permaculture

[Victor Guest <vic@daena.eepo.com.au>]

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Vic
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                  ENVIRONMENTAL DAMAGE VALUATION
                               AND
                        COST BENEFIT NEWS


VOLUME IV # 4                                         APRIL, 1997


                             CONTENTS


       ENERGY

THE SOCIAL COSTS OF ELECTRICITY
PROVIDING ECONOMICALLY EFFICIENT BIOMASS CROPS


       WATER

WETLANDS MITIGATION BANKING
MOBILE HOME PARK WASTEWATER VIOLATION FINES
THE SOCIETAL VALUE OF WATER
NEW ENGLAND FISHING LIMITS INSUFFICIENT


       GENERAL

CV STUDY MEETS BLUE RIBBON PANEL'S TEST
ECOLOGICAL TAX REFORM: CARBON TAXES IN NY
NEW ESTIMATOR FOR CONTINGENT VALUATION


       AIR

PROJECTION OF MARKET PRICES FOR AIR EMISSIONS


       NON-ENVIRONMENTAL COST BENEFIT NEWS

COMPUTER ASSISTED DECISION SUPPORT FOR DRUGS
HOSPITAL DRUG REACTIONS
DEADWEIGHT LOSS OF CHRISTMAS
U.S. SOCIAL WELL-BEING AT 25 YEAR LOW IN 1994
COSTS AND BENEFITS OF HOME FORECLOSURES




                             ENERGY


THE SOCIAL COSTS OF ELECTRICITY


In "The Social Costs of Electricity: Do the Numbers Add Up" Alan
J. Krupnik and Dallas Burtraw review and compare attempts to
estimate externalities resulting from the generation of
electricity.  The paper also provides a synthesis that can help
reduce the cost of these applications in the future.

Six studies are considered.

 1) Regional Economic Research (RER, 1991) calculated damages
 associated with airborne pollutants for the California Energy
 Commission on a project and site specific basis.  Analysis was
 limited to generation activities.

 2) National Economic Research Associates (NERA, 1993) estimated
 damages from electric utility resource selection for the Nevada
 Power Company.

 3) Triangle Economic Research (TER, 1995) developed damage per
 ton estimates for adding a combination of a new coal plant and
 several natural gas combined cycle plants in 2006.  It
 estimated hourly damages at the zip code level and used Monte
 Carlo simulation techniques to express uncertainty.  Analysis
 was limited to generation activities.

 4) Oak Ridge National Laboratories / Resources for the Future
 (Lee et. al., 1995)  studied damages from six generation
 technologies (coal, oil, gas, hydro, nuclear, and biomass) in
 Oak Ridge, Tennessee and northern New Mexico for the U.S.
 Department of Energy.  All stages and pollutants were
 considered initially, but many pathways were eliminated. 
 Uncertainty was expressed through Monte Carlo simulations.  

 5) European Commission (EC, 1995) estimated externalities for
 nine fuel cycles (coal, lignite, biomass, nuclear, oil, natural
 gas, photovoltaic, hydro and wind) for West Burton in the U.K.
 and Lauffer in Baden Wurttemberg in Germany.  Uncertainty was
 described qualitatively through expert judgments. 

 6) Hagler Bailly with the Tellus Institute (HB, 1995)  built a
 computer model (EXMOD) to estimate damages  from new and
 repowered generation plants in the New York Area.

EXMOD and the TER study were discussed in the Winter/95 and
September/96 issues of EDV&CBN.

The Table below presents key facts regarding the major models


COMPARISON OF APPROACHES


Study                  Lee          EC      Hagler            TER
                                           Bailley

Site             Knoxville     Lauffen      Albany   Metro Fringe
                        TN     Germany    New York      Minnesota

Scenarios                 New 1990 coal plant      New 2006 plant
                                                       coal & GCC

Fuel Cycles            C o m p r e h e n s i v e  Coal & gas only

Pathways               C o m p r e h e n s i v e      Air,health,
                                                      visibility,
                                                  materials,crops
Local Area     80km radius     100 km2  50km radius   800x700 km

Domain          Eastern US      Europe       NE US     Minnesota,
                                         14 states   W. Wisconsin
                                                     S. So.Dakota

Plant Characteristics:
 Capacity            500MW      690MW        300MW          400MW
 Utilization           75%                     65%
 Lifetime         40 years 

Net emissions (g/kWh):
 SO2                  1.58       0.80         1.74            Not
 NOX                  2.68       0.80         1.90       provided
 Particulates         0.14       0.18         0.14

Stack Parameters:
 Height               150m       240m         150m           137m
 Diameter             9.4m        10m           4m           5.6m
 Temperature                                  400K  
 Velocity                                    30m/s

Air Modeling:
 Ozone             OZIPM-4  KRAMM-DRAIS       EKMA     Regression
                                                            Model
 PM10,SO2,No2,Pb     ISCLT   Gaussian       ISC2LT         ISCST2

Population:
 Local             866,000  3,800,000      638,000      6,400,000
 Total         193,000,000  477 mill.   93,000,000      6,400,000

COMPARISON OF APPROACHES (continued)

Study                  Lee          EC      Hagler            TER
                                           Bailley

Value of Statistical
 Life         $3.5 million $3.25 mill.  $3.3 mill.
  if > 65                               $3.0 mill.
  if < 65                               $4.0 mill.

