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# Epidemiologic and Economic Impact of Natural Gas on Indoor Air Pollution in Colombia 2007

Written By

Nelson Alvis Guzmán, Luis Alvis Estrada and Fernando De la Hoz Restrepo

Submitted: October 15th, 2010 Published: September 26th, 2011

DOI: 10.5772/16812

From the Edited Volume

## The Impact of Air Pollution on Health, Economy, Environment and Agricultural Sources

Edited by Mohamed K. Khallaf

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## 1. Introduction

Colombian development since 1990, it can be describe according to evolution of three components of the Human Development Index: internal product, life expectancy and education. As for the gross domestic product, there has been show a slow but steady growth, excluding the 1999 crisis that resulted in a decrease of about four years, from which now is recovering. Life expectancy of Colombian population increased for about 5 years during 90th decade, because important epidemiologic and demographics changes, such as improvements in infant mortality and maternal health services, leading to a gradual recovery of the indicator, with some differences between genders, because of the greater impact than men suffered from the effect of violence. In education, there have had significant advances that although were hampered by the economic crisis, currently with the emphasis in social policies relation to education, there has been considerable improvement in the indicators. Although the overall picture is positive, there are still large differences between population groups, making equity a major challenge to human development in Colombia. Analyses by state, indicators are similar between Bogota and Hungary (country of high human development, 38th in the world) while the Chocó resemble Kenya (country of low human development, since 148 in the world). For Zones, most of the indicators in rural areas are lower than in urban areas and between social groups by deciles of the income distribution is unsatisfactory (Departamento Nacional de Planeacion de Colombia, [DNP], 2005).

In search of a universal sign for development, Colombia and 188 nations agreed at the Millennium Summit in September 2000 within the framework of the General Assembly of the United Nations, eight Millennium Development Goals in the long term, with coordination of UN, World Bank, IMF and OECD. Each country undertook to define national targets, which can be reached in 2015, for each of the Target (DNP, 2005).

However, there are studies that question the possible compliance of Colombia, some of the MDGs, especially related to poverty reduction: "... the scope in terms of poverty reduction is not so encouraging. Although according to international standards (PPP U.S. $1 and$ 2 PPP), the country would be very close to achieving the target reduction of 50%, it is clear that when the measuring stick becomes the national poverty line developments indicate that the moderate level of poverty would be only 20% lower than the 2001 (The poverty rate would rise from 55.2% to 44.2%). These results indicate that progress in other areas of society is not enough to boost the capacity of generating household income Colombians and that the strategy should focus on attacking directly additionally other determinants of poverty such as lack of access to labor markets and financial and serve the population in extreme poverty in an integrated way to break the poverty traps facing this population " (Nuñez, 2007).

In this sense, the MDGs by the different countries depends not only on the commitment of states to finance social development and undertake appropriate actions, also the contribution of civil society and the various cooperating agencies are willing to make to achieve more just societies.

Moreover, both programs targeting of social spending by the state as part of national and international, are coherent strategies for progress towards achieving better results in material development and social welfare. However, although the application of resources in development projects and / or involve social opportunities for communities to improve their capacities to address the different risks; the sole decision to implement grant programs to improve access to social services, does not mean that the results are guaranteed. Therefore, it is necessary to impact assessment procedures for specific programs and projects in order to gauge the true impact of the funds on the expected results.

## 2. Household natural gas as health technology

Living conditions, especially those related to health, an important influence on the economic situation and welfare of everyone in any society, which is particularly true in low income countries (where social safety nets are weak or nonexistent) and for the poor, due to the vicious circle of poverty and disease (Schultz, 1962). Health is considered a capital stock which the product is long lasting health, which can be used to obtain money or wages in the market for "goods" in the home or non-market sector (Grossman, 1972). It is well documented the relationship between health risk and poverty (World Health Organization [WHO], 2001).

