The Economic Cost of Air Pollution in the U

Emission Prices Are More Efficient than Emission Caps

If policymakers had complete and accurate information on both the costs and benefits of achieving various limits on emissions, they could achieve the limit that best balanced costs and benefits using either an emission price or an emission cap. With full information, policymakers could set the price or cap to the level at which the cost of the last reduction was equal to the benefit from that reduction. However, neither the costs nor the benefits are known with certainty. For that reason, the best policymakers can do is to choose the policy instrument that is most likely to minimize the cost of making a "wrong" choice. Choosing policies that are too stringent (by setting too high a price or too tight a cap) would result in excess costs that are not justified by their benefits. Alternatively, choosing policies that are too lenient (by setting too low a price or too loose a cap) would result in forgone benefits that would have outweighed the cost of obtaining them.

Analysts generally conclude that uncertainty about the cost of controlling carbon dioxide emissions makes price instruments preferable to quantity instruments because they are much more likely to minimize the adverse consequences (excess costs or forgone benefits) of choosing the wrong level of control.⁽¹⁾ The price approach would motivate people to control emissions up to the point where the cost of doing so was equal to the emission price. If actual costs were less than, or greater than, anticipated, people would limit emissions more than, or less than, policymakers projected. However, emissions would be reduced up to the point at which the cost of doing so was equal to the expected benefits, provided that the emission price was set equal to the expected benefits of reducing a ton of carbon dioxide emissions. In contrast, a strict cap on emissions could result in actual costs that were far greater (or less) than expected and that therefore exceeded, or fell below, the expected benefits.

The advantages of a price-based approach stem mainly from the fact that the cost of limiting a ton of emissions is expected to rise as the limit becomes more stringent, while the expected benefit of each ton of carbon reduced is roughly constant across the range of potential emission limitations in a given year. That constancy occurs because climate effects are driven by the total amount of carbon dioxide in the atmosphere, and emissions in any given year are a small portion of that total. Further, reductions in any given year probably would fall considerably short of total baseline emissions for that year.

Northeastern U.S. States Regional Greenhouse Gas Plan

Seven states signed the plan in December 2005 to create a cap and trade CO2 emissions market called the Regional Greenhouse Gas Initiative. The states -- New York, New Jersey, Vermont, New Hampshire, Maine, Connecticut and Delaware -- hope to cap emissions from power plants at 1990 levels of about 121 million tons of CO2 through 2014 and then reduce it 10 percent below that level in 2018. Maryland has since also voted to join the group.
Power plants in the U.S. Northeast that face rules to cut carbon dioxide emissions would be allowed to save costs by methods such as planting trees and tapping landfills for methane, according to a draft plan by Northeastern states who have signed the country's first regional greenhouse gas plan.

In the cap and trade market the RGGI has developed, the states would hand power plants CO2 emissions targets. If the plants cut emissions under those limits -- by switching from coal to cleaner-burning natural gas for example -- they would earn credits. The RGGI draft model on Thursday said the plan would cost homeowners about $3 to $16 more per average home in 2015, a reduction from the group's earlier predictions.

The RGGI estimates its CO2 allowances would cost far less, and it has set up "safety valves" if prices get too high. If the price of the emissions allowances rose above set limits, power plants could get credit for reducing emissions by other methods outside the RGGI region. Methods include planting trees or capturing and burning methane gas at landfills. Methane is about 20 times more potent a greenhouse gas than carbon dioxide.

Toxic Metals

2. The U.S. Center for Disease Control ranks toxic metals as the number one environmental health threat to children, adversely affecting millions of children in the U.S. each year(2,3, 9-9.7,42) and thousands in Florida. EPA and CDC indicate that over 3 million children have their health significantly adversely affected or learning ability significantly adversely affected by lead in drinking water, mercury in fish, cadmium in shellfish, or other toxic metals from emissions(2,3,8.5-9.7,37). Toxic metals are also accumulating in the environment, food chain, and people at increasing levels and are one of the largest health problems affecting the U.S. and other industrial countries (9.7,42). According to an EPA assessment, the toxic metals lead, mercury, cadmium, chromium, and nickel are all ranked in the top 12 toxics having the most adverse health effects on the U.S. public based on toxicity and current exposure levels(9.5,9). Aluminum, mercury, and cadmium have been found to be accumulating in the brain and kidneys of large numbers of people exposed to metallic pollutants and toxic metals in the food chain and drinking water(2,9.7,42)- causing widespread serious neurological and kidney problems. As later referenced, emissions are the main source of mercury in lakes and streams and acid pollutants are a major factor in the level of mercury or other toxic metals in fish and of lead or cadmium in drinking water(42,37,8).

