Air Pollution Costs the West Almost $1 Trillion Annually

Air Pollution Costs the West Almost $1 Trillion Annually | 07/12/14
by John Brian Shannon John Brian Shannon

Air pollution has a very real cost to our civilization via increased healthcare costs, premature deaths, lowered productivity, environmental degradation with resultant lowered crop yields, increased water consumption and higher taxation.

However, air pollution is only one cost associated with fossil fuel use.

Smokestack Image Credit: Alfred Palmer
Smokestack image credit: Alfred Palmer

There are three main costs associated with energy

  1. The retail price that you pay at the gas pump or on your utility bill for example (which is paid by consumers)
  2. The subsidy cost that governments pay energy producers and utility companies (which is ultimately paid by taxpayers)
  3. The externality cost of each type of energy (which is paid by taxpayers, by increased prices for consumers, and the impact on, or the cost to, the environment)

Externality cost in Europe and the U.S.A.

A recent report from the European Environment Agency (EEA) states that high air pollution levels (one type of externality) in the EU cost society €189 billion every year and it’s a number that increases every year. (That’s $235 billion when converted to U.S. dollars)

To put that number in some kind of context, the cost of the air pollution externality in the EU annually, is equal to the annual GDP of Finland.

Let’s state that even more clearly. The amount of taxation paid by EU taxpayers every year to pay for airborne fossil fuel damage is equal to Finland’s entire annual economic output!

It’s getting worse, not better, notwithstanding recent renewable energy programs and incentives. Even the admirable German Energiewende program is barely making an impact when we look at the overall EU air quality index.

Of the 30 biggest facilities it identified as causing the most damage, 26 were power plants, mainly fueled by coal in Germany and eastern Europe. — Barbara Lewis (Reuters)

That’s just Europe. It’s even worse in the U.S., according to a landmark Harvard University report which says coal-fired power generation alone costs the U.S. taxpayer over $500 billion/yr in externality cost.

Each stage in the life cycle of coal—extraction, transport, processing, and combustion—generates a waste stream and carries multiple hazards for health and the environment. These costs are external to the coal industry and thus are often considered as “externalities.”

We estimate that the life cycle effects of coal and the waste stream generated are costing the U.S. public a third to over one-half of a trillion dollars annually.

Many of these so-called externalities are, moreover, cumulative.

Accounting for the damages conservatively doubles to triples the price of electricity from coal per kWh generated, making wind, solar, and other forms of non fossil fuel power generation, along with investments in efficiency and electricity conservation methods, economically competitive.

We focus on Appalachia, though coal is mined in other regions of the United States and is burned throughout the world.” — Full Cost Accounting for the Life Cycle of Coal by Dr. Paul Epstein, the Director of Harvard Medical School Center for Health and the Global Environment, and eleven other co-authors

The report also notes that electricity rates would need to rise by another .09 to .27 cents per kilowatt hour in the U.S. to cover the externality cost of American coal-fired electricity production.

The externality cost for solar or wind power plants is zero, just for the record

Dr. Epstein and his team notes: “Coal burning produces one and a half times the CO2 emissions of oil combustion and twice that from burning natural gas (for an equal amount of energy produced).”

There’s the argument to switch from coal to natural gas right there

Also in the Harvard report in regards to the intrinsic inefficiency of coal:

Energy specialist Amory Lovins estimates that after mining, processing, transporting and burning coal, and transmitting the electricity, only about 3% of the energy in the coal is used in incandescent light bulbs.

…In the United States in 2005, coal produced 50% of the nation’s electricity but 81% of the CO2 emissions.

For 2030, coal is projected to produce 53% of U.S. power and 85% of the U.S. CO2 emissions from electricity generation.

None of these figures includes the additional life cycle greenhouse gas (GHG) emissions from coal, including methane from coal mines, emissions from coal transport, other GHG emissions (e.g., particulates or black carbon), and carbon and nitrous oxide (N2O) emissions from land transformation in the case of MTR coal mining.” — Full Cost Accounting for the Life Cycle of Coal report

It’s not like this information is secret. All European, American, and Asian policymakers now know about the externality costs of coal vs. renewable energy. It’s just that until recently everyone thought that the cost of switching to renewable energy, was higher than the cost of fossil externalities.

