Environmental Impacts and Costs of Energy

Environmental damage is one of the main justifications for continued efforts to reduce energy consumption and to shift to cleaner sources such as solar energy. In recent years there has been much progress in the analysis of environmental damages, in particular thanks to the ExternE (External Costs of Energy) Project of the European Commission. This article presents a summary of the methodology and key results for the external costs of the major energy technologies. Even though the uncertainties are large, the results provide substantial evidence that the classical air pollutants (particles, No(x), and SO(2)) from fossil fuels impose significant public health costs, comparable to the cost of global warming from CO(2) emissions. The total external costs are relatively low for natural gas (in the range of about 0.5-1 eurocents/kWh for most EU countries), but much higher for coal and lignite (in the range of about 2-6 eurocents/kWh for most EU countries). By contrast, the external costs of nuclear, wind, and photovoltaics are very low. The external costs of hydro are extremely variable from site to site, and the ones of biomass depend strongly on the specific technologies used and can be quite large for combustion.