On the other hand, the use of solid fuels for cooking and / or heating is the largest source of air pollution inside houses in the world. Nearly half of households in the world continue to use biomass fuels (wood, charcoal, dung and agricultural wastes). When biofuels are used, for example the stoves inefficient combustion, generate high concentrations of pollutants. Exposure to biomass smoke has been associated with low birth weight, acute respiratory infections, infant mortality and recently, anemia and mental retardation in children (Mishra, 2007). These pollutants, called solid fuel smoke (smoke) include respirable particulates, carbon monoxide, nitrogen oxide and sulfur, benzene, formaldehyde, 1,3 butadiene and polyaromatic compounds such as benzo (alpha) pyrene (Smith, 1987; Pandey, 1989). In households with limited ventilation, (both in developing countries and industrialized) exposure to such contaminants is higher in women and children, who stay longer in the house. Their measurements showed that concentrations of these pollutants were above the international standards (WHO) (Smith, 1987; Bruce, 2000).

The combustion of natural gas worldwide is classified as the cleanest among the traditional industrial fuels. In fact, emissions of particulate matter to meet the highest international standards, without having to invest in gas processing equipment. One of the great advantages of natural gas over other fuels, are the low combustion emissions, which can be seen in the following table (Innergy Soluciones Energeticas, 2007).

 Fuel MPParticulado Matter SOXSulfur Oxide NOXNitric Oxide Gas Natural 1 1 1 Gas City 3 61 0,5 Gas 1,4 23 2 Kerosene 3,4 269 1,5 Diesel 3,3 1.209 1,5 Fuel Oil N° 5 15 4.470 4 Fuel Oil N° 6 39,4 4.433, 4 Coal 157 5.283 6 Firewood 140 13 2

### Table 1.

Concentrations of contaminants in relation to alternative fuels different of the NG

Most research on environmental pollution intradomicilliary has been conducted in developing countries and has been associated with the determination of pollutants and their sources (Spengler, 2001). This has been done by estimating the levels of risk factors generated by the combustion of biomass, through the determination of the exposure variable. To do this, Smith et al. 2004, proposes the use of the well established exposure-response epidemiological studies conducted outside the houses and measuring concentrations of pollutants, such as an estimate of what happens inside the houses (Smith, 2004). Another approach is to use studies in developing countries, dividing the population into categories of exposed and unexposed to smoke the product of biomass burning. However, there are gaps in data on exposure of such populations, and variability between groups exposed. In addition, this method can be affected by the differential use of fuels and different mixtures of pollutants, which could prevent establishment of only two categories.

Apart from the use of biomass fuels, another factor to consider is related to the ventilation conditions of housing and particularly the kitchen. This equation can build a better, in which exposure to smoke from solid fuels (biomass) is a function of the number of people using such fuels, multiplied by a factor of ventilation.

P e P b × F V E1

PE = Population exposed to smoke from biofuels

PB = Population using biofuels

FV = Ventilation factor

Based on this model were estimated using solid fuels for subregions in the world (Smith, 2004). For the subregion in which America is Colombia (AMR-B), the population using solid fuels was estimated at 24.6% (CI. 18.8-30.8). This means that in Colombia about a quarter of the population could be using biofuels. Of total DALYs, it is estimated that 2.7% is attributed to diseases associated with smoke from solid fuels (2.5% in men and 2.8% in women). Of this total, 32% occur in Africa (AFR-D), 37% in Southeast Asia (SEAR-D) and 16% in China, Australia and other countries (WPR-B) (Smith, 2004). Surely, that is spread by region and intra-regionally, as far as access to clean fuels is different for each region.

The strength of evidence for each factor was determined based on the structured assessment of causality, using the criteria of Bradford Hill (Hill, 1992). Therefore the specificity, dose-response and experimental evidence is often difficult to assess environmental exposures and their health effects, we used the epidemiological evidence together with the emission mechanism of exposure and pollution (Smith, 2000; Zodpey, 1999). There are determined three health effects for which there is clear evidence:

Acute Lower Respiratory Infection

Chronic Obstructive Pulmonary Disease

Lung Cancer.