It’s not only an economic problem, it’s also a health problem

Air pollution impacts human health, resulting in extra healthcare costs, lost productivity, and fewer work days. Other impacts are reduced crop yields and building damage.

Particulate matter and ground-level ozone are two of the main pollutants that come from coal.

90% or more of Europeans living in cities are exposed to harmful air pollution. Bulgaria and Poland have some of the worst pollution of the European countries.

An estimated 400,000 premature deaths in European cities were linked to air pollution in 2011. — CleanTechnica

Externality cost in China

Remember the Beijing Olympics where the city’s industry and commercial business were shut down to allow visitors and athletes to breathe clean air during their stay (and Wow!) look at their clear blue sky for the first time in decades. Great for tourists! Bad for Beijing business and industry, with the exception of the tourism industry (for one month) of course.

The Common Language Project reported in 2008 that premature deaths in China resulting from fossil fuel air pollution were surpassing 400,000 per year.

China faces a number of serious environmental issues caused by overpopulation and rapid industrial growth. Water pollution and a resulting shortage of drinking water is one such issue, as is air pollution caused by an over-reliance on coal as fuel. It has been estimated that 410,000 Chinese die as a result of pollution each year. — clpmag.org

The die is cast since it is becoming common knowledge that renewable energy merely requires a small subsidy to assist with power plant construction and grid harmonization — while fossil fuels continue to require truly massive and ongoing subsidies to continue operations.

Subsidy cost of fossil fuels

Already there is talk of ending fossil fuel subsidies, which in 2014 will top $600 billion worldwide

Want to add up the total costs (direct economic subsidy and externality cost subsidy) of fossil fuels?

Add the $600 billion global fossil fuel subsidy to the to the $2 trillion dollars of global externality cost and you arrive at (approx) $2.5 trillion dollars per year. Then there is the more than 1 million premature deaths globally caused by air pollution. All of that is subsidized by the world’s taxpayers.

Compare that to the total costs of renewable energy. Well, for starters, the economic subsidy dollar amount for renewable energy is much less (about $100 billion per year globally) and there are no externality costs.

No deaths. No illness. No direct or related productivity loss due to a host of fossil fuel related issues (oil spills, coal car derailment, river contamination, explosions in pipelines or factories) for just a very few examples.

The fossil fuel industry is a very mature industry, it has found ways to do more with ever-fewer employees, and it gets more subsidy dollars than any other economic segment on the planet.

By comparison, the renewable energy industry is a new segment, one that requires many thousands of workers and it gets only relative handfuls of subsidy dollars. And, no externalities.

It becomes clearer every day that high-carbon fossil must be displaced by renewable energy

No longer is it some arcane moral argument that we should switch to renewables for the good of the Earth; Fossil fuel is proving to be a major factor in human illness/premature deaths, it sends our money abroad to purchase energy instead of keeping our money in our own countries, and the wholly-taxpayer-funded subsidy cost of fossil is out of control and getting worse with each passing year.

The time for dithering is past. It’s time to make the switch to renewable energy, and to start, we need to remove the worst polluting power plants from the grid (and at the very least, replace them with natural gas powered plants) or even better, replace them with hybrid wind and solar power plants.

To accomplish this, governments need to begin diverting some of the tens of billions of dollars annually paid to the fossil fuel industry to the renewable energy industry.

Germany’s Energiewende program was (and still is) an admirable first step. Once Germany has completed it’s energy transition away from oil, coal and nuclear — having replaced all of that generation capacity with renewable energy and natural gas, only then can it be hailed a complete success — and German leaders should go down in history as being instrumental in changing the world’s 21st century energy paradigm.

Dank an unsere deutschen Freunde! (With thanks to our German friends!)

If only every nation would sign-on to matching or exceeding the ongoing German example, we wouldn’t have 1 million premature deaths globally due to fossil fuel burning, we wouldn’t have almost 2 trillion dollars of externality cost, we wouldn’t need $600 billion dollars of direct subsidies for fossil fuel producers — and we would all live in a healthier environment, and our plant, animal, and aquatic life would return to their normally thriving state.

Taxes would reflect the global $2.5 trillion drop in combined fossil fuel subsidy and fossil fuel externality costs, employment stats would improve, productivity would increase, the tourism industry would receive a boost, and enjoyment of life for individuals would rebound.

