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Environmental Impacts and Costs of Energy

How much is clean air worth? Ari Rabl

Ecole des Mines de Paris

ExternE = “External Costs of Energy” funded by European Commission DG Research, since 1991

(until 1995 with ORNL/RFF)

>200 scientists in all countries of EUSeries of projects, includ. ExternE Transport,

ExternE-Pol, NEEDS (04-08), CASES (06-08) and related projects, e.g. ESPREME, …

Major publications 1995, 1998, 2000, 2004www.externe.info

Methodology• Site specific impact pathway analysis

(for each pollutant: emissiondispersionimpactcost)

2) Life Cycle Analysis of fuel chain (LCA)

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Impact Pathway Analysis

⇒ impact(e.g., hospital admissions due to PM 10)

DOSE-RESPONSE FUNCTION

⇒ cost(e.g., cost of hospital admission,includ. WTP to avoid suffering)

MONETARY VALUATION

DISPERSION(atmospheric dispersion & chemistry)

⇒ emission(e.g., kg/yr of PM 10)

⇒ increase in concentrationat receptor sites

(e.g., µg/m 3 of PM10in all affected regions)

SOURCE(site, stack height and technology)

DOSE

IMPACT

Dos e -

R e s pons e

Func tion

to calculate damage of a pollutant

emitted by a source

Impacts are summed over entire region that is affected (Europe) and all damage types that can be quantified:•health•loss of agricultural production•damage to buildings and materials

Result: €/kg of

pollutant

Multiply by kg/kWh to get

€/kWh

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Pathways for Dioxins and Toxic MetalsFor many persistent pollutants (dioxins, As, Cd, Cr,

Hg, Ni, Pb, etc)ingestion dose is about two orders of magnitude

higher than inhalation

freshwater

soil

air

agriculturalvegetation

milk meat

saltwater

seafood

ingestiondose

fresh waterfish

deposition (wet & dry)

emission

inhalationdose

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Relation impact pathway analysis LCA

Life cycle assessment : first sum over emissions ↓ then

Σ → × multiplication by

" "potential impact indices

→ ( )real impacts for each stage site specific

Goal: evaluate the entire matrix

Stage of fuel chain

Fuel extraction

Fuel transport

Power plant

Transmission of electricity

Management of wastes

Steps of impact pathway analysisEmission Dispersion -Exposureresponsefunction

Economicvaluation→

↓

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Key AssumptionsLocal + regional dispersion models

Linear dose-response functions for health (no threshold):

Mostly PM2.5, PM10, O3

A few for SO2 and CO

None for NO2

Sulfates are treated like PM10, Nitrates like 0.5 PM10

also As, Cd, Cr, Hg, Ni and Pb

Mortality in terms of LLE (loss of life expectancy) rather than number of deaths

Monetary valuation based on Willingness-to-pay (WTP) to avoid a loss:

Value of a Life Year (VOLY) due to air pollution = 50,000 €

Cancers 2M€/cancer, based on VSL = 1 M€ (VSL = “Value of Statistical Life” = WTP to avoid risk of an anonymous premature death; typical values used in

EU and USA 1-5 M€)

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CO2 of biological origin

IPCC and many practitioners of LCA do not count biogenic CO2

Absurd conclusions, e.g. the burning of tropical forests is no worse for global warming than their

preservation,No benefit from adding carbon capture to biofuel

power plants, etc

Correct method:Count each source and each sink

when and where it occursRabl A, Benoist A, Dron D, Peuportier B, Spadaro JV and Zoughaib A. 2007. “How to account

for CO2 emissions from biomass in an LCA”. Int J LCA 12 (5) 281.

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Impacts and Technologies evaluatedImpacts

1) Global warming (CO2, CH4, N2O)

2) NOx, SO2, PM etc (primary & secondary pollutants)

•Health (morbidity: ~ 30% of total cost mortality: ~65% of total cost, other than global warming)•Buildings & materials•Agricultural crops•Global warming•acidification & eutrophication (biodiversity)

3) Other burdens•Amenity (noise, visual impact, recreation)•Accidents•supply security

Technologies•Energy: coal, lignite, oil, gas, biomass, PV, wind, hydro, nuclear•Waste treatment: landfill and incineration•Transport: cars, trucks, bus, rail, ship, (planes)

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Loss of Life Expectancy (LE) due to Air Pollution

In EU and USA typical concentrations of PM2.5 around 20 - 30 g/m3 LE loss 8

monthsReasonable policy goal during coming

decades:reduction by about 50% LE gain about 4 months

To put this in perspective with other public health risks:

Smokers lose about 5 to 8 years on average

Rule of thumb: each cigarette reduces LE by about the duration

of the smokeAir pollution (in EU and USA) equivalent

to about 4 cigarettes/day

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Damage Cost per kg of Pollutant,(typical values for Central Europe)

and uncertainty (error bars and probability distribution)

15.2

5.2

3.4

1578

115

62

3.5

1600

185000000

3.8

39

200

80.0

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1.1

1E-11E+01E+11E+21E+31E+41E+51E+61E+71E+81E+9

Traffic,h=0m

PM2.5, rural

PM2.5, highway

PM2.5, Paris

Stacks,h=100m

PM10, rural

PM10, urban

PM10, Paris

Cadmium

Chromium VI

Nickel

Little h dependence

SO2, via sulfates

NO2, via nitrates

NMVOC

Arsenic

Lead

Dioxins

€/kg

Somewhat different numbers in different

publications, but within uncertainty

bounds(progress in the science of impact assessment)

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Damage Cost of CO2

Various estimates for 2xCO2

loss on the order of 1 to 2 % of gross world product

Cost per ton CO2

depends on discount rate and other controversial assumptions

especially “value of life” in developing countries (where most of the damage will occur)

For low discount rates mainstream estimates are around 10 €/tCO2

Report by Stern et al [2006]: ~ 85 €/tCO2

Study by Dept. of Envir. UK [2005]: ~25 €/tCO2

Valuations by ExternEExternE 1998:

18-46 €/tCO2 (“restricted range”, geometric mean 29 €/tCO2 )

ExternE 2000: 2.4 €/tCO2

ExternE 2004: 19 €/tCO2

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Simplified Analysis: the Uniform World Model (UWM)

Duni = p sCR/k = damage cost €/kg• p = unit cost (price) of endpoint • = average population density within 500 to 1000 km• sCR = slope of concentration-response function • k = depletion velocity (wet+dry deposition, transformation or decay)Also for secondary pollutants (if k includes transformation rate)

Exact for uniform distribution of sources or of receptors, by conservation of

matter Good within a factor of about 2 for stacks height >50

m

Correction factors for site and stack height:• no variation for globally dispersing pollutants such as CO2; • weak variation for As, Pb and dioxins because non-inhalation pathways dominate: ≈0.7 to 1.5;• weak variation for secondary pollutants: ≈0.5 to 2.0;• strong variation for primary pollutants: ≈0.5 to 5 for site, ≈0.6 to 3 for stack conditions (up to 15 for ground level emissions in big city).

UWM and more detailed simple models included in RiskPoll software

[free from www.arirabl.org]. Use EcoSense for “exact”

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Comparison UWM detailed model, World

Damage costs in € 2000 per kg

0.01

0.1

1

10

100

0.01 0.1 1 10 100Detailed model

Northern Europe Central Europe Sourthern Europe

Southeast Asia USA South America

Factor of two

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Site Dependence: Comparison UWM detailed model

For SO2. YOLL = years of life lost

0

1

2

3

4

5

6

0 50 100 150 200 250Stack Height [m]

D/Duni

0

5

10

YOLL/1000 tons

Porcheville (Paris)

Loire-sur-Rhone (Lyon)

Albi (Toulouse)

Martigues (Marseille)

Cordemais (Nantes)

Duni

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Results for Power PlantsTypical numbers for Central Europe [ExternE 2004]. Average price France ~7cents/kWh

0 2 4 6 8

Coal, 1995

Coal, after 2000

Oil, 1995

Oil, after 2000

Gas, after 2000

Nuclear, 1990s

cents/kWh

PM10 @ 11.7€/kg

SO2 @ 3.5€/kg

NOx @ 3.4€/kg

CO2eq @ 0.019€/kg

Cancers

Average price

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Results for ElectricityDamage costs of current and advanced systems, power plant + rest of energy chain

0

1

2

3

4

5

6

Lignite

Hard Coal

Hard Coal PFBC

Oil

Oil CC

Gas

Gas CC

LWR

PWR (centrifuge enr.)