Children under 5 years are the highest exposure group, although levels are unknown globally (Ezzati, 2001; Saksena, 1992). About half of the world's countries cook with solid fuels, including more than 75% of people in India, China and nearby countries, 50 to 75% of people in some countries of South America and Africa. Inadequate ventilation in homes is a common factor in developing countries, which increases the exposure, especially for women and children who stay more time inside the house. In many measurements made by the WHO, has been found that concentrations of pollutants inside homes exceed by a large margin, the measurements on the outside. Multiple studies have shown a consistent relationship between the use of solid fuels and several diseases. These tests show that smoke from solid fuels causes about 35.7% of the IRA, 22% of COPD and 1.5% of cancers tracheae, bronchi and lungs (WHO, 2002).

Health intervention is considered, all that technology into their practices creates possibilities of improving the living conditions of the individual and / or community. Natural gas has become a health intervention as far as a major impact not only the household economy, but can reduce the burden of respiratory diseases in the communities in which it is implemented, especially in children, women and elderly.

## 3. Estimation of economic and epidemiological impact of household natural gas - analysis plan

To perform the study combined the following studies:

1. secondary data analysis (a systematic review of the literature) and analysis of databases provided by the Foundation Promigas, demographic data from DANE 2005 Census, and databases of economic statistical series of the Bank of the Republic.

2. Analysis of disease burden estimated from the parameters identified in the previous studies.

3. Analysis of the cost burden of illness and the estimated costs avoided then implemented the program natural gas home connections (Arredondo, 1997).

4. Cost effectiveness analysis of connections of households to service natural gas home (Drummond, 2005).

The study was conducted in two phases:

1. Estimating the burden of disease associated diseases biomass smoke (ARI and COPD) in the population covered by the project further at this stage to combine the results of the literature review;

2. Estimating the potential economic impact of the grant program's connection to the Household Natural Gas -HNG.

The estimated population data are from field research conducted in the projected 2005 population census DANE.

We carried out an analysis of cost-effectiveness of introducing natural gas house on morbidity and mortality from respiratory diseases in children and older adults, using a simple decision that assessed the burden and costs of illness in the absence and presence of HNG.

Both share the possible scenarios in which events can be found elsewhere, for example: patients with ARF and / or IRA without COPD and / or COPD. The transition from one event to another is determined by the probability of coverage and efficiency of natural gas as a health technology. For the assessment of the model assumes that:

1. persons living in homes with natural gas which are not protected against respiratory diseases and are equally likely to suffer respiratory infections caused by other causes,

2. the effective protection that natural gas generates against respiratory diseases depends also on housing conditions (ventilation of the kitchen and independence and efficiency of the stove).

The study horizon is 5 years, for both children and adults, with a discount rate of 3% for both costs and outcomes. The parameters for the model shown in the following table.

