Energy and Renewable Sources

External costs linked to energy production and conversion processes, either based on fossil fuels, or on uranium nuclear technology or on renewable energy sources, have been extensively analysed firstly within the EU research programme called ExternE (1992-1998) and then with other EU research projects (BeTa, NewExt, Needs), some of them still undergoing.

External costs generated by fossil fuel electricity production are mainly due to greenhouse gases emissions (responsible for man induced global climate change and relative expected impacts) and to air pollution health effects (local and regional effects). While valuation of greenhouse gases damages presents many scientific uncertainty factors (as to the sensitivity of climate to temperature increases, to environmental and social impact modelling, to equity weighting assumptions, etc.), valuation of air pollution damages gained a major level of reliance in the last decade. The air pollution external costs modelled by ExternE are mainly linked to health damages (cardio-circulatory diseases, respiratory diseases, cancers, minor simptoms) expected by population at risk (adults, children, old people), and to a less extent to crop reductions and to damages for buildings’ surface materials. Air pollution acidification and nitrogen effects on natural habitats have been analysed, but more research should be performed as to their economic valuation. Even if air pollutants emissions of energy conversion plants are the main impact factors, the level of their external costs is influenced by environmental and social context factors: the wind rose (wind direction and intensity), the extent and localization of the population exposed to air pollution (not only on the local scale, but also on the broader regional scale), the willingness to pay of the exposed population (in order to avoid the health risk associated with pollution). Under ExternE programme a EU wide national implementation of the methodology has been performed (ExternE National Implementation, 1997). The Italian case study (Fondazione Eni Enrico Mattei, 1997) measured the external costs of air pollution produced by thermo-electric plants used in the early nineties: they summed up to 1,3% of GDP (+ 0,3% if taking into account the CO2 associated damages, valued at 20 euro/tonn. CO2 emitted).

External costs are not only generated by fossil fuels. Also technologies using renewable sources may generate external costs, sometimes with non negligible values.
External costs of wind energy production may be linked to noise, to naturalistic effects (for example loss of a certain bird population due to shovels rotation), to landscape impacts associated to the dozens of towers needed to have enough power and to the building of access roads. A fact is that the highest wind potential is usually found on top of hills or mountains and at locations visible at far distances. On the positive side, visibility problem could be minor in case of low density population or of low tourism area. Moreover many people can even appreciate the wind plants effect on landscape (find a benefit). Environmental conflicts in wind plant localization could be expression of negative attitudes.
In the case of biomass based energy conversion, there may be non negligible health effects associated to the energy consumption needed for biomass production (crop production and conversion processes) and to biofuels combustion.
ExternE programme (1998) has not valued in economic terms neither the naturalistic nor the landscape effects of renewables, so it turns out that the external costs of several categories of renewable sources may be undervalued when transferred to precious landscape areas.
In the new plants decision making it is always suggested to involve stakeholders and to realise a contingent valuation in order to elicit preferences of population (and of tourists). May be it could come out that wind towers attracts visitors and sustainable commercial activities, as happened in many touristic island!

© 2006 - Andrea Molocchi