Monetising Air Pollution Benefits of Clean Energy Requires Locally Specific Information

Mandana Mazaheri,Geoffrey G Morgan,Bin Jalaludin,Yvonne Scorgie,Richard Broome ,Matthew Riley

doi:10.3390/en14227622

Abstract

Meeting the Paris Agreement on climate change requires substantial investments in low-emissions energy and significant improvements in end-use energy efficiency. These measures can also deliver improved air quality and there is broad recognition of the health benefits of decarbonising energy. Monetising these health benefits is an important part of a robust assessment of the costs and benefits of renewable energy and energy efficiency programs (clean energy programs (CEP)) and a variety of methods have been used to estimate health benefits at national, regional, continental and global scales. Approaches, such as unit damage cost estimates and impact pathways, differ in complexity and spatial coverage and can deliver different estimates for air pollution costs/benefits. To date, the monetised health benefits of CEP in Australia have applied international and global estimates that can range from 2–229USD/tCO2 (USD 2016). Here, we calculate the current health damage costs of coal-fired power in New South Wales (NSW), Australia’s most populous state, and the health benefits of CEP. Focusing on PM2.5 pollution, we estimate the current health impacts of coal-fired power at 3.20USD/MWh, approximately 10% of the generation costs, and much lower than previous estimates. We demonstrate the need for locally specific assessment of the air pollution benefits of CEP and illustrate that without locally specific information, the relative costs/benefits of CEP may be significantly over- or understated. We estimate that, for NSW, the health benefits from CEP are 1.80USD/MWh and that the current air pollution health costs of coal-fired power in NSW represent a significant unpriced externality.

Highlights

Limiting global warming to well below 2 ◦ C requires substantial changes to the way that we generate and use electricity [1,2,3,4]
We modelled energy generation outlook for the Australian National Electricity Market (NEM) referencing the scenarios and assumptions used by the Australian Energy Market
We began by quantifying the health burden due to long-term exposure to current coal-fired power station emissions, focusing on all-cause premature mortality from longterm exposure to PM2.5 as this has been found to be the most health endpoint responsible for the majority of health costs, i.e., prior analyses suggest that the value of avoided premature deaths accounts for over 95% of the total value associated with mortality and morbidity endpoints [53]

Summary

Introduction

Limiting global warming to well below 2 ◦ C requires substantial changes to the way that we generate and use electricity [1,2,3,4]. Carbon capture and storage of emissions from fossil fuel generation can contribute to decarbonisation, and bio-energy carbon capture and storage is likely to be a viable contribution in achieving negative emissions [1]. These measures act to reduce toxic air pollutants either directly, or through reducing the emission of pollutant precursors [5]. Commercial and industrial energy efficiency has been a focus of many national and sub-national emissions reduction programs [9,10,11]. More efficient industrial processes and manufacturing can contribute significantly to decarbonising the electricity supply [13,14,15]

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