according to art. 337d CO if it declares it as a "special indemnity". 14 Further, also a previous decision of the Swiss Federal Supreme Court points out that one cannot simply depart from the clear wording of art. 337c CO. In this case, a football player terminated his contract with immediate effect and with just cause after a dispute with his club. Besides the damages arising out of the loss of salary, the player also claimed an additional compensation according art. 337c para. 3 CO. With regard to this compensation, the Swiss Federal Supreme Court held, and therewith confirmed its previous jurisprudence, that this kind of compensation is only awarded to the employee, if the employer has 13 K. RADOSTOVA/C. WIESCHEMANN, Entwicklung von Transferregeln der FIFA und der Rechtsprechung zum Schadenersatz wegen Vertragsbruches im Fußball in: Berufssportrecht, Vienna 2010, 26. 14 "Matuzalem decision", recital 156. ISSN 2327-5510 2015 terminated the contract without good cause. An analogue application of this provision if the employee has terminated the agreement with immediate effect and for good cause is, on the other hand, not possible. 15 Finally the CAS did not take notice of the absolute mandatory nature of art. 337d CO. As already set out under chapter 3.2, one cannot deviate from this provision with the result that an early termination of the contract by the employee will be punished with a contractual penalty. But in fact this is what happened in the "Matuzalem case" when the player was condemned under the title "specificity of sport" to pay additional compensation of EUR 600'000. 16

An Unequal Treatment among Employer and Employee
One of the most important principles of Swiss labor law is the principle of parity of termination periods (art. 335a CO, cf. also chapter 2.2.1.). From a substantive law point of view, the principle of parity signifies that the termination of an employment contract may not be aggravated at cost of one party by imposing economical disadvantages that would not apply to the other party. This is especially true in constellations where only one party has to pay a contractual penalty in case of the termination of a contract.
The compensation granted in the "Matuzalem case" is very similar to such a contractual penalty. The CAS in fact imposed on the player a duty to pay his former club a hypothetical wage increase, a transfer fee agreed with a third party (which has never actually been paid) and a penalty based on the specificity of sport. If the compensation is calculated in this way, a contractual penalty in the amount of a future transfer fee is imposed on the player in case of an early termination of his contract. Thus, by this practice, the contractual balance will be essentially altered at the cost of the employee. This is because a football club in the reverse situation, i.e. if the player would be dismissed before the expiry of his contract e.g. due to insufficiency, would never be forced to pay an amount which exceeds the salary to be paid to the player until the proper expiry of the contract. The way the CAS calculates the compensation leads to an unequal treatment between employer and employee and the CAS thus infringes a fundamental principle of Swiss labor law.

Conclusion
As a result of the manner in which the CAS in the "Matuzalem case" determined the positive interest, the player has to compensate more than the damages which the former club actually suffered. The CAS deliberately chooses for the calculation of the indemnity a method which is unforeseeable for the football player. This approach can no longer be upheld, at the latest since the decision of the European Court of Justice in the "Bernard" matter on March 16, 2010. 17 18 In casu the sports and training compensation of an "espoir"-player which changed to a new club after the expiry of his traineeship were at stake. ISSN 2327-5510 2015 can only be calculated based on fixed criteria, i.e. criteria that are known. Further, the court held that it is inadmissible to fix the amount of the indemnity over and above the sum of damages actually suffered. 19 However, the approach of the CAS is contrary to the principle that the damage suffered is to be concretely calculated and that an indemnity may not contain any deterrent or punishing elements. According to the principles of Swiss tort law the reimbursement of damages is limited to the extent it can be expected within the usual course of affairs and the general experience of life that such damages are suitable to cause damages of the kind that actually occurred. Thus the adequacy of the causality between the harming event and the damages determines which infringement of legally protected rights is to be compensated and which not. By this, the duty to compensate damages is limited. 20 In other words, it must be at least abstractly foreseeable for the causer, what damages he will have to compensate. The CAS however wants the compensation, which is deemed as positive interest, to be as unforeseeable as possible, to increase the deterrent effect. Such an unforeseeable compensation has nothing to do with damages that are adequately causal. Therefore, the respective deliberations of the CAS and the consideration of punitive effects associated therewith infringe the principles of Swiss tort law outlined above. Compensation according to art. 17 FIFA regulations is therefore, not only under Community law but also under Swiss law, to be held free of any punishing elements and is to be calculated only based on the contractual value of the player. The approach that this value is to be calculated based on the remaining salary demands under the breached contract 21 goes in the right direction. Nevertheless, from a dogmatic point of view only the effective increase of value of a player, which consists of the difference between the income under the former contract and the salary fixed in the new contract, must be considered as damages to the former club of the player. Thus, it would be desirable, at least from the players' view, if the CAS would go back to the direction taken in the deliberations in the "Webster case". However, transfer fees in connection with the new contract are by no means to be considered for the calculation of damages. The calculation of the compensation is to be based on the difference between the terminated and the new player's contract as well as under consideration of a compensation for acquisition costs of the former club which have not been fully amortized due to the early termination of the contract. This seems to be the one and only adequate solution to achieve the balance between the contractual stability and the freedom of movement for players, which is actually the purpose of the FIFA regulations.


NON-COGNITIVE ABILITIES AND LABOR MARKET OUTCOMES: THE ROLE OF WORK ETHIC AND PERSONALITY TRAITS ON SUPERVISORY STATUS AND PROMOTION

A growing literature suggests that noncognitive abilities are important determinants of earnings. But empirical research on nonwage labor market outcomes is still limited due to data availability. In this paper, we collect employer-employee linked data from six former socialist countries and estimate three noncognitive abilities: adherence to work ethic, the preference for challenge versus affiliation, and locus of control, and their relationship with workers’ supervisory status and promotions. We find that these noncognitive abilities are strong predictors of the likelihood of being a supervisor and being promoted as well as the number of supervisees and promotions. We also study the role of noncognitive abilities in the gender gap in these labor market outcomes. Based on a Blinder-Oaxaca decomposition, gender differences in these noncognitive abilities can explain a modest proportion of the gender gap in supervisory status and promotions.

