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Journal of Solar Energy Engineering | Volume 138 | Issue 4 | Review Article
Review Article

External Costs of Energy: How Much Is Clean Energy Worth?

[+] Author and Article Information
Ari Rabl

Ecole des Mines,
Paris 75006, France
e-mail: ari.rabl@gmail.com

Joseph V. Spadaro

Basque Center for Climate Change,
Bilbao 48007, Spain
e-mail: Joseph.Spadaro@aol.com

1Here, we use the term damage cost rather than external cost, to avoid possible ambiguities about the extent to which a damage cost is already internalized.

2We cite the methodology and results of the NEEDS (2004–2008) and CASES (2006–2008) phases of ExternE. For the emissions data per kWh of electricity, we use the numbers of the data CD that is included in Ref. [12]. They can also be downloaded from http://www.feem-project.net/cases/ (although in the latter, some numbers have changed since the data CD in the book).

Contributed by the Solar Energy Division of ASME for publication in the JOURNAL OF SOLAR ENERGY ENGINEERING: INCLUDING WIND ENERGY AND BUILDING ENERGY CONSERVATION. Manuscript received February 26, 2016; final manuscript received March 24, 2016; published online May 25, 2016. Editor: Robert F. Boehm.

J. Sol. Energy Eng 138(4), 040801 (May 25, 2016) (8 pages) Paper No: SOL-16-1096; doi: 10.1115/1.4033596 History: Received February 26, 2016; Revised March 24, 2016
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This review describes the methodology for the analysis of environmental damages and presents key results obtained by the external costs of energy (ExternE) projects of the European Commission as well as analogous work in the U.S. The classical air pollutants (PM, NOx, SO2, and O3) due to the combustion of fossil fuels cause significant damage costs. The costs of global warming from the emission of greenhouse gases are also large. We show results for the damage cost per kilogram of emitted pollutant for typical conditions in Europe; they are based on the last version of ExternE (published in 2008), but with a major upward adjustment of the monetary values. We also show results that have been published in the U.S. Combined with the emissions data per kilowatt hour, they yield the damage costs of electric power. For the choice between different power technologies, one should take into account not only the emissions from the power plant but also from the entire fuel chain, using life cycle assessment (LCA) inventories. The damage costs of fossil fuels are much higher than most renewable energy sources. The results provide crucial input for the formulation of rational environmental policies, for example, the appropriate level of pollution taxes and the promotion of cleaner technologies.
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References

1
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2
EUR, 1995, “ ExternE: Externalities of Energy. Vol. 2: Methodology,” European Commission, Directorate-General XII, Science Research and Development, Luxembourg, EUR No. 16521.
3
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13
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26
Spadaro, J. V. , and Rabl, A. , 2008, “ Estimating the Uncertainty of Damage Costs of Pollution: A Simple Transparent Method and Typical Results,” Environ. Impact Assess. Rev., 28(2), pp. 166–183. [CrossRef]
27
Frischknecht, R. , Jungbluth, N. , Althaus, H.-J. , Doka, G. , Dones, R. , Hischier, R. , Hellweg, S. , Nemecek, T. , Rebitzer, G. , and Spielmann, M. , 2007, “ Overview and Methodology,” Swiss Centre for Life Cycle Inventories, Dübendorf, Switzerland, Final Report ecoinvent data v2.0, No. 1.
28
Rabl, A. , and Rabl, V. A. , 2013, “ External Costs of Nuclear: Greater or Less Than the Alternatives?,” Energy Policy, 57, pp. 575–584. [CrossRef]
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Ontario Hydro, 1993, “ Full Cost Accounting for Decision Making,” Ontario Hydro, Toronto, ON, Canada.
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Rabl, A. , Spadaro, J. V. , and Holland, M. , 2014, How Much is Clean Air Worth: Calculating the Benefits of Pollution Control, Cambridge University Press, Cambridge, UK.
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Muller, N. , 2013, personal communication.
33
Rabl, A. , Spadaro, J. V. , and van der Zwaan, B. , 2005, “ Uncertainty of Pollution Damage Cost Estimates: To What Extent Does It Matter?,” Environ. Sci. Technol., 39(2), pp. 399–408. [CrossRef] [PubMed]

Figures

Grahic Jump Location
Fig. 1

Typical damage costs in €2013/kg of pollutant in the 27 member countries of the European Union (EU27), with atmospheric modeling and ERFs of ExternE [12], but updated with the monetary values of this paper. The scale is logarithmic, and the error bars show 68% confidence intervals. h = stack height.

+Typical damage costs in €2013/kg of pollutant in the 27 member countries of the European Union (EU27), with atmospheric modeling and ERFs of ExternE [12], but updated with the monetary values of this paper. The scale is logarithmic, and the error bars show 68% confidence intervals. h = stack height.
View Large  |  Save Figure  |  Download Slide (.ppt)
Typical damage costs in €2013/kg of pollutant in the 27 member countries of the European Union (EU27), with atmospheric modeling and ERFs of ExternE [12], but updated with the monetary values of this paper. The scale is logarithmic, and the error bars show 68% confidence intervals. h = stack height.
Grahic Jump Location
Fig. 2

Selected results for the damage costs of power technologies vintage 2010 in the EU27, in €cent2013/kWh. For the second version of nuclear, the estimate of Rabl and Rabl [28] for accident and waste has been added. For wind, the first version is for a combination wind + NGCC for base load, the second version is for wind with storage (but without damage costs of storage). Data of ExternE [12] updated with the monetary values of this paper.

+Selected results for the damage costs of power technologies vintage 2010 in the EU27, in €cent2013/kWh. For the second version of nuclear, the estimate of Rabl and Rabl [28] for accident and waste has been added. For wind, the first version is for a combination wind + NGCC for base load, the second version is for wind with storage (but without damage costs of storage). Data of ExternE [12] updated with the monetary values of this paper.
View Large  |  Save Figure  |  Download Slide (.ppt)
Selected results for the damage costs of power technologies vintage 2010 in the EU27, in €cent2013/kWh. For the second version of nuclear, the estimate of Rabl and Rabl [28] for accident and waste has been added. For wind, the first version is for a combination wind + NGCC for base load, the second version is for wind with storage (but without damage costs of storage). Data of ExternE [12] updated with the monetary values of this paper.
Grahic Jump Location
Fig. 3

Breakdown of the damage costs of Fig. 2 by stages of fuel chain, in €cent2013/kWh. Data of ExternE [12], but updated with the monetary values of this paper.

+Breakdown of the damage costs of Fig. 2 by stages of fuel chain, in €cent2013/kWh. Data of ExternE [12], but updated with the monetary values of this paper.
View Large  |  Save Figure  |  Download Slide (.ppt)
Breakdown of the damage costs of Fig. 2 by stages of fuel chain, in €cent2013/kWh. Data of ExternE [12], but updated with the monetary values of this paper.
Grahic Jump Location
Fig. 4

Results of NRC [16] for damage costs of electric power in the U.S., in ¢/kWh. For illustrative purposes, the study indicates climate damage with a hypothetical $30/tCO2eq.

+Results of NRC [16] for damage costs of electric power in the U.S., in ¢/kWh. For illustrative purposes, the study indicates climate damage with a hypothetical $30/tCO2eq.
View Large  |  Save Figure  |  Download Slide (.ppt)
Results of NRC [16] for damage costs of electric power in the U.S., in ¢/kWh. For illustrative purposes, the study indicates climate damage with a hypothetical $30/tCO2eq.

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