It’s a truism in the energy industry that all energy is subsidized, of that there is no doubt. Even renewable energy receives tiny amounts of subsidy, relative to fossil.

But it is now apparent that over the past 100 years, getting ‘the best (energy) bang for the buck’ has been our nemesis. The energy world that we once knew, is about to change.

The world didn’t come to an end when air travel began to replace rail travel in the 1950’s. Now almost everyone travels by air, and only few travel by train. And what about the railway investors didn’t they lose their money when the age of rail tapered-off? No, they simply moved their money to the new transportation mode and made as much or more money in the airline business.

Likewise, the world will not come to an end now that renewable energy is beginning to displace coal and oil. Investors will simply reallocate their money and make as much or more money in renewable energy.

Clean Trillion Campaign pushes for $36 Trillion of Clean Energy

by Tina Casey

Oh, the irony. With the devastating coal-related West Virginia chemical spill barely a week behind us, hundreds of leading investment and financial executives gathered at the United Nations for the Investor Summit on Climate Risk on January 15, to focus on the opposite of that: a $36 trillion effort called the Clean Trillion Campaign, to transition the global economy out of fossil fuel dependency and onto a more safe and sustainable path.

The Clean Trillion Campaign is the brainchild of Ceres, the not-for-profit sustainable investor organization which also hosted the Investor Summit on Climate Risk.

CleanTechnica was invited to come along. So here are some of our takeaways, through the lens of the West Virginia episode.

US Currency (cropped) by (401) K 2013.
Hundreds of leading investment and financial executives gathered at the United Nations for the Investor Summit on Climate Risk on January 15, to focus on a $36 trillion effort called the Clean Trillion Campaign, to transition the global economy out of fossil fuel dependency and onto a more safe and sustainable path. US Currency (cropped) by (401) K 2013.

Adapting Business To Address Climate Change

New York State Comptroller Thomas DiNapoli, who spoke at the event, singled out the US coal industry’s current woes to illustrate how business strategies that are “based on trying to preserve the status quo” are heading into deep trouble, and he urged the fossil fuel industry to “be proactive and adapt.”

Those are lessons apparently yet to be learned both by the company responsible for the spill, Freedom Industries, and the private water supplier affected by the spill, West Virginia American.

To recap the West Virginia spill briefly, last week the chemical Crude MCHM, a foaming agent used to wash coal and other minerals, entered the West Virginia American’s intakes on the Elk River, making its way into homes, businesses, and everything else with plumbing across a nine-county area with 300,000 residents.

The economic damage is still being totaled up, but in the meantime it’s clear that long running gaps in federal oversight combined with weak state regulations to form a perfect platform for the Keystone Cops-esque response of the two companies involved, both of which fell far short in the categories of emergency prevention, preparedness, response, and communications (tip: follow Charleston Gazette reporter Ken Ward, Jr. for updates at @Kenwardjr).

Investor Summit On Climate Risk

If the West Virginia debacle represents the status quo, the question is how to get the ball rolling in the other direction. From the investor perspective, that means there has to be a clear path and a level playing field for clean energy investments, which of course translates into legislative action.

Given the political obstacles to hurdle, this is where the Ceres summit could make a real difference.

Former Treasury Secretary Robert Rubin and investor/activist Tom Steyer kicked things off by urging the attendees to think and act like they are the agents of change. Simply put, they asked investors to start talking about climate change to everyone with whom they come into contact, including their elected representatives.

Rubin noted that although more people understand the facts about climate change, they haven’t internalized that information to the point where it translates into action, namely, into political pressure.

Considering the force of the climate change denial movement in the US Congress, we think that’s a bit of an optimistic assessment. Be that as it may,  Rubin asserted that business can play a key role in creating pressure for change, as business leaders are members of the “chattering class,” the people who get face time with elected officials and who have a direct impact on policymaking.

Steyer, who is also founder of the organization NextGen, made a complimentary point about reaching individual voters by zeroing in on local issues where their votes have a direct impact on local elected officials and on their US House of Representatives members, “grinding it out on the ground” as he puts it. In his experience, elected officials will respond to calls for change if and only if they think that the change involved is the votes of their constituents.