Introduction
Common sense suggests that both cognitive and noncognitive abilities play an important role in shaping labor market outcomes. It is intuitive that a person's attitude and personality should affect his/her wages or promotions, and many surveys show that employers value attitude towards work or communication skills more than years of schooling, industry-based credentials, or technical skills (Bowles, Gintis, & Osborne, 2001). There is indeed ample evidence from psychology showing that, while cognitive ability is a powerful predictor of economic and social outcomes, noncognitive ability is equally important. However, most of the literature in labor economics focus mainly on traditional human capital predictors such as education, experience or job training programs. It is until very recently that economists begin to apply many measurements of cognitive and noncognitive abilities developed by psychologists (Borghans, Duckworth, Heckman, & Weel, 2008). There has been many studies on general cognitive ability, or I.Q., measured by standardized achievement or general aptitudes tests such as the Armed Forces Qualification Test (AFQT) in the U.S. [For a summary of evidence see Cawley, Heckman, and Vytlacil (2001).] On the other hand, the literature on noncognitive abilities such as work ethic and personality is growing but it is still relatively small.
The relationship between noncognitive abilities and labor market outcomes has been addressed only by a few studies from European countries and mainly by studies from the U.S. It is not clear whether these results can be applied directly to less developed economies since some of the returns to noncognitive abilities might be culturally or institutionally specific. In addition, almost all of the existing studies focus on wages, and there is very little research examining other aspects of labor market outcomes due to lack of data. In this paper, we collect a large linked employer-employee data with detail information from six former socialist countries (Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Russia, and Serbia) and study the relationship between noncognitive abilities and supervisory status and promotions in workplaces. Although we do not have a representative sample, the detailed information in our data allow us to examine labor market outcomes that are not well studied by previous research. Becoming a supervisor or being promoted represent an important change in a worker's career. It is not only associated with an individual's movement up the firm hierarchy but assuming significant types of responsibilities and decision-making authority (Kosteas, 2011;Rothstein, 2001). Studying vertical mobility within firms help economists to build a more complete picture of the role of noncognitive abilities in labor market outcomes.
We construct three different measures of noncognitive abilities from our detailed survey data: preference for challenge versus affiliation (C-A), locus of control (LOC), and adherence to the Protestant work ethic (PWE). We estimate linear probability models to study these noncognitive abilities and their effects on the likelihood of holding a supervisory position or receiving promotions. We also estimate the effects of noncognitive abilities on the number of supervisees or promotions because the intensive margin is as important as the extensive margin and approximately represents the level of a worker's position within a firm. The linked employer-employee data permit us to include firm fixed effects in the models to better account for potential firm heterogeneity. To preview our results, we find that preference for challenge, internal locus of control, and stronger adherence to work ethic are all positively associated with supervisory status and promotions. Specifically, one standard deviation increase in C-A, LOC, and PWE leads to an increase in the likelihood of being a supervisor of 2.5, 2.1, and 3.4 percentage points, respectively. We also find that one standard deviation increase in C-A and PWE leads to an increase in the likelihood of receiving promotions by 3.0 and 1.6 percentage points, but LOC does not appear to be a strong predictor of promotion. In terms of percentage changes, these estimates indicate about a 5-10% increase in the probability of being a supervisor or being promoted. For the intensive margin, a worker scored one standard deviation higher in C-A, LOC, and PWE supervises 0.4 (9%), 0.7 (16%), and 0.8 (17%) more employees. Also, a worker scored one standard deviation higher in C-A and PWE receives 0.07 (8%) and 0.06 (6%) more promotions, but LOC is not a significant predictor for the number of promotions. The estimate magnitudes for these noncognitive abilities are about one third to two third of the estimates for education and self-report performance that are closely related to cognitive abilities.
Another focus of this paper is to link gender differences in noncognitive abilities to the observed gender gap in supervisory status and promotions. Numerous psychological studies have shown that noncognitive abilities like work ethic and personality traits tend to vary by gender (Costa Jr, Terracciano, & McCrae, 2001;Meriac, Poling, & Woehr, 2009;Schmitt, Realo, Voracek, & Allik, 2008). However, very little empirical research in economics explores the implication of gender differences in noncognitive abilities in labor market outcomes. In this paper, we document that there exist moderate mean-differences in these noncognitive abilities across gender of 5-18% of one standard deviation. We also perform a Blinder-Oaxaca decomposition to decompose the gender gap in supervisory status or promotions into the gender differences in means and in coefficients. The results indicate that mean-differences in noncognitive abilities comprise most of the explained gender differences and they can explain a modest proportion of the total gender gap in these labor market outcomes. The gender mean-differences in these noncognitive abilities account for around 8% of the total gender gap in supervisory status and 13-18% of the total gender gap in promotions.