A Midwest Research Institute study estimated acid deposition damage to paint surfaces as over $35 billion per year(29). Scholle (31) summarizes a study by F.H. Haynie in which Haynie estimates the damage to zinc coated transmission lines as between .0028 mills and .0132 mills per kwh transmitted. A study published in the journal: Material Performance, estimated damage to metal buildings and structures at over $2 billion per year(32).

Health Effects of Air Pollution

9. New medical studies have found the health damage from small particulates, including soot and sulfates, to be much more serious than previously thought- affecting the health of large number of people throughout the U.S.(49-49.8,70) Persons living in areas that exceed Federal Standards for particulates on 42 or more days per year had a much higher risk of respiratory disease, with a 33% chance of bronchitis and a 74% greater risk of asthma(49.6). The cost of the air pollution related health damage due to air pollution beyond the Federal standards in a 4 county area including Los Angeles was estimated to be over $9.4 billion per year(9.8). Adverse effects were also significant in areas not exceeding Federal standards. An EPA study estimates that approx. 60,000 people per year die in the U.S. from lung damage caused by breathing particulates(31.2). The study found a roughly 6% increase in deaths for every 50 gram increase in small particulates per cubic meter of air. Air pollution is a serious problem worldwide affecting children the most. Respiratory problems is now the number one cause of death among children(68). Particulate pollution from cars, power plants and factories leads to development of heart disease, with heart effects being even more significant than respiratory effects(70). Exposure to tiny-particle pollution can actually lead to ischemic heart disease, which causes heart attacks, as well as irregular heart rhythms, heart failure and cardiac arrest. Such PM2.5 pollution provoke low-grade pulmonary inflammation, accelerating development of atherosclerosis — a leading cause of heart disease — and altering heart function.

10. Studies have found that acid pollutants, especially nitrogen oxides combine with volatile organic compounds to form smog which affects most urban areas and has been found to have serious health effects. In addition to direct health effects, such ozone has been found to infiltrate buildings and homes and to promote greatly increased volatile organic compound emissions from carpets and carpet backings. Among the VOC emissions found at commonly found ozone levels (at 28 to 44 parts per billion) were increased levels of suspected carcinogens such as formaldehyde and acetaldehyde, which increased by factors of 3 and 20 respectively(31.5).

11. There has been a dramatic increase in lung related illnesses and children’s asthma(31.2,41,49). Annual asthma deaths have increased 77% in the last 10 years. The percent of Americans with Asthma increased 33% during this period, and hospitalization for children under 15 doubled. A recent Univ. of Southern California study found children in the heavy smog/ozone area of Los Angeles had 6 to 17 percent less lung capacity than those in less polluted areas. Autopsies of adolescent victims of motor vehicle accidents in Los "Angeles found 80% had "notable lung abnormalities" and 27 % had severe lesions in lung areas known to be affected by noxious substances(23.5,67,68). Asthma was much more prevalent and more serious is such areas of higher air pollution(68).

12. Nitrates in drinking water have been found to cause learning disabilities, birth defects, brain cancer, esophageal cancer, stomach cancer, etc.(21.5). As previously noted atmospheric deposition is a major source of nitrates in reservoirs and water bodies. Both sulfur and nitrogen oxides have been found to cause lung disease, as well as being precursors of ozone/smog(41).

13. Both sulfur and nitrogen oxides have been found to cause lung disease, as well as being precursors of ozone/smog(41,49.2). An American Lung Association Study in 1988 estimated health costs and lost work productivity due to acid rain pollutants at over $40 billion per year(22). A study commissioned by Los Angeles officials found that air pollution related health costs and lost work productivity in the Los Angeles area are over $10 billion per year(18). A study of fetal deaths in urban areas found that air pollution, especially nitrogen oxide(NO2) is a major factor in spontaneous abortions/fetal deaths due to hypoxia(insufficient oxygen). In the study NO2 pollution appeared to be responsible for about 20% of fetal deaths(67).

