Friday, September 30, 2011

externalities associated with electricity generation

Externalities--the costs that are not accounted for when a product is priced--are something discussed in both The Failure of Environmental Education and Eating Our Way to Civility.  Here's a recent paper that shows that coal-fired electricity generation produces greater externalities than some other energy generation techniques.  Muller, Nicholas Z., Robert Mendelsohn, and William Nordhaus. 2011. "Environmental Accounting for Pollution in the United States Economy." American Economic Review, 101(5): 1649–75.  This study presents a framework to include environmental externalities into a system of national accounts. The paper estimates the air pollution damages for each industry in the United States. An integrated-assessment model quantifies the marginal damages of air pollution emissions for the US which are multiplied times the quantity of emissions by industry to compute gross damages. Solid waste combustion, sewage treatment, stone quarrying, marinas, and oil and coal-fired power plants have air pollution damages larger than their value added. The largest industrial contributor to external costs is coal-fired electric generation, whose damages range from 0.8 to 5.6 times value added.






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