Data Description
Under the auspices of a project designed to investigate factors influencing worker performance in formerly socialist economies, an employee survey was conducted in Russia, Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan and Serbia. Local project coordinators contacted over 700 workplaces to request permission to conduct the survey. In organizations where permission was granted, the questionnaire was administered in common areas or at specific job sites in the workplace. If workers agreed to participate, they had the option of returning a complete or incomplete questionnaire. More than 10,880 employees in over 665 workplaces participated. While cost constraints precluded generating a representative sample in any of the countries, our convenience samples represent a wide variety of workers and workplaces, and involve multiple geographic locations in each country. For the purposes of this paper, we restrict the country samples to include only those participants who answered all questions relevant to this analysis of noncognitive abilities and worker characteristics, giving us a total of 7,502 observations for promotions and 7,460 observations for supervisory status.
The descriptive statistics for worker characteristics and noncognitive abilities are in Table 1. In our sample, 57% of the workers are females and about half of female workers are married. The average schooling of workers is 14.6 years. The relatively high level of education among participants is likely caused by the nature of the survey project -the level of reading required to complete the questionnaire and the individual's willingness to participate in a "research project." There are four composite measures for self-report performance and three noncognitive abilities, preference for challenge versus affiliation (C-A), locus of control (LOC), and adherence to the Protestant work ethic (PWE). All of these composite measures are summed from a series of questions and rescaled to be between 0 and 1. Workers who scored higher in C-A, LOC, and PWE prefer challenge over affiliation in a working environment, exhibit internal locus of control, and more adhere to work ethic. One third of workers classify themselves as holding a supervisory position and nearly half of workers have received promotions from their current workplaces, regardless of gender. On average, workers supervise 4.47 people and receive 0.48 promotions. Table 1 also presents the mean-differences for worker characteristics and noncognitive abilities across gender. Male workers are 8.6 percentage points more likely to hold a supervisory position and supervise 2.1 (2.07/4.47 = 47%) more employees than female workers. The gender gap in holding a supervisory position is actually very close to that in in the U.S. which is about 6-9 percentage points difference (Rothstein, 2001). On average, although the likelihood of receiving at least one promotion for males is not significantly different from females, male workers receive 0.06 (0.06/0.90 = 7%) more promotions than female workers. Table 1 suggests that female workers, on average, appear to have less favorable noncognitive abilities than male workers. Females have preference for affiliation over challenge, are more likely to exhibit an external LOC, and less adhere to work ethic. For the composite performance measure, females also report worse self-assessed performance than males. The mean-differences in these composite measures are all statistically significant, measured in standard deviations, the gender differences are of 5-18% of one standard deviation.

Empirical Model
To study the determinants of labor market outcomes, we estimate linear models by OLS as follows: (1) Yi = noncognitive abilities + Xi γ + firm characteristics/ fixed effects + εi, where Yi is one of the four outcome variables: a dummy variable of being a supervisor, the number of people supervised, a dummy of ever receiving promotions in the current firm, and the number of promotion received in the current firm. The variables of main interests are the three composite measures for non-cognitive abilities: preference for challenge versus affiliation (C-A), locus of control (LOC), and adherence to the Protestant work ethic (PWE). Xi is a vector of worker characteristics from Table 1, including gender, marital status, a dummy for being a married woman, years of schooling, age and its square, workplace tenure and its square, a dummy indicating unemployment experience in the past five years, a dummy for holding multiple jobs, and the composite measure of self-reported performance. To study whether or not the relationships between the above noncognitive abilities and supervisory status and promotions differ across gender, we also estimate Equation (1) separately for males and females. In the basic specification, we control for a number of firm characteristics: a dummy variable equals one if state-owned organization, sector dummy variables (construction/transportation, education/health, finance, manufacturing, retail and other services, and public sector as the omitted sector), and dummy variables for each country (Russia as the omitted country). However, firm heterogeneity may bias the estimates in our cross-sectional regressions. For instance, if firms that attract workers with higher noncognitive abilities have more opportunities for promotions, there will be an upward bias in the estimates for these noncognitive abilities. In the extended specification, because we have employeremployee linked data, we nonparametrically control for workplace heterogeneity by including firm fixed effects (dummies for each firm) in the models. Throughout of this paper, the estimated standard errors are clustered at firm level and therefore are robust to any withinfirm correlation and heteroskedasticity. Table 2 presents the estimates from regressions of holding a supervisory position and the number of supervisees. To illustrate the changes in results, we show both the estimates from models with and without the inclusion of non-cognitive abilities, C-A, LOC, and PWE. We control for firm characteristics in Columns (1) -(2) and (5) -(6) and control for firm fixed effects in Columns (3) -(4) and (7) -(8). In the left panel, Columns (1) through (4), the dependent variable is a dummy variable for being a supervisor. In the left panel, to make interpretation easier, we scale the estimates and estimated standard errors by 100 and thus they reflect differences in percentage points. In the right panel, Columns (5) through (8), the dependent variable is the number of people supervised that can be viewed as a proxy for the level of a worker's position and supervisory responsibilities (especially when controlling for firm fixed effects and thus firm sizes).