13.3. Health Effects from Living Near an Incinerator: A UK study found that there was an increased risk of lethal congenital anomaly such as spina bifida and heart defects for women living near incinerators(72a). Two other studies (72bc) showed a significant increase in the risk of sarcoma, correlated both with the level and the length of environmental modeled exposure to dioxin-like substances. The risk excess is also evident in females, and, for both sexes taken together, for cancers of the connective and other soft tissue. Another study found that exposure to high levels of dioxin was correlated to significantly lower boy to girl birth ratio(72d). An ATSDs investigation found an increased pattern of respiratory problems in community residents living near an incinerator(72e). In addition, residents complained about irritation of the airways and poor motor coordination. Another study’s results indicated a significantly increased risk of mortality among women living in the vicinity of the incinerators compared with those living far away, for all causes, colon and breast cancer, diabetes, and cardiovascular diseases(72f).

13.5. Numerous studies have found that municipal and medical waste incinerators emit large amounts of pollutants including toxic metals, dioxins and furans, acid pollutants, and pollutants that adversely affect the ozone layer(43.5). A major study of the health related cost of MSW incinerator emissions for the U.S. Dept. of Energy estimated the cost to be approx. 5.2 cents per kwh of energy generated(26). A major study by the Bonneville Power Administration estimated an average cost for toxic emissions and ash from municipal incinerators as 11.1 cents per kwh of energy generated(46.5). These are comparable to costs developed and reviewed in (43.5).

Other Damage Cost Estimates

14. Visibility impairment due to sulfate haze impairs civilian and military air traffic, as well as the scenic view in National Parks and recreational areas. Smog/haze curtails or slows commercial, military, or private air traffic from 2% to 12 % of the time in summer(35). The National Park Service estimates tourist related losses due to visibility impairment at over $6 billion per year.

15. A recent EPA report estimated that the economic damage from sulfur dioxide emissions was between $490 to $728 per ton of emissions(36). Another EPA report estimated the cost of small particulate matter(under 10 microns) at $2400 to $9000 per ton of particulate emissions. This would yield a cost in Florida based on Florida emissions and the most conservative EPA estimate of approximately $500 million per year for sulfur dioxide emissions alone. The EPA studies and a study by Olav Holmeyer(12) for the Commission of European Communities found that the uncounted "societal cost" of unscrubbed coal power production are almost as much as the direct cost that is typically considered in

energy policy decisions. Holmeyer's estimates for the range of damage from sulfur dioxide was between .3 to 1.6 cents per kwh and for nitrogen oxides was between .35 to 1.8 cents per kwh. An assessment by the New York Public Service Commission put the societal economic cost of coal power at 1.4 cents per kwh (28).

16. "OTA's analysis of acid deposition and other transported air pollutants concludes that these substances pose substantial risks and costs to American resources." "Any program to reduce emissions significantly would require 7 to 10 years to implement, and perhaps longer for major impacts on the problem"(35).

Studies of the Economic Cost of Health and Environmental Impacts

17. Based on studies and evaluations performed by Staff of the New York Public Service Commission, the New York PSC uses a cost of 1.405 cents per kwh in policy and bidding procedures as the environmental cost of standard coal plants with a defined set of emission rates and other impacts(28). Technologies with lower emission rates or impacts get assigned proportionately lower environmental costs. Of the above total .905 cents is related to air emissions‑ with .25 cents for sulfur dioxide, .55 cents for nitrogen oxides, .005 cents for suspended

particulates, and .1 cents for carbon dioxide. Only 20 % of the full carbon dioxide estimate of .5 cents per kwh was included for official purposes due to controversy over the impacts of global warming. The other .5 cents per kwh recognized the higher land and water impacts of coal plants due to coal piles, coal handling facilities, and ash disposal.

18. The California Energy Commission staff performed a study of atmospheric pollution and abatement cost for the South Coast Air Basin in Los Angeles. Out of an estimated total external cost for coal plants of 7.85 cents per kwh, 3.53 cent was for sulfur dioxide, 3.56 cents was for nitrogen oxides, and .76 cents was for carbon dioxide(1 & 14).

19. The Wisconsin Public Service Commission and Northwest Power Planning Councils use adders of 15% and 10% respectively for environmental and health costs when comparing coal plants to conservation or alternative energy options(14).

