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Hidden Costs of EnergyUnpriced Consequences of Energy Production and Use

Energy production and use have many well-known bene ts to society, but they also haveadverse effects on human health, property, and the environment that are not re ected inmarket prices. This report from the National Research Council, requested by Congress,examines those hidden costs of energy, with the following key ndings.

1. Hidden costs o damages in 2005 amounted to more than $120 billion dollars, including thoseassociated with pollutions efect on human health, crops, timber yields, and other areas.

Because there were many areas where it was not possible to quanti y damages, the true extecosts are likely to be ar higher than this gure.

2. Te committee considered the issue o climate change, which is expected to negatively afectagriculture, ecosystem services, and human health. Te committee could not assign climate-related damages a speci c dollar value, but estimated a range o possible damages based onprevious scienti c research.

Including estimates o uture damages rom climate change could potentially more thandouble the $120 billion gure.

3. Coal- red electricity plants generated the most damages.Without counting the costs o climate change, damages rom coal plants amounted to

$62 billion in 2005. Non-climate damages rom natural gas plants amounted to $740 millionthat year.4. Te diferences in damages among diferent

coal- red plants was huge:Te worst (most damaging) 20 percent ocoal plants produced 63 percent o the totalnon-climate damages rom coal plants. On theother hand, the less-damaging 50 percent ocoal plants produced only 12 percent o that$62 billion.Diferences in damages among plants re ect, in

part, variations in the amount o electricity theyproduce. However, variations rom coal- redplants were also in uenced by the sul ur contento the coal, type o emission controls, and age othe plant.Natural gas red plants also showed a skeweddistribution, with 10% o the plants causing65 percent o the aggregate damages.

How Damages Were Assessed

Energy technologies were evaluated overtheir ull li e cycles: uel extraction,production, distribution, use, and wastedisposal. Damages associated with airpollution rom electricity generation andtransportation were assessed by (1) usingemissions data on particulate matter (PM),

sul ur dioxide (SO2), and oxides onitrogen (NOx) rom various sources;(2 translating emissions into ambient airconcentrations; and (3) estimating healthand other impacts associated with changesin air quality. Estimated dollar values werethen assigned to those impacts.

KEY FINDINGS

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5. Average damages associated with coal- red plants per kilowatt-hour were 20 times higher than thedamages associated with natural gas red plants per kilowatt-hour.

6. Highway vehicles considering energy production and use over the li ecycles o vehicles and uels$56 billion in health and other non-climate damages, with $36 billion rom light-duty vehicles and$20 billion rom heavy-duty vehicles.

Surprisingly, most o the vehicle- uel combinations produced relatively similar damages, althoughrelative contribution o damages rom the vehicles and uels li ecycles varied.

7. Although most people only consider the emissions rom vehicle tailpipes when thinking about transrelated damages, the emissions rom driving a vehicle accounted or only one-quarter to one-thirddamages related to vehicles, according to the committees modeling. Te majority o damages two-ththree-quarters result rom the manu acturing o the vehicle and production o the uel or it.

It is essential to take the damages o vehicle manu acturing and uel production into account whenconsidering transportation-related damages.Some green transportation technologies, such as corn ethanol and plug-in electric vehicles, wereestimated to produce as many or more non-climate damages than traditional uels and vehicles w

ull vehicle li ecycle was taken into account.Plug-in electric vehicles were estimated to produce some o the highest damages, largely because

on ossil- uel based electricity. Te damages rom electric vehicles would be expected to decreasproduction o energy becomes less damaging in the uture.Corn ethanol was estimated to produce some o the highest non-climate damages in 2005 becausproduction and conversion o corn into uel is energy-intensive.

8. Regulations that are currently in place and will be carried out in the uture, including light-dutyeconomy standards, are expected to reduce non-climate damages by 2030.

However, urther reducing energys non-climate damages in a signi cant way will require newtechnological breakthroughs, especially in transportation.

Committee on Health, Environmental, and Other External Costs and Bene ts of Energy Production and Consumption: Jared L. Cohon (Chair ), Carnegie Mellon University;Maureen L. Cropper (Vice Chair ), Universityo Maryland;Mark R. Cullen, Stan ord University School o Medicine;Elisabeth M. Drake, MassachusettsInstitute o echnology (retired);Mary English, Te University o ennessee;Christopher B. Field, CarnegieInstitution o Washington;Daniel S. Greenbaum, Health Efects Institute;James K. Hammitt, Harvard UniversityCenter or Risk Analysis;Rogene F. Henderson, Lovelace Respiratory Research Institute;Catherine L. Kling, IowaState University;Alan J. Krupnick, Resources or the Future;Russell Lee, Oak Ridge National Laboratory;H.Scott Matthews, Carnegie Mellon University;Tomas E. McKone, Lawrence Berkeley National Laboratory;Gilbert E. Metcalf, u ts University;Richard G. Newell, Duke University*;Richard L. Revesz, New YorkUniversity School o Law;Ian Sue Wing , Boston University;errance G. Surles, University o Hawaii at Manoa;Raymond A. Wassel (Project Director ); James J. Reisa (Director, Board on Environmental Studies and Toxicology ),National Research Council.

* Resigned rom the committee on August 2, 2009, to accept an appointas the administrator o the U.S. Energy In ormation Administratio

Te National Academies appointed the above committee o experts to address the speci c taskrequested by the United States Congress. Te members volunteered their time or this activity; theirreport is peer-reviewed and the nal product approved by both the committee members and theNational Academies. Tis report derivative was prepared by the National Research Council based on thecommittees report.

For more in ormation, contact the Board on Environmental Studies and oxicology at (202) 334-3060 or httnas.edu/best. Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use is available rom the NationaAcademies Press; call (800) 624-6242 or (202) 334-3313, or visit the NAP website at www.nap.edu.

Permission granted to reproduce this brief in its entirety with no additions or alterations.

2009 Te National Academy of Sciences