Regression Result
First we note that, in both panels, most of the estimates from the specification with firm characteristics are quantitatively similar to the estimates from the specification with firm fixed effects. It seems that firm heterogeneity does not play an important role in the current context. Second, in both panels, most of the estimates for worker characteristics are quantitatively similar when these three measures of noncognitive abilities are included, suggesting that C-A, LOC, and PWE are not strongly correlated with other explanatory variables in determining supervisory status. If our composite measures of noncognitive abilities were strongly correlated with other explanatory variables in the models, especially with education or self-report performance that are closely related with cognitive abilities, we would be concerned that they may just capture the effects of other aspects of cognitive abilities. However, the estimates for education and self-report performance only decrease a little bit. The fact that these measures of noncognitive abilities indeed explain additional variations that are not explained by other explanatory variables provides further support for our composite measures of C-A, LOC, and PWE to be valid measures of noncognitive abilities. Married Woman -8.37*** -8.50*** -9.68*** -9.85*** -2.78*** -2.79*** -2.85*** -2.87*** (2.31) (2.28) (2.37) (2.  The estimates in Columns (1) -(4) are multiplied by 100 and can be interpreted as percentage points. Robust standard errors are reported in parentheses, and they are clustered at the firm level. *** p<0.01, ** p<0.05, * p<0.1.
In Table 2, all of the estimates for noncognitive abilities are positive and statistically significant except for one instance. Because our composite measures for noncognitive abilities do not have numerical meanings, we discuss the estimates in terms of standard deviations. The strongest predictor of being a supervisor and the number of people supervised among the three noncognitive abilities is PWE. The estimates suggest that one standard deviation increase in PWE leads to an increases in the probability of being a supervisor by 2.40 (0.12×19.96) to 3.36 percentage points and an increases in the number of people supervised by 0.84-0.95. As one third of workers hold a supervisory position and the average number of supervisees is 4.47, these estimates are equivalent to an increases in the number of people supervised by 0.84-0.95. As one third of workers hold a supervisory position and the average number of supervisees is 4.47, these estimates are equivalent to a 7-10% increase in the probability of being a supervisor and a 19-21% increase in the number of supervisees. For workers scored one standard deviation higher in C-A, which means that they value challenge more than affiliation in a work environment, they are 1.97-2.48 percentage points (6-8%) more likely to hold a supervisory position and supervise 0.24-0.36 (5-8%) more employees. Workers with one standard deviation higher in LOC and thus exhibiting a stronger internal LOC are 1.53-2.14 percentage points (5-6%) more likely to hold a supervisory position and supervise 0.47-0.70 (11-16%) more employees.
The two variables correlated with cognitive abilities, years of schooling and performance, are also strong predictors for holding a supervisory position and the number of people supervised. One standard deviation higher in self-report performance is associated with 6.83-7.16 percentage points (21-22%) more likely to be a supervisor and with 1.24-1.26 (28%) more supervisees. One additional year of schooling is associated with nearly 2 percentage points more likely to be a supervisor and with around 0.5 more supervisees; if education is also measured in standard deviations, then these estimates are equivalent to about a probability of 5 percentage points (15%) and 1.3 more supervisees (29%). The estimates for age and work tenure show a concave relationship similar to a standard earning regression, suggesting that the likelihood of being a supervisor and the number of supervisees increase with age and work tenure but at a decreasing rate. Also, women, especially married women, are less likely to be a supervisor and with less supervisees than men. Based on Columns (4) and (8), single women are 3.90 percentage points less likely to be a supervisor and supervise 1.11 less people compared to single men. Married women are 9.85 percentage points less likely to be a supervisor and supervise 2.87 less people compared to married men. So there is a large gender gap in supervisory status. Table 3 presents the estimates from regressions of ever receiving promotions in the current workplace and the number of received promotions. In the left panel, Columns (1) through (4), the dependent variable is a dummy variable for ever receiving promotions, and the estimates and estimated standard errors in the left panel are scaled by 100. In the right panel, Columns (5) through (8), the dependent variable is the number of promotions received. Since promotion and supervisory status are closely related, most of the results in Table 3 are very similar to Table 2. Both C-A and PWE are strong predictors of the likelihood of receiving promotions and the number of promotions. For workers who have preference for challenge over affiliation, the estimates suggest that one standard deviation increase in C-A leads to an increases in the likelihood of receiving at least one promotion by 1.99-3.04 percentage points (4-6%) and an increases in the number of promotions by 0.05-0.07 (6-8%). For workers who adhere more to the Protestant work ethic, the estimates indicate that one standard deviation increase in PWE leads to an increase in the likelihood of receiving promotions by 1.34-1.61 percentage points (3%) and an increase in the number of promotions by 0.06 (7%). On the other hand, the estimates for LOC are small and insignificant, so LOC does not appear to be a strong predictor of promotion. Note that the estimates in Table 3 are potentially biased downward because we only have data on promotions received in the current workplace. Not only high ability workers may move to other firms instead of accepting promotions, but firms may recruit high ability workers from outside instead of promoting their current employees.   The estimates in Columns (1) -(4) are multiplied by 100 and can be interpreted as percentage points. Robust standard errors are reported in parentheses, and they are clustered at the firm level. *** p<0.01, ** p<0.05, * p<0.1.
The rest of estimates in Table 3 are also very similar to those in Table 2. The two variables that are correlated with cognitive abilities, education and performance, are strong predictors of receiving promotions and the number of promotions. The estimates indicate that one standard deviation higher in self-report performance is associated with 5.10-6.28 percentage points (11-13%) more likely to receive at least one promotion and with 0.11-0.14 (12-16%) more promotions. Also, one additional year of schooling is associated with 1.95-2.27 percentage points more likely to receive at least one promotion and with 0.43-0.47 more promotions. In terms of standard deviations, one standard deviation higher in education is associated with a probability of 5.36-6.24 percentage points (11-13%) more likely to receive a promotion and with 1.18-1.29 (130-143%) more promotions. The likelihood of promotion and the number of promotion increase with work tenure at a decreasing rate. Workers holding multiple jobs are more likely to be promoted and receive more promotions. On the other hand, married women or workers with unemployment experience are less likely to be promoted and receive less promotions.

