Cost-Benefit Analysis of LPG Cookstove Intervention

Overview

This article has been adapted from UNEP-DTU Partnership's Cost-Benefit Analysis.

Tanzania is currently hosting 358,900 refugees and faces a protracted humanitarian crisis. The government has stressed the importance of finding a rapid solution to the growing issue of woodfuel collection, stating that the environmental destruction perpetrated by the refugees will no longer be tolerated. At a humanitarian level, energy has been identified as a major failure in the UNHCR mandate to protect Persons of Concern (PoC), due to the increase in reported cases of conflict and violence with the local communities surrounding Nyarugusu camp over access to woodfuel. Therefore, a pilot program to distribute LPG as cooking fuel was undertaken in the camp between December 2016 and March 2017.

Scope of Research

The aim of this research is to bring an economic rationale to the core of the humanitarian decision making process in examining the specific issue of cooking in the Nyarugusu refugee camp. In conducting this research, we pursued two objectives:

1. To calculate the benefit-cost ratio of a Liquefied Petroleum Gas (LPG) stove program in the camp. The business-as-usual scenario entails the use of traditional cookstoves.
   
2. To assess the Willingness-To-Pay (WTP) for LPG among the camp’s residents. 

Main Findings

• A program to distribute LPG stoves to all households in Nyarugusu camp will achieve $45,358,352 in net benefits after ten years (using a 3% discount rate). The benefit-cost ratio (BCR)  is 1.76, meaning that for each dollar invested, the LPG program will yield a return of $1.76. Even with a short time-frame of 5 years, the program has a Net Present Value of $19,528,809 and a BCR of 1.6.
• Furthermore, a switch to LPG stoves would reduce Carbon Dioxide emissions by a factor of 10. The mitigation potential of this intervention is an annual 111,032 tonnes of CO² equivalent. Additionally, this fuel switch would annually save 2,167 ha of forest, by removing charcoal and firewood demand.
• 53% of households buy their fuel, spending a monthly average of $12 (the capped monthly salary in the camp is $27).
• For those collecting their own fuel, households spend a weekly average of 19 hours on this task.
• Households spend over 6 hours per day cooking with traditional cookstoves.
  
• Household air pollution from the use of solid fuel contributes to respiratory diseases, where lower respiratory tract infections is the third ranked cause of mortality in the camp. 

Publication

Read the full study.

Further Information

• Liquefied Petroleum Gas (LPG)
• Cooking with Liquefied Petroleum Gas (LPG)
• BLEENS - Biogas, Liquefied Petroleum Gas, Electricity, Ethanol, Natural Gas, and Solar
• LPG Stoves