 Model Inputs Base Case Plausible Range Source - Reference Lower Limit Upper Limit Demográphics Households covered 34.137 Population covered 143.861 -- -- Current analysis Population under 5 years 11.940 -- -- Current análysis Population aged 60 14.675 -- -- Current análysis Average monthly income per household 174 137 250 Current analysis Monthly expenditure on fuels other than HNG 9,1 8,0 10,1 Current analysis Average monthly expenditure without grant HNG 4,0 3,5 4,5 Current análysis Average monthly expenditure on subsidized HNG 2,1 1,9 2,3 Current análysis Discount rate 3% Current análysis Odds (cumulative incidence) Cumulative Incidence of IRA 12,6 11,5 13,5 (Constenla, 2007) Proportion of hospitalization 30 25 35 (Alvis, 2008) Proportion of hospital mortality 4 3 5 (Alvis, 2008) Prevalence of EPOC 8,9 7,3 13,4 (Caballero, 2005) Proportion of hospitalization 30 25 35 (Alvis, 2008) Proportion of hospital mortality 8 5 11 (Alvis, 2008) Effectiveness of Gas to avoid events EffectivenessARI 62,7 55 69 Current analysis EffectivenessCOPD 26,6 22 31 Current analysis Costos (US$2005) Average cost of patients hospitalized* 886 867 1 325 (Constenla, 2007) Average cost of patients Ambulatory ARI* 93 78 221 (Constenla, 2007) Average cost of patients hospitalized COPD* 5 215 4 800 5 500 (Pérez, 2007) Average cost of patients ambulatory COPD* 500 450 550 (Pérez, 2007) Cost of installation of HNG 146 127 170 Current analysis Weighting of disability Disability weighted for ARI 0,280 (Murray, 1996) Disability weighted for COPD 0,334 (Murray, 1996) ### Table 2. * Includes direct and indirect costs ** Including installation costs and the average annual turnover of the home. Installation costs are deferred for 5 years Parameters for the economic assessment of the impact of the installation program Household Natural Gas The outcome measures considered or result of the program for the model are: The total costs of the burden of respiratory disease associated with smoke from biomass, the costs of averted disease burden by the grant program to HNG connections, where both ambulatory (medical) and ARI in children hospital and COPD in older adults, deaths from these diseases and the years of disability-adjusted life (DALYs) averted. It also uses the ratio of incremental cost-effectiveness (ICER) for comparing alternatives with and without a program using the following formula: I C E R = Connections Program Costs to HNG Avoided costs of the burden of respiratory disease associated with smoke from biomass Consequently avoided ( DALYs , deaths avoided , AVS ) E2 The ICER compares the difference in cost on the difference in health outcomes in different scenarios. For the analysis of cost effectiveness of disease avoided costs are deducted from the cost of implementing the grant program and are divided between health outcomes (life expectancy gained per woman, year of life saved, deaths prevented, etc.). The costs are expressed in dollars and pesos in 2008. All future costs and benefits are discounted at an annual rate of 3%. ### 3.1. Sensitivity analysis For the sensitivity analysis using different assumptions for the parameters. Moreover, to assess the profitability of the investment is estimated Internal Rate of Return of the project assuming that: 1. all households covered by the project receive an average income between 137 and$ 250 a month,

2. the costs of the monthly averages without subsidy bill are $2.3 to 1.9, 3. the average monthly cost of the subsidy bill is$ 4.5 to 3.5,

4. all households receive a subsidy of the cost of installation HNG of $146, and 5. all households prior to the installation of the HNG, various fuels consumed by an average monthly cost between$ 10.1 and 8.0.Households were followed for 20 years and yields are assumed constant.

## 4. Burden of disease from ARI and COPD in population

In 84 localities in the absence of the facilities of HNG would occur between 6288 and 7382 outpatient cases of ARI and between two thousand five hundred and five hundred thousand hospitalizations in the 5 years of observation. This could generate between 47 and 129 deaths and between 75 thousand and 127 thousand DALYs per IRA during the period. Also be presented between 5 and 9 thousand cases of outpatient visits for COPD and hospitalizations between 1200 and 3152, just as would occur between 61 and 347 deaths from COPD and between 12 thousand and 35 thousand DALYs.

As shown in Table 3, the installation of Household Natural Gas avoided during the study period, about 4 thousand to 5 thousand cases of outpatient ARI and between 1200 and 2300 for COPD. In addition, about 1,200 hospitalizations avoided by IRA and 500 COPD. Also avoid death between 45 and 170 would represent about 45 thousand to 90 thousand DALYs.

## 5. Economic impact

The economic costs of the burden of disease from ARI and COPD on stage without HNG would be between US$10.7 and US$ 23.6 million. On stage with HNG these costs would be reduced by about 32%, see Table 4.

As for the incremental cost effectiveness of the HNG would be between minus 8 thousand (cost savings) and 18 thousand dollars to avoid a death, and betwen under US$16 to US$ 17 avoid a DALY. The net cost would be from under 1.4 million dollars (cost savings) and 834 thousand dollars of 2005.

