View
218
Download
2
Tags:
Embed Size (px)
Citation preview
Evaluation of the Costs and Benefits of Evaluation of the Costs and Benefits of Household Energy and Health InterventionsHousehold Energy and Health Interventions
31st IAEE International Conference,Pre-Conference Workshop on Clean Cooking Fuels
Istanbul, 16-17 June 2008
Guy Hutton1, Eva Rehfuess2 and Fabrizio Tediosi3
1 World Bank, Phnom Penh, 2 World Health Organization, Geneva, 3 Università Bocconi, Milan
Economic evaluation:
• demonstrates the economic return of investments in an intervention
• compares the cost-effectiveness/ costs and benefits of one intervention against another
• helps policy-makers allocate their limited budget
Caveat:Economic pay-off is not the only criterionfor identifying sound interventions.
Why economic evaluation?
Cost-benefit versus cost-effectiveness analysis
Courtesy of Nigel Bruce/Practical Action
Cost-benefit analysis• Do all the benefits outweigh all the
costs of an intervention?• perspective: society, multiple sectors• unit: benefit-cost ratio in $
Courtesy of Dominic Sansoni/World Bank
Cost-effectiveness analysis• How can one maximize health for
available resources?• perspective: health sector• unit: cost-effectiveness ratio, e.g.
in $ per healthy life year gained
Comparison measure
Economic costs:
annual average economic benefit of intervention
annual average economic cost of intervention
Benefit-cost ratio (BCR)
• fuel costs, stove costs• programme costs (including
R&D investment, education)
• reduced healthcare costs• health-related productivity gains• time savings• environmental impacts
Economic benefits:
=
Interventions and scenarios modelled
• Basic approach:– analysis for 11 developing and middle-income WHO subregions
– separate analysis for urban and rural areas
– baseline year 2005; ten-year intervention period (2006-2015)
– 3% discount rate applied to all costs and benefits
• Baseline:current mix of dung, wood, coal, cleaner fuels, etc.
• Intervention 1: (50%, 100% coverage, pro-poor)switch to LPG (ethanol)
• Intervention 2: (50%, 100% coverage)cleaner-burning, fuel-efficient “rocket-type” stove
Important benefit assumptions:health impacts and productivity gains
• Conclusive evidence for health impact of indoor air pollution:– acute lower respiratory infections (ALRI): children under five– chronic obstructive pulmonary disease (COPD): adults above 30– lung cancer (coal use): adults above 30
• Avoided health impacts:– ALRI, COPD, lung cancer (WHO methodology for burden of disease)– LPG/ethanol: risk reduction to baseline risk– stoves: 35% risk reduction (personal exposure reduction, lag times)
• Health-related productivity gains:– number of illness-free days and deaths avoided, for type of illness and
level of severity– valued using human capital approach: daily Gross National Income
(GNI) per capita and income-earning life from 15 to 65 years
Important benefit assumptions:time savings and environmental benefits
• Time savings:– due to reduced fuel collection (survey data in selected locations) – due to time saved on cooking (laboratory data)– valued at GNI per capita
• Local environmental benefits:– avoided deforestation – valued using tree replacement cost (labour + sapling + wastage)
• Global environmental benefits:– averted CO2 + CH4 emissions (published studies)
– valued using carbon trading values (Clean Development Mechanism)
Proposed voluntary MDG target:halve, by 2015, the population cooking with solid fuels,
and make improved cookstoves widely available
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
1990 2003 2015 2015 MDG
mil
lio
n p
eop
le
Non-SFU
SFU
People to gain access to cleaner fuels to reach the voluntary MDG energy target
World Health Organization, Fuel for life: household energy and health. WHO, 2006.
Results (US$ per year): Providing access to LPG, by 2015,
to half of those burning solid fuels in 2005
Programme cost: 130 million
Total cost: 13 billion
Total benefit: 91 billion
Benefit-cost ratio: 7:1
Benefit-cost ratio*: 4:1
Sensitivity analysis: 2:1 – 29:1
Courtesy of Nigel Bruce/Practical Action
* Intervention cost savings included with economic benefits.
Results (US$ per year):Making improved stoves available, by 2015,to half of those burning solid fuels in 2005
Courtesy of GTZ
Programme cost: 650 millionTotal cost: -34 billion
(2 billion costs,- 36 billion fuel
savings)
Total benefit: 105 billion
Benefit-cost ratio: negative
Benefit-cost ratio*: 61:1
Sensitivity analysis: negative
* Intervention cost savings included with economic benefits.
Distribution of economic benefits
LPG Improved stoves
Health-related productivity gains and time savings due to less fuel collection and cooking constitute the greatest benefits.
0
10000
20000
30000
40000
50000
Health
care
savi
ngs
Product
ivity
gai
ns (ill
ness)
Product
ivity
gai
ns (dea
th)
Time
savin
gs
Enviro
nmen
tal b
enef
its
mill
ion
US
$
01000020000
3000040000500006000070000
8000090000
100000
Health
care
savi
ngs
Product
ivity
gai
ns (ill
ness)
Product
ivity
gai
ns (dea
th)
Time
savin
gs
Enviro
nmen
tal b
enef
its
mill
ion
US
$
Key limitations
• Considerable variation between world regions, as well as between urban and rural settings.
• Findings based on global/regional data and assumptions do not necessarily apply to specific countries or programmes.
• Idealistic, target-based scenarios versus realistic, programme-based analyses.
• Need to refine optimistic assumptions (e.g. effectiveness of stove, programme costs, unsustainable harvesting of firewood) and pessimistic assumptions (e.g. greenhouse gases included, value of avoided emissions).
Conclusions
• Globally, both a switch to cleaner fuels and the promotion of fuel-efficient, cleaner-burning stoves appear to be highly cost-effective.
• Making the economic case remains a challenge:
– Household energy and health is an inter-sectoral issue with no clear policy lead across countries.
– Programme level versus household level: Where do costs occur? Where do benefits occur?
• There is a need for the application and refinement of current cost-benefit analysis methodology at national and programme levels.
Courtesy of Crispin Hughes/Practical Action
For more information:http://www.who.int/indoorair
Dr Eva RehfuessPublic Health and EnvironmentWorld Health Organization1211 Geneva 27SwitzerlandEmail: [email protected]