That’s where business can play a role, by reaching people with their concerns about local issues. As Steyer puts it, “we should ask people in this room to deal in the reality of where we are now and realize the power of business in this conversation.”

The Clean Trillion Campaign

The Clean Trillion Campaign name refers to closing the gap that Ceres has identified between the $36 trillion in transformative investments needed by 2050 to prevent catastrophic climate change, and where we are now.

The campaign provides investors with tools for managing climate risks in their portfolios and investing in clean energy opportunities, while encouraging them to engage with companies on climate change.

Specifically, the campaign contains ten key rallying points:

1. Develop capacity to boost clean energy investments and consider setting a goal such as 5 percent portfolio-wide clean energy investments
2. Elevate scrutiny of fossil fuel companies’ potential carbon asset risk exposure
3. Engage portfolio companies on the business case for energy efficiency and renewable energy sourcing, as well as on financing vehicles to support such efforts
4. Support efforts to standardize and quantify clean energy investment data and products to improve market transparency
5. Encourage “green banking” to maximize private capital flows into clean energy
6. Support issuances of asset-backed securities to expand debt financing for clean energy projects
7. Support development bank finance and technical assistance for emerging economies
8. Support regulatory reforms to electric utility business models to accelerate deployment of clean energy sources and technologies
9. Support government policies that result in a strong price on carbon pollution from fossil fuels and phase out fossil fuel subsidies
10. Support policies to de-risk deployment of clean energy sources and technologies

You can find out more about the Clean Trillion Campaign at ceres.org/cleantrillion,  and be sure to check out Ceres’s BICEP campaign, too.

Follow me on Twitter and Google+.

Psst, wanna keep up with all the latest clean tech news from CleanTechnica? Subscribe to our newsletter.

Repost.Us - Republish This Article

This article, $36 Trillion Push For Clean Energy Investment, is syndicated from Clean Technica and is posted here with permission.

About the Author

Tina CaseyTina Casey specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. You can also follow her on Twitter @TinaMCasey and Google+.

U.S. Coal System No Longer Cost-Effective

by Guest Contributor Jeff Spross

U.S. Coal
Image Credit: Union of Concerned Scientists.

Originally published on ClimateProgress

Aging and inefficient plants, competing energy sources, and the looming reality of climate change are all catching up with the coal industry.

According to a new report from the Union of Concerned Scientists — updated from 2012 numbers — as much as 17 percent of coal-fired power in the United States is already uncompetitive, just compared to natural gas and using mid-range estimates.

The report looked at the operating costs for current coal plants, which are older and have largely paid off their capital costs, up against natural gas plants that have also paid off their capital costs. The operating costs also included all the necessary upgrades to bring the coal plants in line with pollution and carbon dioxide regulations. That yielded 329 coal units that are economically uncompetitive, or a total of 59 gigawatts of electricity-generating capacity — 17 percent of the 347 gigawatts of coal power throughout the United States.

That number of uneconomic coal units could also get considerably larger depending on what the future holds. If a price of $20 per ton of carbon dioxide emissions were to be put in place, 131 gigawatts would be uncompetitive. If the production tax credit (PTC) for wind energy is preserved, 71 gigawatts of current coal capacity will be uncompetitive by comparison, versus just 22 gigawatts if the PTC is allowed to expire.

Ripe-for-Retirement-2013-Update-Scenario-Summary-Chart-e1386715451611
Image Credit: Union of Concerned Scientists.

The points about the carbon price and the PTC are especially noteworthy. Right now the economic playing field is tilted in favor of fossil fuels, because their price on the market doesn’t factor in the damage done by climate change.

A price on carbon, through either a carbon tax or a cap-and-trade system, would be the most effective correction. (In fact, most analysis suggests the appropriate price for carbon emissions is considerably higher than $20 per ton.) Alternative policies like the PTC or the upcoming carbon dioxide regulations from the Environmental Protection Agency aren’t as efficient as a direct price, but they approach the same effect.

The reasons these plants are being undercut by other sources of energy are myriad. For one thing, they averaged 45 years in age — well past the 30-year life span for most coal plants. That means they’re less advanced, less efficient, and more expensive to operate. As a result, they’re already run less than other plants for purely business reasons, even before factoring in the climate-related concern that, being old and inefficient, they’re also quite dirty.

