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While coal is touted as a cheap source of power, burning coal to generate electricity produces more than $62 billion a year in "hidden costs," according to a new National Academy of Sciences report released Monday.
The report, by the academy's National Research Council, focused on premature deaths caused by air pollution from coal-fired power plants. Study authors said the narrow focus clearly underestimated other costs of the nation's continued reliance on coal.
The $62 million in hidden costs of coal amounted to half of the $120 million in such costs identified across the electricity, heating, and transportation sectors examined in the report.
But in the electricity sector alone, coal produced about half of the nation's electricity, but accounted for nearly all of the hidden costs.
"Coal is the major player here," said Carnegie Mellon University President Jared Cohon, chairman of the team that wrote the 374-page report, "Hidden Costs of Energy."
Burning natural gas generated far less damage than coal, both overall and per kilowatt-hour of electricity generated, the report said. The life-cycle damages of wind power are small compared to coal and natural gas, the report said.
Requested by Congress, the report tried to assess what economists call "external effects" caused by various energy sources over their entire life cycle.
Because these effects are not reflected in energy prices, government, businesses and consumers may not realize the full impact of their choices, said a news release announcing the study.
"When such market failures occur, a case can be made for government interventions - such as regulations, taxes or trade-able permits - to address these external costs," the release said.
A committee of experts that wrote the report focused on putting dollar figures on the damage of major air pollutants, primarily sulfur dioxide, nitrogen oxides and particulate matter, generated by energy production and use.
In a section on coal, the study reported that in 2005, the total annual "external damages" from these air pollutants created by burning coal at 406 power plants were about $62 billion.
That amounts to about 3 cents for every kilowatt-hour of energy produced. By comparison, the average retail price of electricity in the U.S. is about 12 cents per kilowatt-hour.
The report found wide disparities among power plants, with some producing just $8.7 million in damages and others $575 million.
Overall, half of the plants with the lowest damages together produced one-quarter of electricity, but accounted for just 12 percent of the damages. On the other hand, the 10 percent of plants with the highest damages also produced one-quarter of the power, but accounted for 43 percent of the damages.
The report also found that, by 2030, coal-related hidden costs would drop to about 1.7 cents per kilowatt-hour because of expected pollution reductions.
Panel members did not try to quantify damages from coal-related climate change, but said that previous studies estimated those to range from 0.1 to 10 cents per kilowatt-hour.
Maureen L. Cropper, a panel member and professor of economics at the University of Maryland, noted that the study also did not examine "upstream" costs of coal-fired power - such as damage from mountaintop removal mining - or "harm to ecosystems" from other impacts, such as disposal of toxic power plant ash.
"We didn't really quantify or monetize those anywhere," Cropper said. "So, for example, if you take the waste from a scrubber and dump it in the Monongahela River, we didn't include that."
Reach Ken Ward Jr. at firstname.lastname@example.org or 304-348-1702.
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