EPA researchers suggest US electricity consumers should be willing to pay 2-4x for emission-free alternatives to fossil fuel electricity due to health impacts
02 January 2013
US consumers of electricity should be willing to pay, on average, $0.24–$0.45/kWh—approximately 2–4 times current retail costs—for emission-free alternatives to fossil fuel electricity due to the cost of health impacts from fossil fuel electricity, according to a new analysis by a pair of researchers at the US Environmental Protection Agency (EPA) Clean Energy and Climate Change Office, Region 9.
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| National economic value of health impacts for fossil fuels by fuel type. This shows the calculated economic value of health impacts associated with various fossil fuels. The high (▲) and low (●) values are given by Laden et al. (2006) and Pope et al. (2002), respectively. Midpoint values are shown. Credit: Machol and Rizk. Click to enlarge. |
(According to the US Energy Information Administration (EIA), the US average retail price of electricity to the end consumer in the US in October 2012 was $0.1192/kWh, ranging from a low of $0.0835/kWh in Louisiana to a high of $0.3742/kWh in Hawaii.)
In a paper in press in the journal Environment International, Ben Machol and Sarah Rizk quantify the economic value of health impacts associated with PM2.5 and PM2.5 precursors (NOx and SO2) on a per kilowatt hour basis. They provide figures based on state electricity profiles, national averages and fossil fuel type.
Fossil fuel energy has several externalities not accounted for in the retail price, including associated adverse human health impacts, future costs from climate change, and other environmental damages.
...We find that the economic value of improved human health associated with avoiding emissions from fossil fuel electricity in the United States ranges from a low of $0.005–$0.013/kWh in California to a high of $0.41–$1.01/kWh in Maryland. When accounting for the adverse health impacts of imported electricity, the California figure increases to $0.03–$0.07/kWh. Nationally, the average economic value of health impacts associated with fossil fuel usage is $0.14–$0.35/kWh. For coal, oil, and natural gas, respectively, associated economic values of health impacts are $0.19–$0.45/kWh, $0.08–$0.19/kWh, and $0.01–$0.02/kWh. For coal and oil, these costs are larger than the typical retail price of electricity, demonstrating the magnitude of the externality.
When the economic value of health impacts resulting from air emissions is considered, our analysis suggests that on average, US consumers of electricity should be willing to pay $0.24–$0.45/kWh for alternatives such as energy efficiency investments or emission-free renewable sources that avoid fossil fuel combustion. The economic value of health impacts is approximately an order of magnitude larger than estimates of the social cost of carbon for fossil fuel electricity. In total, we estimate that the economic value of health impacts from fossil fuel electricity in the United States is $361.7–886.5 billion annually, representing 2.5–6.0% of the national GDP.
—Machol and Rizk
Resources
Ben Machol, Sarah Rizk (2012) Economic value of US fossil fuel electricity health impacts, Environment International doi: 10.1016/j.envint.2012.03.003
In other words, people should be ready to buy nuclear electricity at 11¢/kWh wholesale and consider it cheap.
Posted by: Engineer-Poet | 02 January 2013 at 05:46 PM
yeah, um I'm all for green and all... but if my electric bill goes up by a factor of 5... I doubt I could afford it. ~$300 -> $1500 would not be cool...
I don't think the populace could afford that big of a hike, I know tons of old people freeze and sweat to death because they already cannot afford the bills.
We used to have Hydro, most of our electricity is Coal/ Nat Gas, and there is a Nuclear Reactor about 2 hours away... not the greenest, but we do have large wind farms in a neighboring state 30 mins away.
Posted by: CheeseEater88 | 02 January 2013 at 07:18 PM
Consider "negawatts" instead of megawatts. Buildings in America consume more fossil fuel energy than transportion, and they shouldn't have to. Unlike cars, you CAN run a house on solar energy collected on the structure. Even if you discount PV generated electricity as being too costly you could still use solar for heating, daylighting, ventilation and hot water.
Passive solar my friend - Google it.
Posted by: ai_vin | 02 January 2013 at 09:21 PM
What kind of double wishy-washy is this?
" ... Researchers suggest ... consumers should be willing to pay ... "
I suggest (actually, I KNOW) US citizens should be willing to buy 2-4x LESS unhealthy fast foods.
I suggest (No; we KNOW) all US drivers should be willing to avoid rushing the the next red light - but they do not.