Gender Gap in Supervisory Status and Promotion
In this section, we apply the Blinder-Oaxaca decomposition to understand how gender differences in noncognitive abilities contribute to the observed gender gaps in supervisory status and promotions. It decomposes the gender gap in the outcome variable into a part that is "explained" by the mean differences of the explanatory variables and an "unexplained" part that is due to differences in coefficients. The unexplained part is often interpreted as a measure of disadvantage or discrimination against women. We focus on the extended specification with firm fixed effects that are able to nonparametrically account for firm heterogeneity. Because we are not interested in estimating these firm fixed effects but worker characteristics and noncognitive abilities, we first regress each of our dependent variables and worker-level explanatory variables on firm fixed effects, and use the residuals to perform a detailed decomposition for these worker characteristics and noncognitive abilities.
We report the decomposition of the gender gap in being a supervisor (left panel) and the number of supervisees (right panel) in Table 4. For comparison, we first present both the total decomposition with and without the noncognitive abilities, and then present the detailed decomposition for each of worker characteristics and noncognitive abilities. Column (1) in the left panel shows that the overall gender gap in holding a supervisory position is 8.69 percentage points higher for men. Column (4) in the right panel shows that the overall gender gap is 2.2 more supervisees for men. The Blinder-Oaxaca decomposition indicate that when the noncognitive abilities are included in the model the explained gender gap significantly increases and they account for a large proportion of the explained gender gap. For the explained part of the gender gap, Columns (2) and (5), all but one estimates for these noncognitive abilities are statistically significant. The gender mean-differences in C-A, LOC, and PWE together contribute to the gender gap by 0.68 percentage points and 0.173 supervisees, which are about 36% of the explained gender gap in the likelihood of being supervisor and 70% of the explained gender gap in the number of supervisees. In terms of total gender gap, about 8% of the total gender gap in being a supervisor or the number of supervisees are due to gender mean-differences in these noncognitive abilities. For the explained part of the gender gap, cognitive abilities are equally important as noncognitive abilities. The two variable that that are closely related to cognitive abilities, education and the composite measure of performance, especially education, account for a similar proportion of the explained gender gap as the noncognitive abilities. The gender mean-differences in years of schooling and performance together contribute to the gender gap by 0.71 percentage points and 0.162 supervisees. For the likelihood of being a supervisor, they are about 37% of the explained gender gap and 8% of the total gender gap. For the number of supervisees, they are about 66% of the explained gender gap and 7% of the total gender gap.
Most of the gender gap are from the unexplained difference in coefficients, however. Only 22% (1.91/8.69) of the gender gap in holding a supervisory and 11% (0.25/2.20) of the gender gap in The estimates are based on a Blinder-Oaxaca decomposition from regressions using residuals of the dependent and explanatory variables that partial out firm fixed effects. The estimates in Columns (1) -(3) are multiplied by 100 and can be interpreted as percentage points. Robust standard errors are reported in parentheses, and they are clustered at the firm level. *** p<0.01, ** p<0.05, * p<0.1.
number of supervisees are explained by gender mean-differences in worker characteristics and noncognitive abilities. One reason for the explained gender gap to be small, especially for the number of supervisees, is that the estimates for job tenure (and its square) are negative and quite large. This is because women have almost two years longer of workplace tenure compared to men (see Table 1), and workplace tenure is a strong predictor for supervisory status. As the explained gender differences only account for 10-20% of the gender gap, the gender gap is largely driven by unobservables rather than mean-differences in explanatory variables. It suggests that women The estimates are based on a Blinder-Oaxaca decomposition from regressions using residuals of the dependent and explanatory variables that partial out firm fixed effects. The estimates in Columns (1) -(3) are multiplied by 100 and can be interpreted as percentage points. Robust standard errors are reported in parentheses, and they are clustered at the firm level. *** p<0.01, ** p<0.05, * p<0.1. face substantial disadvantages, or perhaps discrimination, in climbing up the ladder to management positions. Interestingly, from the detailed decomposition, the difference in intercept tem accounts for almost all of the unexplained differences in coefficients. As a result, nearly 78% (6.68/8.69) of the total gender gap in being a supervisor and 88% (1.93/2.20) of the total gender gap in the number of supervisees are not explained by any of these worker-level explanatory variables, neither their means nor their coefficients. Table 5 presents the results of the Blinder-Oaxaca decomposition for the likelihood of receiving promotions and the number of promotions received. Column (1) in the left panel shows that the total gender gap in the likelihood of being promoted is 2.64 percentage points higher for men. Column (4) in the right panel shows that the total gender gap is 0.093 more promotions for men. The results in Table 5 are very similar to the results in Table 6; while most of the gender gap are not explained by the observed mean-difference in worker-level explanatory variables, noncognitive abilities account for a large part of explained gender gap. The gender meandifferences in C-A, LOC, and PWE together contribute to the gender gap by 0.48 percentage points and 0.012 promotions. The two proxies for cognitive abilities are also important and explain a similar size of the gender gap in promotion as these noncognitive abilities. The gender mean-differences in years of schooling and performance together contribute to the gender gap by 0.62 percentage points or 0.014 promotions. In terms of the total gender gap in promotions, about 18% (23%) of the total gender gap in the probability of receiving promotions and 13% (15%) of the total gender gap in the number of promotions are due to gender mean-difference in these noncognitive (cognitive) abilities. It is somewhat difficult to interpret these estimates of explained differences in cognitive and noncognitive abilities as a proportion of the total explained gender gap, however. For the number of promotions, both the estimates for cognitive abilities and noncognitive abilities are greater than the total explained gender gap because of the large negative estimates for job tenure in Table 5. As in Table 4, it is because the estimates for job tenure are large and negative. The most important component is still the intercept term, which accounts for nearly all of the unexplained gender gap and about 72-88% of the overall gender gap in promotions.

Conclusion
This study empirically documents the effects of personality traits and work ethic on supervisory status and promotions from former socialist countries. We show that C-A, LOC, and PWE are strong predictors of the likelihood of being a supervisor or being promoted as well as the number of supervisees and promotions received. Although variables related to cognitive abilities such as education and performance are strong predictors for supervisory status, noncognitive abilities play an equally important role, and their magnitudes are about one third to one half of the magnitudes of cognitive abilities. Moreover, these noncognitive abilities can explain a modest proportion of the observed gender gaps in supervisory status and promotions. The results suggest that about 10-15% of the total gender gap can be explained by gender differences in C-A, LOC, and PWE, which is similar to the proportion of the total gender gap that is explained by gender differences in years of education and self-report performance. On the other hand, most of the gender gap are not due to any of the explanatory variables but the unobserved gender-specific intercept term. Overall, the results suggest that noncognitive abilities are equally important factors as cognitive abilities in determining labor market outcomes.


