Hidden Costs of Energy : Unpriced Consequences of Energy Production and Use

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  • Format: Paperback
  • Copyright: 2010-07-30
  • Publisher: Natl Academy Pr

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Despite the many benefits of energy, most of which are reflected in energy market prices, the production, distribution, and use of energy causes negative effects. Many of these negative effects are not reflected in energy market prices. When market failures like this occur, there may be a case for government interventions in the form of regulations, taxes, fees, tradable permits, or other instruments that will motivate recognition of these external or hidden costs. The Hidden Costs of Energydefines and evaluates key external costs and benefits that are associated with the production, distribution, and use of energy, but are not reflected in market prices. The damage estimates presented are substantial and reflect damages from air pollution associated with electricity generation, motor vehicle transportation, and heat generation. The book also considers other effects not quantified in dollar amounts, such as damages from climate change, effects of some air pollutants such as mercury, and risks to national security. While not a comprehensive guide to policy, this analysis indicates that major initiatives to further reduce other emissions, improve energy efficiency, or shift to a cleaner electricity generating mix could substantially reduce the damages of external effects. A first step in minimizing the adverse consequences of new energy technologies is to better understand these external effects and damages. The Hidden Costs of Energywill therefore be a vital informational tool for government policy makers, scientists, and economists in even the earliest stages of research and development on energy technologies.

Table of Contents

Summaryp. 3
Introductionp. 22
Genesis of the Studyp. 22
Statement of Taskp. 23
Related Studiesp. 25
Defining and Measuring Externalitiesp. 29
Selecting Energy Sources and Uses for This Studyp. 36
Framework for Evaluating External Effectsp. 43
The Policy Context for This Studyp. 54
Some Methodological Issues: Space, Time, and Uncertaintyp. 57
Organization of the Reportp. 63
Energy For Electricityp. 64
Backgroundp. 64
Electricity Production from Coalp. 71
Electricity Production from Natural Gasp. 109
Electricity Production from Nuclear Powerp. 125
Electricity Production from Windp. 136
Electricity Production from Solar Powerp. 142
Electricity Production from Biomassp. 145
Transmission and Distribution of Electricityp. 147
Summaryp. 148
Energy For Transportationp. 154
Backgroundp. 154
Approach to Analyzing Effects and Externalities of Transportation Energy Usep. 157
Production and Use of Petroleum-Based Fuelsp. 165
Production and Use of Biofuelsp. 181
Electric Vehiclesp. 197
Natural Gasp. 204
Hydrogen Fuel-Cell Vehiclesp. 207
Summary and Conclusionsp. 209
Energy For Heatp. 222
Backgroundp. 222
Heat in Residential and Commercial Buildingsp. 226
Heat in the Industrial Sectorp. 228
Estimates of Externalities Associated with Energy Use for Heatp. 232
Emissions of Greenhouse Gasesp. 240
Potential Damages Reductions in 2030p. 241
Summaryp. 246
Climate Changep. 248
Overview of Quantifying and Valuing Climate-Change Impactsp. 248
Impacts on Physical and Biological Systemsp. 261
Impacts on Human Systemsp. 266
Economic Damage from Irreversible and Abrupt Climate Changep. 289
Aggregate Impacts of Climate Changep. 294
Marginal Impacts of Greenhouse Gas Emissionsp. 300
Research Recommendationsp. 308
Infrastructure and Securityp. 309
Introductionp. 309
Disruption Externalities in the Electricity-Transmission Gridp. 309
Facility Vulnerability to Accidents and Attacksp. 316
External Costs of Oil Consumptionp. 325
Security of Energy Supplyp. 330
National Security Externalitiesp. 331
Conclusionp. 336
Overall Conclusions and Recommendationsp. 337
The Committee's Analysesp. 337
Limitations in the Analysesp. 338
Electricity Generationp. 339
Transportationp. 348
Heat Generationp. 356
Climate Changep. 358
Comparing Climate and Nonclimate Damage Estimatesp. 360
Overall Conclusions and Implicationsp. 362
Research Recommendationsp. 367
Referencesp. 372
Abbreviationsp. 400
Common units and Conversionsp. 405
Biographic Information on the Committee on Health, Environmental, and Other External Costs and Benefits of Energy Production and Consumptionp. 411
A Simple Diagrammatic Example of an Externalityp. 420
Description of Apeep Model and Its Applicationp. 423
Description of Greet and Mobile6 Models and Their Applicationsp. 432
Supplemental Information on Land-Use Externalities From Biofuels: A Case Study of the Boone River Watershedp. 470
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