And maybe consumers should be, but I doubt that many ARE willing to pay 2-4x for emission-free fuels.
Practical passive solar is still "just around the corner" and has been advanced by many, including Paulo Soleri at Arcosanti, which has been in construction since 1970.
Google it.
But I agree; passive solar should be more popular.
Posted by: ToppaTom | 02 January 2013 at 10:06 PM
Americans likely would want to fire 2-4x as many researchers next year after that;/
Posted by: wintermane2000 | 03 January 2013 at 01:30 AM
Your EPA in action. And they wonder why many question the EPA decisions.
Posted by: Jimr | 03 January 2013 at 04:19 AM
Almost everyplace in the US has very good air quality, Those places that sometimes have poor air quality do not have coal plants but have lots of people driving cars.
If California drivers should be willing to drive 2-4x LESS by doing something as simple as car pooling.
Posted by: Kit P | 03 January 2013 at 05:28 AM
"Almost everyplace in the US has very good air quality" - which only means the EPA has been doing its job right.
You may not be able to remember what the air/water quality was like before the EPA began operation in the 70s, but I do.
Posted by: ai_vin | 03 January 2013 at 07:39 AM
Very few posters seem to be willing to change their ways to save the economy, democracy, the environment, their health, their anything....but everybody wants to be President, millionaire or billionaire, have many 4+ ton vehicles, own a xxM$ home....and not pay any taxes. Reminds me of ..........?
Greener e-power at 2X to 5X current e-power price (about $0.12/kWh) is ridiculous. We are trying to sell green Hydro to East Coast States @ under $0.05/kWh (at about 40% of current average price) and they will not buy. They want it at $0.01/kWh and resell it at over $0.12/kWh for a huge profit?
Future Hydro/Wind combo will cost more ($0.06/kWh to $0.09/kWh and I doubt that we will continue to sell it South of the Border at a loss, unless it is off-peak excess energy?
Ontario's nuclear energy will soon cost more than $0.12/kWh to refinance the $120+B required to overhaul the 20 old Candu sites and/or to build 15 to 20 new nuclear power plants. .
Posted by: HarveyD | 03 January 2013 at 07:50 AM
Why hasn't anyone suggested medicine charge 2-4X less?
After all, isn't "..do no harm(robbery, fraud, murder,..) in the original oath?
Repeatedly, I have been assigned MRIs at $2500 EACH, with another non-hospital charging $800. Drugs varying by 300% in price. Toe surgery at OVER A $100/PER MINUTE.
Doctors who alibi each other. H1C blood tests at $450 that can be done for $15 through a mailing at Walmart(same certified results), but did the doctor or staff mention this?
Posted by: kelly | 03 January 2013 at 08:02 AM
Solar and wind electricity will not cost 2-4x current prices. If phased in gradually, mass production will eventualy bring the cost of RE to be on par with fossil fuel energy.
@kelly,
Sorry that you had to pay $2,500 for MRI, while many small imaging places charge only $400 for an MRI w/o contrast, or $550 with and w/o contrast. HA1C cost a few dollars raw cost for each test kit. Shop around for low-cost podiatrist instead of settle with anyone.
What we really need is a health care reform which will assure free-market competition in the health care business, as I had discussed with you before. Health care consumer should be able to shop for the most cost-effective health care available, by means of the internet. Everyone should have a health saving account, or health credit account to pay for fee-for-service health care, with internet database of cost for each provider so that best-value providers can be selected.
Posted by: Roger Pham | 03 January 2013 at 10:50 AM
"Shop around for low-cost podiatrist instead of settle with anyone."
R-P, have you ever really tried to medically "shop around"? When did you EVER get any significant medical estimate, WITH ALL "medical codes" LISTED so you could actually compare medical cost estimates at/with different "caregivers"?
NEVER!!
In fact, to even QUESTION the primary physician's buddy "specialist" recommendation implies disobeying "doctors orders".
I've traveled to distant states JUST TO GET A SECOND OPINION of STANDARD medical lab results and x-rays - only to be told NO!!
Of course, if I paid for retaking the prior day's tests and x-rays - they might give an opinion on these different tests. WTF..'..settle with anyone.'
The EPA researchers have less to gain with these pro-EV data results than fudging the opposite and pocketing oil company "funding and appreciation."
Posted by: kelly | 03 January 2013 at 11:28 AM
Kelly, Don't feel alone. A few years ago my first wife suffered from cancer. Each chemo trip wa s over $5000. One time they were to backed up and sent us to the hospital for the chemo.the total price was about $800. In checking with company ins. Rep. I suggested using hospital rather than center. Their response was " we have to pay for the uninsured somehow".
Posted by: Jimr | 03 January 2013 at 12:17 PM
Jimr, same medical treatment - $5,000 vs $800 - but only the $5,000 can be charged the sick patient.
Par for US healthcare.
JFK was murdered 30 miles from a then no longer bankrupt Texas helicopter plant and Nixon authorized HMOs - codified by our "representatives", now with a consistent 15% approval rating.
Imagine having a 'pre-condition', being un-insurable, and being required to produce the medical treatment $5,000 IN CASH, IN ADVANCE, for EACH treatment.
US wealth distribution inequity is worse than the middle ages of kings, surfs, and slaves. We even have pension thieves as Presidential candidates, at $54,700/DAY even when retired.
Not really consistent with the "in God we trust", "moderation in all things", "nation of laws", "all men created equal" pillars of American society.
The US billionaire is worth(entitled?) a thousand millionaire families, or a million "could be fed, educated, and productive" poor families.
Samuel Colt 'equalized' all men, but it seems wealthy security improved.
Maybe http://www.gizmag.com/trackingpoint-precision-guided-firearms-scopes-digital/25264/ will find it's market with the 99%.
Most of 100's of millions of the defrauded US middle class or the medically un-insured or the chronically ill or the "..should be willing to pay 2-4x for emission-free alternatives to fossil fuel electricity due to health impacts" are spied on, but they ain't all dead yet.
Posted by: kelly | 03 January 2013 at 02:24 PM
What you need is single payer healthcare. You'll pay less for better care;
http://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_(PPP)_per_capita
Britian's NHS, at half the cost of yours, is so popular they did a 15 min long musical salute to it during the opening ceremony of the Olympics - featuring more than 600 real NHS staff and patients.
http://www.sundaytimes.lk/120729/sunday-times-2/a-salute-to-nhs-and-bumbling-mr-bean-brings-down-the-house-7285.html
Posted by: ai_vin | 03 January 2013 at 02:25 PM
@ai vin,
A single payer would save cost and improve quality only when the payer merely act as a credit card company, like VISA, etc. Payment must come from each patient's fund account when authorized by the patient only. In this way, there will be real competition amongs the providers to provide higher quality at lower cost.
@kelly,
Now, how can a patient be able to choose among providers as to who is the most cost-effective, according to his/her budget?
This is done by requiring each provider to submit diagnosis codes (ICD-9) and procedure codes as well as itemized charges for each procedure related to a diagnosis code, when sending a credit card billing to a centralized payer. This data will be used for data mining purpose in order to tabulate as to which providers within a zipcode area will be the most cost effective and most experienced for a particular diagnosis.
Let's say you have headaches and want to see a provider who has seen enough headaches cases and provide the most cost-effective care. You log into a website which will search the data base to see which provider caused the least amount of overall cost for the diagnosis of headaches...
For example, Dr. A may charge high office visit fee, yet due to his/her experience, may order fewer tests and less expensive tests, and get you well faster...vs. Dr. B who charges lower office visit fee but order more expensive tests and more costly medicines vs. Dr. C who charges very low office fee, and who did not order any test but the pt. got worse and needing hospitalization which will cost ten times more...or needing to see other Drs. before getting well, thus rung up a must higher overall costs for a given diagnosis code...
Current system is totally broken and is way beyond repair. Health care currently cost 3x - 10x more than it ought to cost based on real competition. Don't expect ACA to deliver any of its promises even after totally bankrupting the USA. ACA mandates more insurance and more red tapes, none of that will reduce cost.
The Canadian and European model of single payer has to ration health care and provide slower access and lower quality.
Posted by: Roger Pham | 04 January 2013 at 12:22 AM
So many of America's problems have proven solutions.
ai vin linked the clearest healthcare solution: http://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_(PPP)_per_capita
The world/US solved the banking/finance crisis after the Great Depression for fifty years - STRICT REGULATIONS - LAWS to imprison financial thieves.
"LET THE BULLS RUN" Republicans deregulated, the Savings and Loan scandals immediately ensued and now a ongoing global financial meltdown we all suffer and may NOT survive.