Hydropower (alpine)PV panel (S-Europe)

PV integrated (S-Europe)

PV integrated future (S-Europe)

Wind onshore 800kW

Wind offshore 2MW

cogen diesel SCR 200kWe

cogen gas lambda=1, 160kWe

cogen gas lean burn 1MWe

External Costs (Euro cent / kWh)

Rest

Power Plant

Coal Oil Gas Nuclear

Hydro

Gas

Photovoltaic Wind Cogeneration

(all.exergy)

Diesel

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Results for Heating SystemsDamage costs of current and advanced systems, boiler + rest of energy chain

0.0

0.5

1.0

1.5

2.0

cond-mod <100kWcond-mod >100kW

mod <100kW mod >100kW

industrial >100kW

heavy oil, industrial 1MW

light oil, cond- non-mod 10kWlight oil, cond- non-mod 100kW

light oil, non-mod 10kWlight oil, non-mod 100kW

light oil, industrial 1MW

logs heater 6kW

logs 30kWlogs 100kW chips 50kW

chips 300kWSCR 200kWe

Mini 2kWe

lean burn 50kWe

lambda=1, 160kWelean burn 500kWe

lean burn 1MWe

air-water 10kW UCTE-el.

brine-water 10kW UCTE-el.air-water 10kW future CC-el.

brine-water 10kW future CC-el

air-water 10kW future nuclear-el.

brine-water 10kW future nuclear-el.

External Costs (Euro cent / kWh

th

)

Rest

Conversion unit

OilGas HPWood Cogeneration

(all.exergy)

Diesel

Gas

UCTE

El.

CC

El.

nuclear

El.

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comparison Incineration Landfill Variation with energy recovery assumptions

For energy recovery: E=electricity, H=heat, g=gas, o=oil, c=coal

Cf: private cost ~100€/t

Cf: private cost ~50€/t

But costs are not the only criterion!

Private cost Landfill ~50€/twaste

Private cost incinerator ~100€/twaste

13.1

15.9

8.7

15.7

21.2

4.5

12.8

10.9

10.8

10.1

0 5 10 15 20 25

Incineration, Partload Heat & Electricity (H=g&o,E=c&o)

Incineration, Partload Electricity (E=c&o)

Incineration, Baseload heat (H=g&o)

Incineration, Partload Heat (H=o)

Incineration, no energy recovery

Incineration, Baseload heat (H=o)

landfill, no energy recovery

landfill, Baseload Electricity (E=c&o)

landfill, Baseload Heat (H=g&o)

landfill, Baseload Heat (H=o)

€/t waste

LANDFILL OPTIONS

INCINERATOR OPTIONS

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Incineration, some detailed results•If electricity displaces nuclear (France), like no energy recovery.•Transport based on hypothetical 100 km.

Incineration, Baseload heat (H=g&o)

-25 -20 -15 -10 -5 0 5 10 15 20 25

Transport

Materials recovery

Energy recovery

Direct emissions

Total

€/t waste

PM

NOX

SO2

CO2

Trace

Incineration, no energy recovery

-25 -20 -15 -10 -5 0 5 10 15 20 25

Transport

Materials recovery

Energy recovery

Direct emissions

Total

€/t waste

PM

NOX

SO2

CO2

Trace

a) No energy recovery

b) Energy recovery to replace gas and oil

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Landfill, some detailed results•If electricity displaces nuclear (France), like no energy recovery.•Transport based on hypothetical 100 km.

landfill, no energy recovery

-25 -20 -15 -10 -5 0 5 10 15 20 25

Transport

Materials recovery

Energy recovery

Direct emissions

Total

€/t waste

PM

NOX

SO2

CO2+CH4

Trace

landfill, Baseload Heat (H=o)

-25 -20 -15 -10 -5 0 5 10 15 20 25

Transport

Materials recovery

Energy recovery

Direct emissions

Total

€/t waste

PM

NOX

SO2

CO2+CH4

Trace

a) No energy recovery

b) Energy recovery to replace oil

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Electric vehicle (EV)Funk K & A Rabl 1999. "Electric versus conventional vehicles: Social Costs and Benefits in France". Transportation Research Part D: Transport and Environment, Vol.4(6), 397-411.

Paris = most favorable site for EV because large city (10 million with suburbs) and nuclear electricity

Compare 3 versions of Peugeot 106 (gasoline, diesel and electric),

LCA, including production of vehicle and battery (NiCd)

Assume utilization 25 km/day gasoline, 45 km/day diesel, for 10 yr.