 In the absence of the installation of Household Natural Gas In the presence of the installation of Household Natural Gas (ARI) Events < 5 years Base Case Lower Limit Upper Limit Base Case Lower Limit Upper Limit Outpatient cases 6.562 6.288 7.382 2.165 2.075 2.436 Hospitalizations 1.969 1.572 2.584 650 519 853 Deaths 79 47 129 26 16 43 DALYs 96.049 75.697 127.723 31.696 24.980 42.149 (COPD) Events "/ 60 years Outpatient cases 6.049 4.906 9.006 4.476 3.631 6.664 Hospitalizations 1.815 1.227 3.152 1.343 908 2.332 Deaths 145 61 347 107 45 257 DALYs 19.764 12.822 35.711 14.625 9.488 26.426 Total avoided events Outpatient cases avoided of ARI 4.068 3.899 4.577 Hospitalizations avoided for ARI 1.220 975 1.602 Deaths avoided for ARI 49 29 80 DALYs avoided for ARI 59.550 46.932 79.188 Outpatient cases avoided of COPD 1.573 1.276 2.341 Hospitalizations avoided for COPD 472 319 820 COPD Deaths 38 16 90 COPD AVAD avoided 5.139 3.334 9.285

### Table 3.

Burden of disease in the localities. Colombia 2008

 In the absence of the installationof Household Natural Gas In the presence of the installation of Household Natural Gas (ARI) Events < 5 years Base Case Lower Limit Upper Limit Base Case Lower Limit Upper Limit Outpatient cases 616.810 591.109 693.911 234.388 224.622 263.686 Hospitalizations 1.748.065 1.396.024 2.294.335 664.265 530.489 871.847 Subtotal costs ARI 2.364.874 1.987.133 2.988.246 898.652 755.111 1.135.533 (COPD) Events "/ 60 years Outpatient cases 3.024.324 2.453.063 4.502.883 2.238.000 1.815.267 3.332.133 Hospitalizations 9.279.836 6.272.482 16.119.419 6.867.079 4.641.637 11.928.370 Subtotal costs COPD 12.304.160 8.725.545 20.622.302 9.105.079 6.456.903 15.260.503 Total Cost Burden 14.669.035 10.712.678 23.610.547 10.003.731 7.212.014 16.396.037 Total costos avoided by the project 4.665.304 3.500.664 7.214.511 Total installation costs of GND 4.984.002 4.335.399 5.803.290 Cost/Deaths avoided for the period 3.682 -8.289 18.473 Cost / DALY avoided for the period 5 17 -16 Total neto costs for the period 318.698 -1.411.221 834.735

### Table 4.

Costs of Burden of disease in the localities. Colombia 2008

Other benefits generated by the HNG connection to households are the savings that are generated by stop using different fuel HNG which is more than twice as costly as paying the monthly bill in the event that households do not receive service subsidies from the State. In the scenario where households receive the state subsidy of these costs can be up to 4 times what the household pays each month for the service. If we assume that these households maintained this condition for about 20 years, it is possible to evaluate returns on those savings can generate the initial investment by the donor (grant connect HNG).

 Ítems Average Lower Limit Upper Limit Total household income 1.096.087.341,3 865.834.808,4 1.569.325.590,3 Spending on different fuel to GND 57.009.359,7 50.367.234,2 63.652.387,1 GND spending without subsidy 25.109.209,4 21.970.558,3 28.247.860,6 GND spending with subsidy 13.182.335,0 11.926.874,5 14.437.795,4 State subsidies 11.926.874,5 10.043.683,8 13.810.065,2 Savings without subsidies 31.900.150,3 28.396.676,0 35.404.526,5 Savings with subsidies 43.827.024,8 38.440.359,8 49.214.591,7 Internal Rate of Return without subsidies 42% 37% 46% Internal Rate of Return without subsidies 57% 50% 64%

### Table 5.

Financial return of the project for households for 20 years. Colombia 2008

Adding these savings to the costs avoided by the impact of the HNG on the incidence of respiratory diseases, we can assess the IRR of the project from the perspective of the donor, assuming that their interest is the achievement of maximum benefit to each household subsidized. As shown in Figure 3 the IRR is positive in both scenarios (with and without subsidies) as low as 44% during the first five years and a maximum of 78% if the period of observation is 20 years, this scenario without the subsidy cost of the bill (consumer subsidy). These numbers vary in the same scenario with allowance for consumption of between 65% and 96% when we evaluated the project to 20 years.

## 6. Sensitivity analysis of the results

As shown in Figure 4, a sensitivity analysis in a way to display the variables that have the greatest impact incremental effect on the cost of connecting homes to the HNG are:

1. the prevalence of COPD,

2. the costs of HNG installation,

3. the effectiveness of the HNG to impact the prevalence of COPD,

4. the proportion of hospitalizations for COPD and

5. the average costs of outpatient and hospitalization ARI.

