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The Charleston Gazette (West Virginia)

National Academy Blockbuster: Coal’s Huge Hidden Costs

Report: Pollution from Burning Coal Costs $62 billion a year

Ken Ward Jr.

Coal industry lobbyists and coal-state politicians like to remind us that coal is a relatively cheap source of energy.

But in a major new report out today, the National Academy of Sciences details some of the huge "hidden costs" of coal: More than $62 billion a year in "external damages" - that is, premature deaths from air pollution.

A National Academy news release is available here and the report itself here.

Those coal costs are part of the $120 billion in "hidden costs" that
the academy's National Research Council documented in its report,
"Hidden Costs of Energy: Unpriced Consequences of Energy Production and

What are they talking about? The press release explains:

Requested by Congress, the report
assesses what economists call external effects caused by various energy
sources over their entire life cycle - for example, not only the
pollution generated when gasoline is used to run a car but also the
pollution created by extracting and refining oil and transporting fuel
to gas stations.  Because these effects are not reflected in energy
prices, government, businesses and consumers may not realize the full
impact of their choices.  When such market failures occur, a case can
be made for government interventions - such as regulations, taxes or
tradable permits - to address these external costs, the report says. 

The study focused on trying to put a
dollar amount of the health damages associated with the emissions of
major air pollutants - sulfur dioxide, nitrogen oxides, ozone and
particulate matter - from various aspects of the nation's energy
production and use.

During a conference call with reporters, the study team chairman,
Carnegie Mellon University President Jared L. Cohon, noted that in the
electrical sector, coal provides nearly half of the nation's
electricity - but accounted for nearly all of that sector's hidden

In 2005, the total annual "external damages" from these air
pollutant created by burning coal at 406 power plants were about $62
billion. That amounts to about 3.2 cents for every kilowatt-hour of
energy produced. For comparison purposes, the average U.S. cost of electricity for consumers is 12 cents per kilowatt-hour.  The National Research Council report added:

... The differences among plants were wide - the 5th
and 95th percentiles of the distribution were $8.7 million and $575
million, respectively. After ranking all of the plants according to
their damages, we found that the 50 percent of plants with the lowest
damages together produced 25 percent of the net generation of
electricity but accounted for only 12 percent of the damages.
the other hand, the 10 percent of plants with the highest damages,
which also produced 25 percent of net generation, accounted for 43
percent of the damages.


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What about other fuels?

The report press release says:

Burning natural gas generated far less damage than coal, both overall and per kilowatt-hour of electricity generated.


The life-cycle damages of wind power, which produces
just over 1 percent of U.S. electricity but has large growth potential,
are small compared with those from coal and natural gas.

It's important to note that the report found that coal's hidden
costs should go down significantly, to about 1.7 cents per kilowatt
hour, by 2030, in large part because of reductions in air pollution as
plants add more emissions reductions equipment.

But, the study did not try to provide new estimates of the hidden
costs related to coal's greenhouse gas emissions. Instead, it simply
cited previous projections which put those costs at ranging between 01.
cents to 10 cents per kilowatt-hour.

And as study team member Maureen L. Cropper of the University of
Maryland pointed out, this new report did not attempt to examine all
sorts of other "up-stream" impacts of coal, such as water pollution or
damage from mountaintop removal coal-mining:

We didn't really quantify or monetize those
anywhere. So, for example, if you take the waste from a scrubber and
dump it in the Monongahela River, we didn't include that.

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