Similar to second hand smoke, pollutants emitted from incense burning in a close area are clearly dangerous to your health. Particulate matters (PM), and some of volatile organic compounds, ketones, xylenes, and ambrette, aldehydes, polycyclic aromatic hydrocarbons, diethylphthalate (DEP) are toxic to the lung and produce allergies in the skin and eyes. It is relatively difficult to directly study the effect of incense smoke pollutants on health, several epidemiological studies have provided evidence that they do cause health problems and raise cancer concerns.

There are various forms of incenses, including incense sticks, joss sticks, incense cones, coils, powders, rope, rocks / charcoal, and smudge bundles. A typical composition of stick incense consists of 21% (by weight) of herbal and wood powder, 35% of fragrance material, 11% of adhesive powder, and 33% of bamboo stick. It will take from 50 to 90 minutes to burn a stick of incense. When incense is burning, it emits smoke (fumes) containing particulate matter (PM), gas products and other organic compounds. Once the incense coating section has burned completely, the burning extinguishes itself at the tip of the bare bamboo part of the stick. The gas products from burning incense include CO, CO2, NO2, SO2, and others. Incense burning also produces volatile organic compounds, such as benzene, toluene, and xylenes, as well as aldehydes and polycyclic aromatic hydrocarbons (PAHs), which mostly are absorbed on particle matter.

It is difficult to say which respiratory ailments are specifically the result of incense exposure since the data on this is limited. It is clear that the smoke produced does contain harmful compounds. Epidemiological studies have reported associations between air particulate matter (especially the fine particles) and several acute health effects, including mortality, hospital admissions,asthma symptoms, and lung dysfunction. The USEPA 2004 Air Quality Criteria for Particulate Matter conclusion states that Particles in the range 10 to 2.5 ?m were associated with respiratory morbidity. Smaller particles are even worse for the lungs because they get farther into the small airways and alveoli of the lungs where they may cause damage. The burning of incense could generate large quantities of Particulate Matter. On average, incense produces Particulate Matter greater than 45 mg/g burned, as compared to 10 mg/g burned for the cigarettes.

Other gases in incense are also not good for your respiratory health:

Carbon monoxide is a colorless, odorless, and tasteless. It is poisonous and it is formed by partial combustion of organic compounds, such as incense, hydrocarbons, wood,cigarette, and fossil fuels. Carbon monoxide combines with hemoglobin more tightly than oxygen, by a factor of 200-300. Carbon monoxide reduces the blood’s ability to transport oxygen. Inhaling Carbon monoxide in low concentrations will result in headaches, dizziness, weakness and nausea, while high concentrations can kill.

Sulfur dioxide (SO2) and nitrogen dioxide (NO2) — Health effects of exposures to sulfur dioxide, and nitrogen dioxide can include reduced work capacity, aggravation of existing cardiovascular diseases, effects on pulmonary function, respiratory illnesses, lung irritation, and alterations in the lung’s defense system.

Volatile organic compounds (VOCs) are chemicals that have low boiling points and therefore evaporate easily at room temperature. Common VOCs include benzene, toluene, xylenes, and isoprene. Acute symptoms of VOC exposures are: eye irritation/watering, nose irritation, throat irritation, headaches, nausea/vomiting, dizziness, and asthma exacerbation. Chronic symptoms of VOC exposure are: cancer, liver damage, kidney damage, central nervous system damage. Incense burning generates CO, isoprene and benzene.

Aldehydes and Ketones—-Most incense materials produce aldehydes and ketones during combustion. Burning incense is also known to generate aerosols and formaldehyde. Lin and Tang investigated the content of particulates in Chinese incense smoke and found that acrolein, formaldehyde and acetaldehyde were predominantly adsorbed on smaller particulates, especially those particulates with size of 3.3-4.7 microns and 2.1-3.3 microns. The small particles are the ones that get furthest into the lungs. Aldehydes are volatile organic compounds typically characterized by their irritating properties. In addition to irritating skin, eyes and the upper respiratory tract, aldehydes also affect nasal mucous membranes and oral passages, producing a burning sensation, bronchial constriction, choking, and coughing. Exposures to formaldehyde are of concern because formaldehyde is a potent sensory irritant and is classified as a probable human carcinogen. Epidemiological studies have correlated wood dust and formaldehyde with nasal cancer.
Diethylphthalate (DEP) –In India, diethylphthalate is used extensively in the incense stick industry as a binder of perfumes. It can be emitted into the air during incense burning. Eggert and Hansen reported that DEP emission from various incense could be as high as 16,365 mcg/m3. Diethylphthalate (DEP), is a phthalate compound used as a plasticizer and a detergent base, is a suspected carcinogen and probable hormone disrupting compound implicated in fertility problems and DNA damage in sperm. Diethylphthalate (DEP) alone leads to severe impairment of lipid metabolism coupled with toxic injury to the liver.
More of the details about incense are described in the article: