An accounting of the external environmental costs of coal in Inner Mongolia using the pollution damage method

Abstract

Although coal makes substantial contributions to economic development, it also causes negative impacts on the ecological environment. To assess the real costs associated with the environmental degradation caused by the coal industry, this paper calculates the external environmental costs of coal in Inner Mongolia by applying the pollution damage method to the three phases in the life cycle of coal: production, transportation and utilization. Based on the environmental pollution and ecological damage caused by coal-related pollutants, this paper first establishes an index system for calculating the external costs associated with the coal industry and a research framework. A model to account for the external costs is then constructed on the basis of the index system to fully reflect the external costs associated with the coal industry. The results demonstrate that the total external environmental cost of coal in the region is 87.373 billion yuan. In detail, the environmental costs associated with the production, transportation and utilization of coal are estimated to be 17.845 billion yuan, 27.551 billion yuan and 41.977 billion yuan, respectively. During the production of coal, air pollution and the loss of value of aquatic ecosystems account for large proportions of the environmental cost, namely 21.78% and 42.67%, respectively. During the transport of coal, the external cost to the environment caused by seaway-based transportation is 12.369 billion yuan, which accounts for 44.89% of the total cost of transportation. Finally, during the utilization of coal, coal combustion causes the greatest damage to human health. These health-related losses are valued at 230.82 billion yuan, which accounts for 54.99% of the total utilization cost.