Improving domestic space heating: a cost benefit analysis based on a randomised community trial

Abstract

Despite New Zealand's temperate climate, New Zealand homes are generally cold, primarily as the result of a historical lack of insulation. Many New Zealand households also suffer fuel poverty and have inadequate domestic space heating, including unflued gas heaters which emit harmful gases directly into the indoor environment. There is a large body of evidence correlating improved domestic space heating and respiratory health outcomes such as asthma. There is also evidence of connections between improved domestic space heating and mental health, COPD, rheumatism, ischaemic heart disease and strokes. Improvements in domestic space heating have the potential to improve occupant health via increased temperatures and reduced dampness, mould, and harmful emissions and also have the potential to reduce household energy bills and CO2 emissions. This potential was the basis of the Housing, Heating and Health Study, a randomised community trial carried out by He Kainga Oranga, the Housing and Health Research Programme of the School of Medicine and Health Sciences of the University of Otago, Wellington, which involved the installation of energy efficient and healthy heaters in the dwellings of families who used ineffective heating and included an asthmatic child aged seven to twelve. This thesis is a cost benefit analysis based primarily on energy use and health outcome related data from the Housing, Heating and Health Study. It concludes that the outcome of the intervention was equivocal from a societal perspective, due in part to limitations of the data and analysis, with a negative "net present value" (NPV) for the baseline scenario, but positive NPVs for a number of alternative scenarios and a strong suggestion that if the full benefits of the intervention were captured that the NPV of the intervention is likely to be positive. Predicted changes to the New Zealand economy resulting from climate change mitigation policies and increasing real energy costs also increase the likelihood that similar future interventions may have a positive NPV.