Status and Benefits of Renewable Energy Technologies in the Rural Areas of Ethiopia: a Case Study on Improved Cooking Stoves and Biogas Technologies

The majority of Ethiopia's people (85%) reside in rural areas, deriving their livelihood from agriculture. Ethiopia's energy system is characterized mainly by biomass fuel supply, with households being the greatest energy consumers. The household sector takes up nearly 94 % of the total energy supplies. Access to energy resources and technologies in rural Ethiopia is highly constrained which makes the energy supply and consumption pattern of the country to show many elements of un-sustainability. The concern on cooking practices, household economics, health, forest and agricultural resource management, and global greenhouse gas emissions has emerged as a transformative opportunity to improve individual lives, livelihoods, and the global environment. More decentralized renewable energy projects could play an important role in mitigating traditional biomass fuel use. Improved cooking stove (ICS) dissemination projects have been launched involving the private sector in the production and commercialization of the stoves. In doing so, about 3.7 million ICSs have been disseminated in the country so far which benefited stove users, producers and the total environment as about 30 million hectare of forest per year can be conserved. Conversion of animal waste to biogas energy to replace traditional fuel and use of the slurry as a fertilizer is the other current focus of the government of Ethiopia and installed more than 860 biogas digesters. The benefits obtained from these technologies are considerable and promising. However, the programs are not that much benefited the rural households where it had been intended to address. So, due attention should be given for those of the rural households in order to address the fuel wood crisis, environmental degradation and their health condition.

Introduction
Energy is the core factor that can affect other important developmental factors such as education, health, gender, environment, economic growth, food security and water. There should be sustainable access to modern energy services in order to improve the productivity and wellbeing of rural community. Approximately one-half of the world's population relies on biomass: wood, crop residues, dung and charcoalas the primary source of domestic energy, burning 2 billion kg of biomass every day in developing countries (Ezzati et al. 2000). It account for more than one-half of all energy use in many developing countries and for as much as 95 % of all energy use in some of the poorest nations (Manuel 2003). Other studies indicate that about 1.2 billion people lack access to electricity and 2.8 billion still rely on unsustainable solid biomass. Among these, around 85% are without electricity and 78% depend on solid biomass live in rural areas (Abebe et al. 2012;Memoire 2013). In Ethiopia, 50% of the population has an income that is below the poverty line. The wide spread poverty is mentioned as a critical factor in continued dependency on biomass energy sources and persistent traditional and inefficient means of utilizing them (Abebe et al. 2012). The people in the country rely on injera as their primary source of food which is most often heated by means of open fire. Baking injera accounts for over 50% of all primary energy consumption and over 75% of all household energy consumption. Due to the shortage of firewood in growing Ethiopian communities, baking injera on open fire is becoming increasingly expensive. Women and young children have to walk many miles a day to collect firewood to feed their families (Wolde-Giorgis 2002). Consequently, the rural people are being affected by indoor air pollution and environmental degradation and deforestation. According to a report by FAO (2010), Ethiopia loses about 141,000 ha of forest each year which in turn results in fuel wood scarcity.
From the total biomass consumption, fuel wood contributes about 77 %, dung 8.5 %, agricultural residue 7.5 %, charcoal 1 % and 6 % is from modern energy forms (EREDPC 2007). Such heavy reliance on biomass fuels, particularly, wood and dung, contribute to deforestation, and land degradation. This is partly because use of these fuels in urban areas is an important source of cash income for people in both urban and rural areas (Forum for environment 2010) The per capita energy consumption of Ethiopia (0.3 toe) is among the lowest in the world (GTZ 2000). However, the energy requirements of a large and fast growing population and the fact that the major proportion is supplied by traditional energy sources have serious implications on the natural resource base.

Energy Demand and supply in Ethiopia
The consumption of wood fuel has far exceeded its supply. Excessive dependence on biomass energy involves a trade-off in agricultural productivity, the crop residues and animal wastes being diverted from farms, where they supplement soil nutrition, to provide energy needs (Environmental science division (ESD), 2000). Similarly, as wood fuel scarcity has become increasingly serious, rural households who depend on collecting fire wood have to travel further distances (takes eight hours) (Cunningham et al. 2003) to obtain wood fuel, thus causing loss of human availability for productive work. Furthermore, wood fuel depletion will advance further deforestation and lead to a general environmental degradation (ESD 2000).
The energy consumption trends in Ethiopia indicate that the overall energy consumption is increasing from time to time and this is attributable to the high population growth and the associated increase in energy demand. Due to the unsustainable utilization of natural resources, there has been an imbalance between the demand for fuel wood and the sustainable supply. The fuel wood demand and supply projection (Fig 1) shows that the demand is growing at a faster rate than the supply (EFAP 1994). Such considerable existence of imbalance on demand and sustainable supply results in deforestation which is a significant issue in Ethiopia, with a large population dependent on wood fuel. Ethiopian forests are being destroyed at a rate of 200,000 hectares a year, with demand exceeding renewable supply by more than a factor of five. Studies have indicated that the total forest coverage in Ethiopia has been reduced from 40% to 3 % in the 20 th century (Forum for environment 2010).
In general, the pattern of energy supply and consumption shows many elements of unsustainability. The energy problem in the country arises not from excessive reliance on non-renewable energy sources, but rather that one form of energywood fuel-is being consumed at an unsustainable rate, while the vast potential of other forms of renewable energy (solar, wind, hydropower, etc) remains undeveloped. This could be due to the lowest income of households who are still below the poverty line and the household energy activity is loaded on women which together limit the development of sophosticated technologies in the household level.
In most cases, the traditional energy consumption is related to low technology energy conversion systems. Low technology energy conversion usually implies low efficiency (average 10 %) and high pollution (Chipman and Dizioubinski 1999). Thus, technology is a critical link between the supply of energy services and access, affordability and environmental compatibility. Renewable energy technologies: Solar energy, wind energy, biofuels and improved cooking stoves (ICS) are those of the technologies.
The intention here is just to assess the status and benefits of production and dissemination of improved cooking stoves (ICS) and biogas technologies as these are the technologies being distributed in the rural areas of Ethiopia. In this regard, the government of Ethiopia has designed related energy policy so as to address the problem of the fuel wood demand and supply and the associated problems.

