Monetising Air Pollution Benefits of Clean Energy Requires Locally Specific Information

Mandana Mazaheri, Yvonne Scorgie, Richard A. Broome, Geoffrey G. Morgan, Bin Jalaludin and Matthew L. Riley
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Mandana Mazaheri: New South Wales Department of Planning, Industry and Environment, Parramatta 2124, Australia
Yvonne Scorgie: New South Wales Department of Planning, Industry and Environment, Parramatta 2124, Australia
Richard A. Broome: New South Wales Ministry of Health, Health Protection NSW, Sydney 2060, Australia
Geoffrey G. Morgan: University Centre for Rural Health, School of Public Health, University of Sydney, Lismore 2480, Australia
Bin Jalaludin: School of Public Health and Community Medicine, University of New South Wales, Sydney 2006, Australia
Matthew L. Riley: New South Wales Department of Planning, Industry and Environment, Parramatta 2124, Australia

Energies, 2021, vol. 14, issue 22, 1-14

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.

Keywords: clean energy; energy efficiency; air pollution; health benefits (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
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