Seventy percent of the coal plants the UCS identified were missing at least three of the four major technologies used to control coal’s damage to the environment and human health. Upgrading them to cut down on particulate matter, mercury, sulfur dioxide and nitrous oxide emissions would be considerable, not to mention bringing them into line with the EPA’s carbon regulations.

In 2012, the UCS also pointed to reports on the growth of renewable energy and other projections, which showed the U.S. will have 145 gigawatts of excess electricity-generating capacity by 2014, giving the country plenty of wiggle room to retire the identified coal power and shift to cleaner sources. Not to mention that “uncompetitive” means, by definition, that there’s money to be made by replacing those plants with alternatives.

This article, US Coal System No Longer Cost-Effective, is syndicated from Clean Technica and is posted here with permission.

About the Author

Guest ContributorGuest Contributor is many, many people all at once. In other words, we publish a number of guest posts from experts in a large variety of fields. This is our contributor account for those special people. 😀

Ontario Cleans Its Hands Of Coal

by Matthew Klippenstein.

Canada’s “little Germany” has cut per-capita emissions 24% since 1990.

Parliament buildings in Ontario, Canada. Image Credit: Shutterstock
Parliament buildings in the city of Ottawa, province of Ontario, Canada. Image Credit: Shutterstock

The Ontario government announced on Friday that it will introduce legislation next week to ban the burning of coal and the building of new coal plants. The Canadian province expects to have completely outgrown coal by 2014, thanks to a combination of efficiency, nuclear, natural gas and an ambitious renewables program – and to save C$4.4 billion per year (US $4.2 billion) in “externalities” like health costs, from having done so.

The province will end this year on a symbolic high-note as well, completing the conversion of its enormous Nanticoke Generation Station to run on biomass. The coal plant was at one point the single-biggest source of greenhouse gas emissions in Canada, providing 4 GW of baseline electricity. Half its generating units have been decommissioned in recent years, and the station now operates as a “peaker” plant — idling for most of the day, and only ramping up in times of high electricity demand.

Ontario being a net exporter of electricity – it sold 10 TWh of excess electricity last year, about enough to power Hawaii – the announcement is great news for the lungs of families there, and in the surrounding provinces and states. Going forward, Ontarian children will only have to endure “second-hand smog” from coal burnt in nearby Michigan.

Digging into the statistics*, CleanTechnica found that from 1990 to 2011, Ontario’s greenhouse gas emissions dropped 3 percent – achieving only about half of Canada’s Kyoto commitment. But the province’s growth in the past 20 years means its per-capita emissions actually dropped a full 24 percent. Though the province had largely weaned itself off coal by then, the full phase-out should push the per-capita emissions reductions past the one-quarter mark (25 percent).

By comparison, Germany’s Energiewende has powered a 27 percent emissions reduction since 1990, and its stable population means per-capita emissions are down about 28 percent.

Canada’s “little Germany”

Referring to Ontario as a “little Germany” purely on account of its environmental progress would be to underestimate the parallels between the two.

Ontario is Canada’s manufacturing centre, and achieved its emissions reductions even as it began a nine-year run as North America’s top auto manufacturing jurisdiction. (That the province’s auto sector achieved this with high-skill, high-wage, unionized workers, despite lower-cost labour elsewhere, compares well with the German automotive experience.)

And though Ontario doesn’t dominate Canadian Confederation to the extent that Germany does the European Union, its size and influence mean it can be considered first among provinces; it hosts the country’s capital, after all.

The province’s Green Energy Act was partially modelled on the successful policies that drove the German Energiewende. Small surprise, then, that its implementation was only partially smooth. Several wind farm projects located near uncompensated individuals and communities, encountered fierce resistance from the aforementioned uncompensated individuals and communities.

As noted by a recent Dutch study, “people who benefit economically from wind turbines have a significantly decreased risk of annoyance, despite exposure to similar sound levels [as those who do not benefit economically].” Or, to translate from scientific to soundbite English, the Ontario government had forgotten the wisdom of turning local stakeholders into local shareholders.

The province was also judged to have violated World Trade Organization rules when it enforced local-content requirements for renewables to qualify for feed-in tariffs; and the politically-motivated cancellation of two natural gas plants may wind up costing the province one billion dollars.

