The hidden cost of energy (on health)

We were excited to read this in the New York Times’ environment blog:

Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use,” a new report from the National Research Council, a branch of the National Academies, tries to put a dollar figure on what economists call externalities.

Calculating these sorts of things can be fantastically convoluted – remember that report earlier this year that found that planes could  be more environmentally sound than trains, sort of (taking into account occupancy rates, driving to meet the train, and manufacturing rail carriages and so on). So, information on energy externalities is good.  But then came this:

The study, however, comes with a major caveat: it did not look at the impact of energy on climate change and ecosystems, or at rising food prices and the risks to national security.

So what does it look at? The report costs a bunch of money but the executive summary describes it thus:

In particular, we evaluated effects related to emissions of particulate matter (PM), sulfur dioxide (SO2), and oxides of nitrogen (NOx), which form criteria air pollutants.We monetized effects of those pollutants on human health, grain crop and timber yields, building materials, recreation, and visibility of outdoor vistas. Health damages, which include premature mortality and morbidity (such as chronic bronchitis and asthma), constituted the vast majority of monetized damages, with premature mortality being the single largest health-damage category.

Coal-fired plants caused $62bn worth of damage in 2005, while natural gas plants caused $740m worth. On a per kilowatt hour basis, coal was 3.2 cents, compared to natural gas-fired plants at 0.16 cents.  And that’s mostly health problems, and mostly death. Hmm.

But wait, there’s more:

After ranking all of the plants according to their damages, we found that the 50% of plants with the lowest damages together produced 25% of the net generation of electricity but accounted for only 12% of the damages. On the other hand, the 10% of plants with the highest damages, which also produced 25% of net generation, accounted for 43% of the damages. Figure S-1 shows the distribution of damages among coal-fired plants.

So big coal-fired plants produce lots more power, but they also produce, on a per-kilowatt basis, quite a lot more death. And there was a similar skew for natural gas-fired plants.

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