Compare €/km (life cycle cost)

for individual (private cost, including taxes but excluding pollution) and

for society (social cost, excluding taxes but including pollution)

EV not justified by environmental benefit,

unless battery cost and performance improve

remains valid with new results of ExternE and lower emissions of new vehicles:

diesel with particle filter has very low damage cost

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Hybrid vehicle, €/km in USARecent study for Toyota, by A. Rabl & J.V. Spadaro [2004]

Compare Toyota Camry, Corolla, RAV4 and Prius, and Honda Civic and Insight, all models of 2004

Hybrid versions: Prius and Insight (only hybrid), RAV4, Civic

LCA inventories based on studies by MIT and by Delucchi of UC Davis

For well-to-wheel analysis use GREET model of Argonne National Lab

LCA stages:

•Production of the materials needed for the vehicle•Assembly of the materials•Fuel feedstock•Fuel supply•Utilization of the vehicle•Disposal of the vehicle at the end of its life

(the only significant impacts of disposal are included by accounting for recycling in the production of the materials)

Damage costs of ExternE [2004] but adjusted for lower population density in USA

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Hybrid vehicle, vehicle production $/car

Comparison hybrid and conventional cars

Prius

0 10 20 30 40

Iron

Steel

Aluminum

Magnesium

Copper

Lead

Nickel

Glass

Plastics

Rubber

Fluids

Assembly

$/car

NOX SOX CO Pb PM10 CO2eq NMVOC

Camry

0 10 20 30 40

Iron

Steel

Aluminum

Magnesium

Copper

Lead

Nickel

Glass

Plastics

Rubber

Fluids

Assembly

$/car

NOX SOX CO Pb PM10 CO2eq NMVOC

Total about $180/car, no significant difference hybrid conventional

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Hybrid vehicle, well-to-wheel ¢/mile

Comparison hybrid and conventional cars

Prius (Tier2 emissions)

0.0 0.2 0.4 0.6 0.8 1.0

Fuel feedstock

Fuel supply

Driving

Damage [¢/mi]

PM10 (urban) PM10 (rural) SOx NOx CO2eq NMVOC CO

Camry (Tier2

0.0 0.2 0.4 0.6 0.8 1.0

Fuel feedstock

Fuel supply

Driving

Damage [¢/mi]

PM10 (urban) PM10 (rural) SOx NOx CO2eq NMVOC CO

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Can Avoided Damage Justify Cost of Developing PV?

Cost required to reach break-even (where PV becomes competitive)

and cost gap (=cost of reaching break-even - production cost at break-even),

as function of progress ratio (learning curve). Assumptions: current cumulative production n0 = 1 GWp, current unit cost c0 = 5 $/Wp, break-even unit cost cb =

1.0 $/Wp.

Ref.: “Prospects for PV: a learning curve analysis”. B van der Zwaan & A Rabl, Solar Energy, Vol.74(1), 19-31 (2003).

Log($/Wpk)

Log(cumul.prod.)

Break-evenCost gap

Log(c0)

Log(cb)

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Can Avoided Damage Justify Cost of Developing PV?, cont’d

cost gap (=cost of reaching break-even - production cost at break-even),

as function of progress ratio (learning curve) and avoided damage.

Assumptions: current cumulative production n0 = 1 GWp, current unit cost c0 = 5 $/Wp, break-even unit cost cb = 1.0 $/Wp.

Only costs up to break-even are includedReal benefits much larger because they continue after

break-even

Progress ratio, pr 0.7 0.75 0.8 0.85 0.9

Break-even cumulative production, nb (GWp) 23 48 148 957 39700

Break-even cumulative production, as % of 3300 GW, the present world capacity

0.7% 1.5% 4.5% 29.0% 1200%

Cost of reaching break-even, Cb ($ billion) 37 74 211 1240 46800

Cost of producing nb – n0, if unit cost were already at break-even, (nb–n0) cb ($ billion)

22 47 147 956 39700

Cost gap, Cb - (nb–n0) cb ($ billion) 15 27 64 288 7110

Cost gap (% of cost of reaching break-even) 41% 36% 30% 23% 15%

Avoided damage of nb–n0 (at 0.25 $/Wp, in $ billion)

5 12 37 239 9920

Avoided damage (% of cost gap) 37% 44% 58% 83% 140%Even the benefits up to break-even pay for much/most of the cost gap

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Conclusions

Damage costs are significant, especially for fossil fuels

Due to PM, NOx, SO2 & O3, and global warming

Applications

Energy policy: e.g. nuclear, gas or coal? Subsidies for renewables?Transport policy: e.g. how large is benefit of reducing traffic in cities?Waste treatment: incineration or land fill?

How much recycling of what?Regulations: optimal emission limits for power plants, vehicles, factories, agriculture, …Optimal level of pollution taxesOptimal level of tradable permits

Significant premium for clean energy!