Methodology
To obtain the necessary data both primary and secondary were used. Secondary data was gathered from literatures published by GIZ, SNV Ethiopia and other sources from internet more for ICS. To collect primary data both the federal and regional rural energy institutions officials, stove producers, masons' and energy technology owners were communicated and interviewed. Concerning the biogas data, structured interview questionnaires for the two respondent groups; biogas user households and masons was formulated to conduct field survey. Gender aspects were considered in order to collect the views of women as they could be mainly affected by energy issues. Before the fieldtrip it was assumed to visit 2-3 HH per district per day, in order to be able to have enough time for a deeper look of each plant and for travelling from one to another plant. Since the plan was to spend 4 weeks for the trip, the result was 16 survey days plus two travel days per week. That makes 16days*2HH=32HH (biogas plant owners). 32 HH (3.7%) of all biogas plants (859 plants) were randomly selected but 28 were visited due to transport problem. The selection of plants in each of the four regions and in each district was based on the total number of biogas plants installed. Only those districts having more than 25 biogas plants were considered in the sampling process. For those districts having between 25 and 100 biogas plants, 2 HH were interviewed. For those having more than 100 biogas plants, 3 or 5 HH were chosen to be surveyed.

Status and Benefits of improved cooking stove (ICS) dissemination
The benefits associated with ICS fall in two categories: those that are internal to the household and those that are external. Reduced concentrations of smoke and consequently indoor air pollution; money and time saved in searching fuel; and reduced biomass use as reported by Dereje (2005), i.e decreasing fuel wood consumption will also decrease pollution and the proportion of income share that is spent for energy.
Not all the benefits are experienced or perceived immediately by the end users. Since the users feel the impacts of internal benefits directly, these may have a greater influence on the decision to invest in ICS. Less pressure on forest and energy resources (deforestation); reduced greenhouse gases; and skill development and job creation in the community producing and installing the stoves are considered to be the external benefits.

Economic advantage for ICS producers
Up to 2013, more than 500 small-scale producers (416 (83 %) are active) have been established in 280 districts in 11 regions (Figure 2) of the country for 'mirt' stove and are being benefited from the programs (GIZ 2010). According to this study, and responses from interviewed producers in Amhara and Oromia, the minimum number of stoves sold per month was 45. The current cost to produce one 'Mirt' stove is about 61 Ethiopian Birr (ETB) (including 6 ETB for his own labor cost), and the producer sells the stove with an average price of 90 ETB, then he/she has a profit margin of around 48 %. Therefore, the producers can get a minimum net profit of 1305 ETB per month from 45 'mirt' stoves.
For 'gonziye' stove, the cost for production is 21 ETB (including 15 ETB for labour cost) and sells it with a current price of 50-60 ETB. Thus the producers have a minimum profit margin of 138 %. The minimum numbers of stoves sold per month is 10. Therefore, the producers receive a net profit of 290 ETB from 10 stoves only.
According to the interview made with Ethiopian alternative energy production and promotion corporate (EAEPPC), a total of 5506 producers have been trained from nine regions and two administrative cities of Ethiopia up to 2012/13 ( Figure 2) and become advantageous from the profit.

Advantage of using ICS for Biomass conservation
Studies (Table 1) show that 14 ha/year and 15-18 ha/year of forest is preserved from a single 'mirt' and 'gonziye' stoves, respectively. That means 1282161*14~18 million and 3-3.5 million ha land per year is preserved by the use of 'mirt' and 'gonziye' stoves, respectively from 2006-2013 (Table 2). This indicates that use of 'mirt' and 'gonziye' stoves significantly reduce the demand and maximize the supply for fuel wood.
The CO2 sequestered by the preserved forest per year can also be calculated. From Table 1, it is evident that use of a single 'mirt' stove help to preserve 14 ha of land and thereby 980 ton of CO2 per year. Accordingly, 1282161*980= 1257 million ton of the green house gas is sequestered per year. From the 'gonziye' stove we have 195867*1058 (or 1269) = 207 to 249 million ton of CO2 can be stored per year. This again can be converted to monetary values for carbon credit projects as indicated in Table 2.
It is also evident that production and dissemination of gonziye injera stove (especially the new version) is highly important as its fuel saving is larger (64 %) as compared to the open fire and 14 % more than that of 'mirt' stove. Besides, 'gonziye' is a stove made from clay which is easy to be adapted by artisans (potters) (after a short training) and the rural household users so that they can easily buy and use it relative to 'mirt'.

Benefits of ICS for women and Children
Another important point is that most of the internal benefits work to improve the condition of women, who are predominantly responsible for cooking and collecting fuel wood particularly in the rural areas of Ethiopia. Additionally, in many rural settings, women cook with their children strapped on their backs or the children are always around in the kitchen. Any reduction in pollutants emitted from cook stoves will be beneficial for children's as well as for women's health. Women are also participating in stove production. Gender segregated data monitoring by GIZ and EAEDPC revealed that women producers are more effective than men. Hence the recruitment of new stove producers is made to be more females (Figure 3).

Size of biogas plants installed
According to the feasible study of the biogas program of Ethiopia, those rural people who have at least four heads of cattle can have a biogas plant (Eshete et al. 2006). The survey result showed that the corresponding minimum size of biogas digesters for daily cooking and lighting is 6m3. The regional wise distribution is shown in Table 3. Among the observed biogas plants 6m3 is common in Tigray and SNNPR. However, 8 and 10m3 are common in Amhara and Oromia regions, respectively. Generally, it can be said that 6m3 biogas plants are common in the country level which is an indication that the biogas owners possess more than two heads of cattle.