The US solved the terrorist problem - stay out of it.
So the CIA Bush, not the Texas National Guard(TNG) one, frees Gulf Oil, but occupies Muslim holy places and "no fly zones" permanently. Then, in defense, Al-Qaeda is formed and America is targeted.
Naturally, US politicians respond by crushing the US Constitution and Bill of Rights(Patriot domestic spying Act, FISA, indefinite detention, Act of War drone strikes(on our children's lives - that one will "..come around.."), 'enhanced interrogation', etc, ...
Where the CIA Bush was too stupid for a Iraq regime change, the TNG Bush wasn't.
No-bid contracts, no WMD wars, more $trillions wasted, and the domestic Texas and non-Democrat terrorists have middle class America financially on the ropes, or at least unable to afford luxuries like their health.
This article included medical expense and found fossil fuel prices actually ~3X higher.
This is likely a vast understatement.
Posted by: kelly | 04 January 2013 at 07:16 AM
http://www.youtube.com/watch?v=GPNWX-aIMXk&list=PLC07754057616F134
Posted by: ai_vin | 04 January 2013 at 07:26 AM
al vin, thank you for the links.
I have 4 more to watch, but the consistent lies of Fox "news" and the fact that ~90% of the British like their universal healthcare, at half the US price, seems clear.
Posted by: kelly | 04 January 2013 at 09:00 AM
ai_vin.
The EPA and friends have succeeded in cleansing the Air and Water over the USA. So declare victory and spend the Air and Water Quality Dividend elsewhere. Just like we do with the de-mobilizing military after a War and the consequent "Peace" Dividend.
Cut the EPA to the bone, sufficient to maintain our clean Air and Waters and turn our attention to other needs. Furthermore we can stop dreaming up more dystopias for People who "should" and "could" do more when in fact they have ALREADY done all that is necessary.
Posted by: D | 04 January 2013 at 11:55 AM
Yes D, USA has done a lot in the last 30+years. Obesity, brain disorders, Cancers, Diabetes and many other serious diseases have about double. The average life expectancy has stopped to grow and is going down in many areas.
The middle class and the poor are getting a lot poorer. Millions have last their home and their job. The national debt has multiplied.
Many would doubt that USA has already done all that is necessary to go forward instead of backward.
Posted by: HarveyD | 04 January 2013 at 12:49 PM
Posted by: Engineer-Poet | 04 January 2013 at 12:57 PM
Oh, wait, you were being a bit too didactic there. You are right. However, Al Qaeda was formed around 1988, long before the Kuwait invasion etc.
Posted by: Engineer-Poet | 04 January 2013 at 01:00 PM
E-P, Al Qaeda was fighting Commie Russia, until February 28, 1991 when CIA Bush announced a ceasefire and that Kuwait had been liberated from Iraq in the 1st Gulf War.
If fighting had had been allowed through that weekend,
Sadam's Republican Guard(but not Bush's) would have been fully destroyed.
No Sadam, no US Middle East occupation, "no fly zones", no 9/11, no 2nd, 2003 -2011 Gulf War.
But Bush and the rest of the neo-Cons want oil occupation, subsequent terror, war, domestic surveillance, no-bid Federal contracts, and an all powerful Presidency.
Watch, already neo-Con Republicans are staging a 3rd Bush %error%#t, military service - Florida election fraud - for the US Presidency.
Posted by: kelly | 04 January 2013 at 03:57 PM
@kelly,
Sadam was propped up by the West to counter Iran. However, Sadam committed two sins to the West:
1) Nationalization of Iraqi oil resources,
2) Invaded Kuwait in order to export more oil during time of oil glut, potentially lowering oil prices even more.
So, Sadam must be stopped from exporting oil via Kuwaiti ports during an oil glut period, hence the first Gulf war was intended to accomplish just that. But, Sadam must be left in power while an Iraqi oil embargo be maintained to avoid further depression in oil prices.
However, when oil was in short supply during the period prior to the second Gulf war, then the vast Iraqi oil reserve looked very tempting, and Sadam must be driven out so that the Western oil companies will have access to these highly profitable oil reserve.
When the American voters (or was it the Supreme Court?)entrusted the oil men to run the govenment, that's what America would get. A very natural and predictable outcome!
Posted by: Roger Pham | 04 January 2013 at 11:04 PM