In this regard, the decision to subsidize the costs of installing the HNG in poor households, allowing for an intervening variable of greatest impact for the evaluation of benefits of installing.

## 7. Conclusion

According to the DANE census of 2005 in Colombia were 9.74 million households of which 3.92 million (40.3%) accessed the service of HNG. For the fourth quarter of 2008 the Ministry of Mines and Energy of Colombia reported 4.93 million homes connected to the HNG (Murray, 1996), which represents a growth of more than one million homes in three years and covers over 50% of all households. These households are concentrated in 462 locations in about 350 municipalities in 22 of the 33 departments in the country. Of these households, 55% belong to strata 1 and 2 (Murray, 1996). Since according to the quality of life survey 2003 (Alzate, 2006) 95.5% of rural households in Colombia belong to the socioeconomic strata 1 and 2, we can say that the coverage in the poorest and most vulnerable populations are not yet adequate.

On the other hand, this demonstrated the increased risk of ARI, COPD and lung cancer in those households who cook with biofuels (Norman, 2007). In our study, the limited information, only measure the disease burden of ARI and COPD which assumes an underestimation of the protective effects of GND, for example, about lung cancer. However, as shown, assuming the WHO criteria (WHO, 2001), the GND is a highly cost effective technology and thus its incorporation into benefits for the social development of poor and marginalized communities, is beyond dispute.

Thus, this study is a good estimator of the potential impact of universal access to GND by the poorest and most vulnerable households, which are precisely those that generate the greatest burden of disease by the pollution. This investigation provides means of support of public policy with a view to providing decision makers to mitigate or eliminate pollution as change or improve the efficiency of the stoves, fuel switching to biomass use GND generating reducing the frequency of cases of ARI, COPD and other respiratory diseases and the reorientation and improvement in the household economy (Larson, 2002).

These findings are consistent in scale, with the referenced document CONPES 3344 through 2005 which set out "guidelines for the formulation of policy on prevention and control of air pollution" (DNP, 2005) and estimated that in Colombia, According to Larsen, is generated per year 6 000 deaths, 7 400 new cases of chronic bronchitis (COPD), 13 000 hospitalizations and 255 000 visits to emergency rooms, with costs between 230 and 600 billion pesos in 2004 ie between about 100 and 270 million dollars.

In Colombia there are already incentives rule (Article 97 of Act 142 of 1994) which facilitate the implementation of the policy of subsidies: "In any case, the cost of household connection, attack and meter of stratas 1, 2 and 3 can be covered by the municipality, the department or the nation through budgetary support, but political will is an important input to achieve the goals for the reduction of pollution by smoke from biomass. However, given the high rates of return for this project (37% and 46% in cases that do not subsidize the consumption of the service and between 50% and 64% in the scenario with subsidies from the state) is very difficult to escape of these choices.

In summary we can state that:

1. Given the high rates of return of the project, both on stage and without subsidies subsidized consumption, for every $100 invested by the donor in the year zero of the project, households received net benefits of between 65 and 96 dollars annually. 2. Decisions to invest in subsidizing the connection of poor households to the GND are highly cost effective, to be cost saving, especially in poorer households with higher risks of respiratory diseases (health risk) and lower income (economic risk) is say the most vulnerable. So, with less than$ 20 is spent a year of life saved, which in the worst case is 8 times lower than required to save a year of life using the pneumococcal vaccine, which needs between $154 and$ 5252 in different countries of Latin America and the Caribbean (Constenla, 2007; Sinha, 2008).

3. If the state took the decision to subsidize both the connection and GND consumption by households more vulnerable, more could be close to achieving the MDGs, as is clearly demonstrated improvements in quality of life households and high social return on investment in this area, which is essential in the fight against poverty and misery in our country.

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Written By

Nelson Alvis Guzmán, Luis Alvis Estrada and Fernando De la Hoz Restrepo

Submitted: October 15th, 2010 Published: September 26th, 2011