As noted above, more highly improved stove technologies and modern fuels have lower total social costs for some but not all plausible values of key underlying parameters. For LPG in particular, the improvement in energy efficiency relative to the traditional stove is key, but so is the baseline incidence of acute respiratory illness. Much of the potential benefit from LPG comes from reduced health impacts. Consequently, if the incidence of respiratory illness is relatively low in the baseline (e.g. due to high ventilation or cooking outdoors), the health benefits from adopting these costlier technologies will be lower; if households do not put a high value on respiratory health risks, the perceived health benefits will be lower. Finally, as one would expect, the energy efficiency of electric stoves and the cost of electricity are significant factors for that technology.

Since more highly improved stoves and modern fuels are likely to remain costlier than less advanced alternatives in a number of locations for some time to come, one key question for increasing the adoption and use of more modern cooking methods is the size of externality costs and how they might be priced into actual transactions. One way this could be done would be through packaging a stove and/or energy source improvement program to include “carbon finance” – payments by third parties reflecting the avoided greenhouse gas emissions of the program. This is already a possibility under existing climate change mitigation mechanisms, such as REDD+. For example, the firm DelAgua Health has distributed more than 100,000 EcoZoom stoves in Rwanda (http://www.delagua.org/projects/rwanda) and Project Surya (www.projectsurya.org) is an interesting example of a nonprofit project relying on carbon finance.

Nevertheless, possibilities are relatively limited as demonstrated by the current low prices of CO2 in voluntary markets. Extending the scope for such transactions requires not only solid information on the avoided emissions – including solid information on stove and fuel use patterns, not just stoves distributed in the field – but also the evolution of a mechanism for cross-border financing of greenhouse gas emissions reductions under the 2015 Paris Agreement.

Another mechanism can be domestically provided subsidies for improved stoves and modern fuels that reflect the avoided health costs from less clean cooking methods. Calculating the value of such avoided costs requires information on both new stove and fuel use patterns, and on baseline exposure to local pollutants. Beyond the calculations, however, the approach requires strong political commitment to use the public budget to reduce the burden of disease from traditional cooking.

# **Appendix:  Numerical Illustrations of Social Cost Calculations: Cases from Senegal**

# **_Traditional Versus Improved Wood Stoves_**

Bensch and Peters (2015) present results of a randomized controlled trial field experiment involving a wood-fueled ICS in rural Senegal. In this approach, a random sample of rural households was generated, and then a random subset of those households received an ICS. Data were obtained from controlled cooking trials, measurement of wood use in actual practice (to try to account for actual frequency of use of the ICS), and responses to follow-up questions about respiratory illness and eye problems from exposure to cooking smoke. The baseline was a traditional three-stone stove, though some households in the sample also used a traditional (unimproved) metal stove (and this was accounted for in the statistical analysis).

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