20. A 1989 study of Schillberg for the State of California estimated a total external environmental/health cost of 2.71 cents per kwh‑‑ of which 0.31 cents was for sulfur dioxide, 0.83 cents was for nitrogen oxides, and 1.58 cents was for carbon dioxide(14).

21. Estimates of the societal cost of increased health care expenditures, environmental degradation, and lost employment due to atmospheric emissions range from $100 billion to $300 billion per year(13).

22. Even before the Persian Gulf War, the U.S. Department of Defense was spending at least $20 billion per year to safeguard oil supplies in the Persian Gulf area. This amounts to a cost of at least $20 per barrel of oil imported to the U.S. from the Middle East, and is a subsidy of a lower price of oil both in the U.S. and abroad(13). Other hidden tax credits and subsidies keep oil and gas prices low in the U.S. and encourage overuse; energy imports are the major factor in

the U.S. balance of trade deficits which have made the U.S. the worlds' greatest debtor nation. The U.S. has more tax credits and much lower taxes on fuel than our major foreign competitors.

23. A recent Pace University study of the societal costs of generating electricity commissioned by the U.S. Dept. of Energy estimated the societal cost of sulfur dioxide emissions as over $4000 per ton(26). Their estimate of the total societal cost of a wide variety of electric generating options is given in Table 1. The study also points out that 20 states have required utilities to include environmental externality costs in some manner in planning, bidding, or other resource acquisition procedures, and at least 9 more state have current formal processes considering inclusion of such cost. Table 2 combines the Pace Univ. study societal costs(4) with estimates of variable production costs for the different plant options to give estimates of total societal operating costs.

24. A study by D.L. Block of the Florida Solar Energy Center developed estimates of the direct environmental and health cost of emissions by utilities in Florida. The estimate of the composite cost of emissions was 2.0 cents per kwh(5).

Ozone Layer Depletion

25. The ozone layer over the U.S. has been found to be thinning, which is likely to have serious health and biological implications(1,31.4). There has been a resulting increase of approx. 0.5% per year in ultraviolet radiation(UV) since the mid 1980s, with an even larger increase of approx. 2% in 1992 augmented by the Mount Pinatubo volcanic eruption(7.3). Biologists indicate that the increased ultraviolet light due to ozone declines is already having significant adverse impacts on ocean plankton, coral reefs, and ocean food chains. A 1% increase in ozone in the atmosphere has been found to lead to an approx. 2% to 3% increase in skin cancer, as well as to damage of the immune system, crops, plants, and plankton. According to the Skin Cancer Foundation of New York, the number of cases of the most serious type of skin cancer, melanoma, has risen by over 6% per year over the last decade, and other types of skin cancer are also increasing(19.5). UV exposure also adversely affects the immune system, and has been documented to be related to immune system diseases and genetic or metabolic problems such as herpes simplex, tuberculosis, leprosy, lupus, etc. Higher doses of UVB appear to have even more widespread adverse effects on plants, animal, and ecosystems. Frogs and amphibians are disappearing all over the world and the increase in ultraviolet radiation(B) has been found to be a major factor by damaging frog eggs. Forests have also been found to be adversely affected. UVB also damages polymers used in building materials, paints, packaging, etc(7.5).

The ozone layer declined globally over 4 % between 1979 and 1993, and even more over northern U.S. latitudes. Satellite measurements by Nimbus-7 in 1992 and 1993 show levels reached record lows over much of the earth and are declined much more rapidly in 1992 than ever before, perhaps aided by aerosols from the Mt. Pinatubo eruption(1). The global decline in 1992 alone was over 2 %. The Antarctic ozone hole in 2003 was the second largest ever observed, say scientists from three U.S. federal agencies. Researchers from the National Oceanic and Atmospheric Administration (NOAA), the National Aeronautics and Space administration (NASA), and the Naval Research Laboratory made the observations. The seasonal ozone hole over Antarctica widened sharply in 2005, making

it the biggest hole since 2000 and the third largest on record, according to measurements reported here on Tuesday by the European Space Agency (ESA).

An ozone hole has been found to be forming over the Artic area similar to the one previously documented over Antarctica. Scientists have found concentrations of ozone destroying chlorine monoxide over the U.S. to be much higher than previously expected. Chlorine compounds such as chlorofluorocarbons(CFCs) and other ozone layer destroyers such as nitrous oxide have been found to be rapidly increasing in the atmosphere in recent years. NASA has found natural chlorine to account for only 20% of the chlorine effect on ozone in the stratosphere(1).