Economic benefit of installed biogas plants
It was found that once a biogas plant is installed, it can generate money for farmers at least in two ways: substituting expenses of fuel and chemical fertilizer. It is estimated that the average saved money per owner per year is 4493, 2150, 3898 and 3400 ETB in Tigray, Amhara, Oromia and SNNPR respectively. The overall saved money is shown in Figure 4. The second income generation, replacement of the chemical fertilizer by the slurry, is not that much practiced, but many farmers intend to use it in the future. So far, 682 ETB in Tigray, 270 ETB in Oromia and 300 ETB in SNNPR have been saved per owner and year. Thus, more than 5175 ETB/owner can be saved per year if a farmer installs a biogas plant to use the gas as energy source and the slurry as fertilizer. Tigray is the region where highest replacement of fuel and chemical fertilizer is observed, while the lowest replacement occurs in Amhara region. Two farmers in Oromia have already started selling the slurry after making compost. One sells it for 15ETB/25kg of compost which supplements his cattle fodder, and the other sells 100ETB/container (the container is about equal to 70Kg). The latter has developed a surplus income of 3300ETB by selling in average 33 containers/month.

Mason's income
One of the benefits of biogas plant dissemination is maximizing the masons' income. The masons' income before starting biogas installation was 300-500ETB/month. However, the monthly income is maximized and it is 1300-6000 ETB as shown in Table  4. The amount of payment for masons to install a specified biogas plant differs from region to region. In Oromia and SNNPR, the biogas owners pay 1114-1739 for masons depending on the volume of the plant. In Tigray and Amhara however masons are only paid from the subsidy by the government (Table 5). Based on Table 5 it can be said that there is significant difference in the payment for masons of the northern and southern regions. Such a difference may not be encouraged as they may move from the north to the south which may hinder the plan of biogas plant distribution in the northern part of the country.
In general, results from interviews of masons indicate that they are highly benefited (income increases more than 100%) from the program and even they kept aside their previous work (worked up to 22 years) and totally depend on the income of installing biogas plants. They have started installing plants by organizing themselves and making a union to increase their economic benefit.
For the advantages, it can be positively noticed, that expectations and experiences are very similar: cooking, lighting, fertilizer and time safe, the factors leading to biogas are satisfied by the biogas system. Concerning the gender ratio, both men and women vote these 4 factors as their majors, though for women the cooking improvement is most important, while men aim at producing fertilizer.

Environmental analysis
Benefits can be tangible (we can put value on it) and intangible (we cannot put value on it). The emission saved (other than carbon) from wood, charcoal and kerosene, controlling pollution by the proper use of slurry, minimization of indoor pollution due to the use of traditional fuels and the decrease of women's load are considered to be intangible for this study, but highly rewarding. The tangible benefits are presented below.

Decrease in deforestation
Deforestation has negative implications for the local environment (increased erosion) and the global environment (acceleration of climate change, threatened biodiversity). The reduction of forest cover also reduces the existing capacity to sequester carbon, and releases the already fixed carbon. According to the global non-timber forest product (NTFP) (2006) report, many African nations have had over three quarters of their forest cover depleted.
This study reveals that because of the dissemination of biogas in Ethiopia deforestation is decreasing and will be reduced more. The amount of fire wood saved due to the introduction of biogas was surveyed and the equivalent number of trees was calculated using literature value i.e. 712kg of dry wood is equivalent to 6 large trees (USDA forest service 2010), and to produce 1kg of charcoal 5.45kg of wood are required (Rensselear, 2010). Thus using 6trees/712kg of wood and 1kgcharcoal/5.45kg of wood as conversion factors, and taking the total biogas users into consideration, the yearly decline in deforestation is estimated and showed in Figure 5.

Emission saving
Emissions during charcoal production are more significant than those from charcoal burning. The global warming potential of current largely inefficient methods of charcoal production (pyrolysis) is considered to be higher than that of emissions during combustion (Global NTFP 2006).
A healthy tree stores about 13 pounds (6kg) of carbon annually (USDA forest service 2010). Figure 5 indicates that yearly 72% (44196) trees are saved due to biogas dissemination so far in the four regions of Ethiopia by replacing some part of the fire wood and charcoal by biogas. Besides the carbon saved, which otherwise would be released when cutting trees, about 265176kg of carbon is stored per year. The carbon emission savings for each of the four regions from wood, charcoal and kerosene is shown in Figure 6. Figure 6. Carbon emission savings Source: Survey data and Jindal, 2006 According to Kituyi (2002) and Jindal (2006), carbon sequestration projects' economic and environmental benefits are particularly relevant for Africa which needs increased investment to support poverty alleviation and infrastructure development. Accordingly, the numbers of trees saved due to biogas introduction sequester carbon which leads to the clean development mechanism (CDM) mentioned in article 12 of the Kyoto protocol. The international prevailing price for carbon credits range from $3.50 to $15.80 per ton of CO2 sequestered (Jindal, 2006). Thus, the economic benefit obtained can be calculated by taking the average value $9.65 and the amount of carbon sequestered. About $10538 could be gained only from 859 biogas users. Imagine the income if at least 50% of the country's population would be biogas user.

Conclusion
Although there is a significant experience in the production, performance tests, promotion and dissemination of ICS and biogas in Ethiopia using strategies like: focused on commercial stove dissemination (rather than direct subsidy); encouraging private sector participation in production and marketing; promoting decentralized production; enhancing the capacity of public institutions and organizations to promote energy efficiency; and promoting public awareness on energy and environment issues, the disseminated ICS to the rural households is very low (less than 2% of the total ICS disseminated), and only 6% of the intended biogas has been installed. However, growth in the annual dissemination rate and the degree of dissemination to low-income rural households is more relevant criteria for the growth and scale-up phase that the Ethiopian program is currently in as almost all households use traditional biomass (wood, dung and crop residue). Moreover, the study revealed that almost all of the disseminated ICS are without a chimney implies that harmful substances caused by indoor air pollution are not fully protected i.e. one advantage of ICS has been missed. From the results obtained it can be deduced that biogas dissemination in the household level brings social, economical and environmental benefits to each user, district population and the country as a whole. Nevertheless, rate and coverage of rural households is negligible relative to the number of people live in the rural areas of Ethiopia.