For all these missteps, Ontario continues to move forward, slowly transforming its electricity, energy use, and economy. (“Little Germany,” indeed…) And while residential electricity rates have risen in recent years, they top out at a maximum 13 cents / kWh during peak hours, still on the low side of North American norms.

Meanwhile, in an alternate universe

One wonders whether Keystone XL and other pipelines would have already received their permits if Canada had followed Ontario’s lead, instead of Alberta’s. (Alberta is home to Canada’s tar sands.) Would counterparties be willing to help Canadian bitumen into international markets if the country could credibly claim to be using the one-time boon to swiftly transition off fossil fuels – developing expertise that could then be exported abroad?

The Canadian provinces of Ontario, Quebec, and British Columbia – encompassing three-quarters of the Canadian population – have reduced per-capita greenhouse gas emissions 24, 17 and 11 percent respectively since 1990. And while Canada’s Kyoto commitments were based on absolute reductions, not per-capita reductions, most observers would acknowledge these achievements as a good start. Residents of the three provinces generate 10 to 13 tonnes of CO2 per year, in line with their German counterparts.

Alas, we don’t live in an alternate universe; and in our universe, the Canadian government has long since chosen to be bellicose and belligerent in pushing its bitumen interests. In addition to cutting climate research and muzzling scientists, the government has spied on pipeline opponents and gone out of its way to describe them in terms befitting the 9/11 terrorists**. During the 2008 election campaign, the ruling Conservative Party even created an online video showing a puffin repeatedly defecating on an opposition leader, and characterizing his carbon tax proposal as a “tax on everything.”

Ironically, investigative journalists have determined that Canada’s oil giants are quietly in favour of a carbon tax, which would reduce regulatory risks to their projects’ profitability. With Shell Oil’s recent announcement that it assumes a $40/tonne CO2 price for new projects, we can assume they’re among this group.

With the federal government set in its self-destructive ways, Canadians have been forced to look to the provincial and municipal levels for leadership on climate issues. And while hard-working stewards from across the political spectrum are working to create a cleaner, better future for community and country, Ontario’s leadership deserves special acknowledgement.

In phasing out coal, Ontario has let go of the 18th century, to better embrace the 21st. The government showed its citizens the willingness to take action to build the better future their children deserve.

Better still, the many other measures the province took leading up to this announcement emphatically proved that Energiewende-esque per-capita emissions reductions can be achieved, even in North America, and even without a price on carbon. Which gives hope – and perhaps even a hint of excitement – about the progress we’ll be able to make when governments begin pricing carbon, worldwide.

* See www.tinyurl.com/CanadaEVSales. Ontario data on “Canada by Province” tab (row 70-ish). German data on “Global GHG’s” tab.

** In the fourth paragraph, Minister Oliver states, “these groups threaten to hijack our regulatory system to achieve their radical ideological agenda” (emphasis added). In a post-9/11 world, the concept of radical hijackers universally brings to mind the terrorists from those terrible, tragic attacks. By extension, referring to one’s opponents as radical hijackers is to compare them, by analogy, to the 9/11 terrorists. This document being an open letter published on a government website, this slanderous characterization of pipeline opponents would have been approved by Minister Oliver and the messaging-obsessed Prime Minister as well.

Repost.Us - Republish This Article

This article, Ontario Cleans Its Hands Of Coal, is syndicated from Clean Technica and is posted here with permission.

About the Author

Matthew Klippenstein is a professional engineer and plug-in electric vehicle enthusiast. A member of the Vancouver Electric Vehicle Association, he lives with his family in the nearby suburb of Burnaby, tweets at @EclecticLip and blogs occasionally at http://www.eclecticlip.com. A thirteen-year veteran of the fuel cell industry with Ballard Power Systems, he was part of the micro-CHP product team which won the American Electrochemical Society New Technology Award in 2007, and co-authored the company’s white paper on the future of electricity (“electron-democracy”) for a McKinsey & Company essay series to which Steven Chu and Andy Grove also contributed. In roles spanning research, product design and production, he helped the company scale-up from discrete manual assembly to continuous, automated roll-to-roll processing, with the company manufacturing its 1,000,000th production-line MEA (membrane-electrode assembly) in 2010.