This decline could have large effects on Florida's sun based tourist businesses, as well as on increased health costs and crop losses(7.5). Florida tourism is a multibillion dollar industry, and insurance cost of skin cancer treatment are already rapidly increasing. A Florida Dept. of Commerce official indicated that there appears to have been a significant decline in beach tourism in the last 5 years due to ultraviolet skin damage concerns. Tourist related sales in beach areas amount to over $10 billion per year, not counting large amounts of uncounted real estate business, so even a decline of 1% would result in reduced tourism spending in the hundreds of millions of dollars.

Air conditioning systems are a major user of CFCs, and will be both less efficient and more expensive in the future due to limits or bans on the use of CFCs. New cooling technologies that do not use CFCs such as natural gas chillers, natural gas heat pumps, heat pipe cooling systems, and desiccant cooling systems appear to be cost effective for many applications and are likely to expand their share of the cooling market.

Acid Pollutant Reduction Strategies

26. Florida manmade sources are estimated by the FCG(12) to account for 66% of sulfur dioxide deposition in Florida. Electric power plants were estimated to be responsible for 68% of sulfur dioxide emissions. Some of the reduction strategies for sulfur dioxide include conservation, energy efficiency improvements, coal plant limestone injection or wet scrubber systems, coal cleaning methodologies, coal gasification, and fuel switching from high sulfur coal to low sulfur coal. Many studies indicate that the most cost effective of these are conservation or energy efficiency improvements. Studies such as (14.7)

indicate that 50% reductions in SO2 could be accomplished at no net cost through cost effective conservation or energy efficiency improvements while also similarly reducing emissions of nitrogen oxides, carbon dioxide, and toxic metals. RMI(14.7) and other energy consulting firms have staff constantly updating lists of the latest cost effective energy efficiency improvement options for buildings and industrial processes. The U.S. Dept. of Energy also has research programs and funds programs in most states to advise agencies and companies on energy efficiency improvement options.

The options chosen by consumers to provide an energy service make a large difference in emissions that is not included in price of an appliance. For example, use of a natural gas water heater that was 90% efficient as opposed to using an electric water heater using electricity from a gas power plant, that had a net efficiency of 30% due to power plant and transmission losses, would result in 1/3 as much emissions of carbon dioxide, nitrogen oxide, sulfur oxide, etc.

If the comparison was between a solar water heater and an electric water heater using electricity from a coal plant, the emissions difference and environmental cost difference would be even larger. Cost data such as that in Table 2 of the appendix can be used to assess the environmental cost difference of such options.

Mechanical coal cleaning technologies can remove considerable amounts of sulfur from some types of coal for less than $100 per ton of SO2 removed. More expensive chemical coal cleaning technologies for removing pollutants such as sulfur and toxic metals are also available. Electric power plant fuel switching or scrubbers usually cost from $300 to $500 per ton of SO2 removed, but cost can vary widely depending on transportation distance and other factors. Scrubber or limestone injection power plant systems also generate large volumes of waste containing toxic metals and other toxics.

Florida utilities are responsible for approx. 32% of Fla. nitrogen oxide emissions(12). The most effective NOx control for cyclone type coal boilers appears to be selective catalytic reduction(SCR), but the cost is high($3000 to $4000 per ton) and other operational and waste problems are created. For pulverized coal plants, low-NOx burners can be added, which reduce nitrogen oxide emissions by operating at lower temperatures. The cost of low-NOx burners range between $5/KW to $15/KW, depending on several factors including whether an overfire air system is also installed. Conventional low-NOx burners without OFA reduce NOx emissions 20 to 40%. Nalco Fuel Tech's NOx OUT process costs approx. $15/KW installed and can remove 55 to 70% of NOx. Babcock & Wilcox Low-NOx Cell plugs into existing standard cell burners and cost $8 to $12/KW installed, with reductions of NOx emissions of approx. 55%. Some plants, such as fluidized bed plants, when burning at lower temperatures have been found to produce much larger amounts of nitrous oxide however, which is both a greenhouse gas and ozone layer

destroyer(27.3).

