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WHO IAQ Guidelines: Household Fuel Combustion – Review 11: Costs and Financing

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WHO IAQ Guidelines: Household Fuel Combustion – Review 11: Costs and Financing WHO IAQ Guidelines: household fuel combustion – Review 11: Costs and financing WHO Indoor Air Quality Guidelines: Household Fuel Combustion Review 11: Costs and financing for adoption at scale Convening lead authors: Kristin Aunan1,2, Hisham Zerriffi3 Lead author: Nigel Bruce4,5 Affiliations 1CICERO (Center for International Climate and Environmental Research, Oslo), Norway 2Dept. of Chemistry, University of Oslo, Norway 3Liu Institute for Global Issues, University of British Columbia, Vancouver, Canada 4Department of Public Health and Policy, University of Liverpool, Liverpool, UK 5 World Health Organization, Public Health, Social and Environmental Determinants of Health, Interventions for Healthy Environments, Geneva, Switzerland Convening lead authors: those authors who led the planning and scope of the review, and managed the process of working with other lead authors and contributing authors, and ensuring that all external peer review comments were responded to. Lead author: that author who contributed to one or more parts of the full review, and reviewed and commented on the entire review at various stages. Disclaimer: The work presented in this technical paper for the WHO indoor air quality guidelines: household fuel combustion has been carried out by the listed authors, in accordance with the procedures for evidence review meeting the requirements of the Guidelines Review Committee of the World Health Organization. Full details of these procedures are described in the Guidelines, available at: http://www.who.int/indoorair/guidelines/hhfc ; these include declarations by the authors that they have no actual or potential competing financial interests. The review was conducted in order to inform the development of recommendations by the Guidelines Development Group. Some of the authors are staff members of, or consultants to, the WHO. The authors alone are responsible for the views expressed in this publication, which do not necessarily represent the views, decisions, or policies of the WHO. This article should not be reproduced for use in association with the promotion of commercial products, services or any legal entity. The WHO does not endorse any specific organization or products. Any reproduction of this article cannot include the use of the WHO logo. 1 WHO IAQ Guidelines: household fuel combustion – Review 11: Costs and financing Table of contents Summary ................................................................................................................. 3 1. Introduction and scope .................................................................................... 4 2. Costs of a representative range of types of stove and fuel interventions .. 5 2.1. Technology Cost Trends ........................................................................................ 5 2.2. Stove Costs versus Programmatic Costs ............................................................ 8 2.3. Macro-Level Cost Estimates .................................................................................. 9 2.4. Conclusion ............................................................................................................. 11 3. Economic analyses: Cost Effectiveness and Cost benefits analysis ........ 11 3.1. CBA Versus CEA in Determining Economic Value of Cookstove Programs . 12 3.2. Guidelines for Conducting CBA .......................................................................... 13 3.3. CBA and CEA Evidence for Cookstoves ............................................................ 18 3.3.1. CBA studies ............................................................................................................. 18 3.3.2. CEA health studies ................................................................................................. 20 3.3.3. CEA for other outcomes ....................................................................................... 21 3.4. Conclusion ............................................................................................................. 22 4. Financing universal energy access .............................................................. 22 4.1. Producer Versus Consumer Financing Options ................................................ 24 4.2. Role of the Public Sector and Subsidies ............................................................ 24 4.3. Climate co-benefits of cleaner household fuel combustion and opportunities for carbon finance ............................................................................................................ 26 4.3.1. Climate impacts of incomplete combustion products ................................. 26 4.3.2. Opportunities to secure carbon finance .......................................................... 30 5. Conclusions .................................................................................................... 33 References ............................................................................................................ 34 2 WHO IAQ Guidelines: household fuel combustion – Review 11: Costs and financing Summary Background The cost incurred by various stakeholders in implementing a cookstove program or project can pose significant challenges to improved cookstove diffusion. In considering how the Indoor Air Quality Guidelines: Household Fuel Combustion might be implemented, it is necessary to understand their financial implications and analytical tools that might be brought to bear in assessing any particular intervention. Objectives This aim of this review was to provide data on, and frameworks of analysis for, the financial implications of trying to improve air quality via changes in cooking technologies and fuels. Methods This review summarizes (at the micro and macro levels), the financial implications of cookstove diffusion. In order to aid users of these guidelines in terms of thinking about implications of implementing programs to improve air quality through cookstove interventions, a short summary of Benefit-Cost Analysis (BCA) and Cost-Effectiveness Analysis (CEA) is also reviewed. This includes both a summary of the existing WHO Guidelines on BCA for cookstoves, as well as results from applications of these methods at a global, regional and local level. Options for alleviating some of the financial challenges to cookstove interventions are discussed, particularly the role of carbon markets. A review of the climate implications of the use of different fuels for cooking is provided and a discussion of the potential for carbon markets to solve some of the financial hurdles of implementing clean cooking is presented. Findings At the micro-level, improved cooking technologies range widely in price as do the costs of implementing clean cooking programs. However, it is clear that the cleanest options also present the highest financial burden on poor households. At the macro-level, while estimates for providing universal access to clean cooking vary as well, they are all in the range of billions or tens of billions of dollars per year. This is a small fraction of existing energy infrastructure investments and of existing energy subsidies and well within reach of the international community. When BCA or CEA approaches have been applied, all of the existing analyses point to significant benefits outweighing costs in almost all cases. Carbon markets may be a significant source of revenue that can help both enterprises and households access better stoves. However, they also have their limitations. Conclusions While the overall financial burden of providing universal access may be manageable, actually mobilizing resources and, in particular, determining the best avenues for distributing resources continues to pose obstacles. Mechanisms need to be implemented to solve the financing problem at multiple levels. In particular, both implementers of clean cooking technologies and consumers of those technologies need new options for solving their particular financial obstacles. 3 WHO IAQ Guidelines: household fuel combustion – Review 11: Costs and financing 1. Introduction and scope Achieving wide-spread dissemination of cleaner cooking options entails overcoming a number of challenges from developing appropriate policies to navigating complex household decision-making processes in order to encourage uptake of new stoves and/or fuels. One clear challenge that continues to defy easy solutions is the financial one. Adopting new cooking technologies and fuels requires an investment on the part of stakeholders (e.g. the household, non-governmental organizations (NGOs), donors, governments, the private sector, etc.). Even though the benefits generally outweigh the costs, it is not always a given that a stove program can be successful on financial grounds or that relevant stakeholders will have either the willingness or the ability to pay for cleaner cooking options. Whether it is the fact that households have limited financial resources to purchase stoves and fuels despite the benefits or the burden that some subsidy programs have placed on government budgets, solving the financial challenge will be a major factor in implementation of the Indoor Air Quality Guidelines: Household Fuel Combustion. This aim of this review was to summarize and synthesize information on, and frameworks of analysis for, the financial implications of trying to improve air quality via changes in cooking technologies and fuels. It seeks to highlight some of the challenges and to provide pointers to some solutions. This review addresses
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