The cost of installing a wet scrubber to remove SO2 at a recent existing coal plant site was approx. $300 per kilowatt(46). Scrubbers for new coal plant can run as low as $150 per KW, but can vary considerably depending on the site, technology chosen, and other parameters. Energy Biosystems Corp. of Houston, Texas has a desulfurization process using microorganisms that appears to offer lower cost sulfur removal than current methods with little loss in fuel heat content(46).

Natural gas cofiring technologies are available that reduce emissions considerably at existing coal plants or incinerators, while also improving efficiency in some applications(11.5). Gas cofiring (20% gas) at cyclone coal plants has been demonstrated to reduce nitrogen oxide emissions 50 to 60 percent. Gas cofiring (11%) at a tangentially fired coal plant reduced sulfur dioxide emissions 18.5%. Gas cofiring at a mass burn incinerator at the 12 to 15 percent level reduced nitrogen oxide emissions by 60%, carbon monoxide emissions by 35%, and improved boiler efficiency by 2.5%(11.5).

Combined cycle gas plants, which are the cleanest and most efficient fossil fuel power plants, also appear to be the cheapest to operate when total cost is taken into account (see Table 4). Coal gasification appears to be the coal burning technology that is currently the cleanest and cheapest for new facilities when total cost is considered, though coal cleaning technologies may be cost effective in some circumstances and technology is rapidly changing. Wind and solar thermal power plants appear to be approaching the cost of coal plants for use in some areas when total cost is taken into account.

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(30.1) World Watch Magazine, May 1993.

(30.3) T.P. Barnett, Scripps Institution of Oceanography, in Science News,

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TABLE 1

Summary of Range of Environmental and Health Damage Cost

Estimates from Reviewed Studies(see text)‑

and a proration of costs to Florida utilities

Type Damage United States Florida Cost for average

Cost Total Total Florida coal plant

(billions) (billions) (cents/kwh)

___________ ____________ __________ __________________

Greenhouse Effect $18 to $140 $0.9 to $7.2 0.3 to 2.4

Toxic Metals ** 10 to 60 0.5 to 3.0 0.15 to 0.80

Materials Damage 10 to 35 0.5 to 1.7 0.25 to 0.8

Crop Damage 5 to 6.5 0.25 to 0.3 0.12 to 0.14

Sulfur Dioxide ** 52 to 122 2.5 to 6.1 1.25 to 3.1

visability/

airline delays 12

health/work

productivity 30 to 100

lakes/recreation 10

Nitrogen Oxide ** 25 to 55 1.25 to 3.3 0.6 to 1.6

health/work loss 10 to 40

lake/bay/

eutrophication 5

lakes/rivers/rec 5

ozone layer damage/

nitrous oxide(N2O) 5

Particulates/Health 5.6 to 48 0.3 to 2.4 0.15 to 1.2

Land/water impacts 14 0.7 0.37

Health/Radioactive 5 0.25 0.12

emissions/ash

Volatile Organics 0 to 44 0 to 2.2 0 to 1.1

___________________________________________________________________

Total 145 to 530 7 to 28 3.3 to 11.5

* utilities are assumed to be responsible for 50% of the total

state damage cost from acidic emissions, since utilties

contribute approx. 50 % of combined sulfur dioxide and nitrogen

oxide emissions. utilities are assumed to be responsible for 30%

of toxic metal emissions and 33% of greenhouse gas emissions.

Cost were allocated to Fla. proportional to population and

Fla. cost estimates were spread across the 97,654 giga watt hours

of fossil fuel generation in Fla. in 1988(the inclusion of GWH

from cleaner gas and oil plants in the denominator tends to make

this a conservative estimate for coal plants; however the

assumption of zero net interstate transport and other assumptions

probably counterbalance this).

** Cost estimates for health effects cannot be accurately separated

between toxic metals, acid pollutants, and particulates due to

coexistance and synergistic interactions. Some of the effects

some attribute to acid pollutants are due to interactive effects

with ozone formed by chemical interactions with acid pollutants,

along with toxic metals and particulates.

TABLE 2

Range of Estimated Environmental/Health Costs for a Coal Power Plant

by Type of Pollutant in Recent Studies Reviewed in (14)*

Carbon Dioxide Sulfur Dioxide Nitrogen Oxide Particulates VOCs

________________________________________________________________________________

cents/kwh .40 to 3.8 .27 to 1.6 .6 to 7.2 .14 to 3.7 1.0 to 4.9

converted $4 to $300 to $69 to $167 to $1180 to

to $/ton** $40 $1726 $7526 $4400 $5900

EPRI(1987) $420 to $40 to

rural Penn. $1700 $460

in (14)

EPRI(1987) $960 to $40 to

suburban N.Y. $4620 $460

in (14)

EPA(36) $490 to $2400 to

$728 $9900

Holmeyer(12) $466 to $584 to $566 to

$2488 $3120 $2488

Chernick et al $84 $1840 $3160 $5260

in (14)

New York P.S.C. $4 $960 $1880 $2020

in (28)

California PUC $1726 $7526 $1306 $1306

$/ton, from(47) (PM10)

Massachussetts DPU $24 $1700 $7200 $4400 $5900

(1992 $/ton) (TSP)

Minnesota PUC $6 to $0 $69 $167 to $1190 (1994) $13.60 to $300 to $1640 (PM10)$2380

Nevada PSC $22 $1560 $6800 $4180 $1180

(1990) (PM10)

Oregon PUC $10 to $2000 to $2000 to

(1990) $40 $5000 (TSP)$4000

Bonneville $1500 $69 to $167 to Power Admin. $884 (TSP) $1540

* summary of the most quoted recent studies estimating environmental/

health costs of the major air pollutants, including those used

officially by the states of New York, California, and Wisconsin

** assumes: 964 metric tons of CO2 emissions per GWH of electricity

8.40 tons of sulfur dioxide emissions per GWH

2.66 tons of nitrogen oxide emissions per GWH

Table 4

Variable Costs of Operating Fossil Fuel Plants

(cents per kwh)

Capital Variable Emissions Full Societal

Expense Production Operating Cost

* Costs Value Related with

Cost Capital

_____________________________________________

Coal w/o scrubber,1% sulfur 2.3 2.5 4.3 9.1

Coal with scrubber 3.9 2.7 3.4 10.0

Fluidized Bed(AFBC) coal 4.6 2.7 2.6 9.9

Coal Gasification(IGCC) 4.6 3.1 3.6 11.5

#6 oil, 1% sulfur 3.1 6.4 3.4 12.9

#6 oil, 0.5% sulfur 3.1 6.8 2.9 12.8

Gas combustion turbine(CT) 4.9 8.4 1.6 14.9

Gas combined cycle(CC) 3.3 5.5 1.6 10.4

Solar Thermal ** 11.0** 1.4 0.4 12.8

Solar Photovoltaic 15.0 1.2 0.4 16.6

* first year capital expense based on estimates and common assumptions

used for Investor Owned Utilites including return on investment and

depreciation expense with recently observed capital cost estimates.

capital cost can vary considerably depending on local circumstances

and choices.

** the capital cost of a combination solar thermal plant with natural

gas backup might be reduced since it would be spread across

more kwh.

TABLE 3

Societal Externality Cost for Electric Generation Alternatives

($/MMBTU)

Waste Coal Plant Coal Plant AFBC IGCC #6 Oil #2 Oil Gas

to w/o with Coal Coal 1%S 0.5% s CC

Energy Scrubber Scrubber Plant to sulfur

Plant 1% sulfur Gas

_________________________________________________________________________________________________

Sulfur dioxide 1.80 1.10 0.55 0.48 1.08 0.54 0.16 0.01 -

(1) (2)

Nitrogen oxide 0.61 0.58 0.30 0.10 0.29 0.36 0.50 0.42 -

(1) (2)

Particulates 0.15 0.03 0.03 0.01 0.09 0.06 0.04 0.01 -

(1)

Carbon Dioxide 2.09 2.09 2.09 1.65 1.69 1.69 1.61 1.10 -

(1) (3)

Land/Water 0.37 0.37 0.37 0.27 0.27 0.27 0.17 0.24 -

(4)

Radioactive 0.10 0.10 0.10 0.05 0 0 0 0 -

emissions/ash

TOTAL 5.12 4.27 3.44 2.56 3.42 2.92 2.48 1.78 -

($/ MMBTU)

Heat Rate 10,000 10,000 10,000 10,000 10,400 10,400 13,600 7200

(BTU/KWH)

TotalCost(c/kwh) 5.1 4.3 3.4 2.6 3.6 3.4 3.3 1.3