Discount Rate           5%          3%  5% default              ?

Base Year             1989        1989        1992           1993

Uncertainty    Monte Carlo Qualitative        Beta    Monte Carlo
                                      Distribution  

Unique Advances:
               Distinction       Noise        User   Acute health
                   between     forests    friendly valuation from
               damages and   materials    computer  meta analysis
             externalities   inventory       model     and health
                                       mercury-health       index


The damages for each of the fuel cycles are "small", only a few
percent of private generation costs.  They are also small
relative to estimates from earlier studies, such as Pace (1990),
which found damages for coal of 60 mills/kWh.  One mill equals
$0.001.  They are also small with respect to "adders" in use in
many states in resource planning, which range from 10 to 12 mills
per kilowatt-hour for coal.  Damages are small, partly because
new plants are subjected to New Source Performance Standards and
strict siting processes.The table below summarizes the results.


             MEAN DAMAGES FROM ELECTRIC FUEL CYCLES
                           (mills/kWh)

New Plant Type                  Lee     EC      HB    Private
                                                        Costs

Pulverized Coal                 1.3   19.0     2.9      54-64
Nuclear Pressure Water Reactor  0.3    0.3     0.2  
Gas CCGT                        0.2    0.9     0.3      35-48
Oil 
  Low Emissions Boiler          0.2            
  Steam Boiler                  1.2            
  Combustion Turbine                  14.9      
  Oil Distillate Turbine                       1.7  
Biomass                         1.7     NE     4.2      47-60
Occupation Health Included      Yes    Yes       
Road Damage?                    Yes            Yes  
SO2 Damages?                           Yes       


Alan J. Krupnik and Dallas Burtraw  "The Social Costs of
Electricity: Do the Numbers Add Up"  Resources for the Future
Discussion Paper 96-20  May, 1996  1616 P Street, NW  Washington,
DC  20036  (202) 328-5000  http://www.rff.org

William R. Cline (1992) Global Warming: The Economic Stakes
(Washington, D.C.) Institute of International Economics

European Commission  (1995)  Externalities of Energy: ExternE
Project.  For the Directorate General XII, Prepared by
Metroeconomica, CEPN, IER, Eyre Energy-Environment, ETSU, Ecole
des Mines

S. Fankhauser (1993) Global Warming Damage Costs - Some Monetary
Estimates, CSERGE  GEC Working Paper 92-29, University of East
Anglia

Hagler Bailly Consulting, Inc.  (1995)  The New York State
Externalities Cost Study (Dobbs Ferry, New York)  Oceana
Publications

R. Lee (1995) Externalities Study: Why Are the Numbers Different?
Draft Paper prepared for the Third International Workshop on
Externality Costs, Ladenburg, Germany, May 27-30

R. Lee, A.J. Krupnick, D. Burtraw, et.a l. (1995) Estimating
Externalities of Electric Fuel Cycles: Analytical Methods and
Issues, Estimating Externalities of Coal Fuel Cycles and
additional volumes for other fuel cycles (Washington, D.C.),
McGraw-Hill/Utility Data Institute

National Economic Research Associates, Inc.  (March, 1993) 
External Costs of Electric Utility Resource Selection in Nevada,
prepared for Nevada Power Company, Cambridge, Mass.

Pace University  (1990)  Environmental Costs of Electricity 
Richard Ottinger, ed. (White Plains, New York  Oceana Press)

R.S.J. Tol (1995)  "The Damage Costs of Global Warming
Emissions," The Dutch Coal Fuel Cycle, ExternE Project,
forthcoming

Regional Economic Research Inc. (1991) Valuing the Environmental
Impacts of Alternative Energy Resources, prepared for the
California Energy Commission, Sacramento, California, prepared in
San Diego, California

Triangle Economic Research (1995)  Assessing Environmental
Externality Costs for Electricity Generation, prepared for
Northern States Power Company, Minnesota  Durham, N.C.


PROVIDING ECONOMICALLY EFFICIENT BIOMASS CROPS


In "Biomass Fuel from Woody Crops for Electric Power" Robert
Perlack, Lynn Wright, Michael Huston, and William Schrammin note
that the economic feasibility of sustaining a biomass crop is
dependent on feedstock production cost, productive efficiency,
production costs, and capital conversion technology.  Feasibility
studies tend to show that plantation-grown biomass-to-electricity
projects can be financially viable if local conditions are
favorable and the cost of conventional power supplies is high.
Location           Feedstock cost     Average Productivity
                       ($/GJ)            drytonnes/ha/yr

U.S. mainland       $1.90 - $2.80          10 - 15.5
Hawaii              $2.06 - $3.20        18.6 - 22.4
Portugal                $2.30               15.0
Sweden                  $4.00             6.5 - 12.0
Brazil (Northeast)  $0.97 - $4.60         3.0 - 21.0
China (Southwest)       $0.60                 8
Philippines         $0.42 - $1.18            15


Robert D. Perlack, Lynn L. Wright, Michael A. Huston, William E.
Schramm, Biofuels Feedstock Development Program, Energy Division,
Environmental Sciences Division Oak Ridge National Laboratory.
Oak Ridge, Tennessee  37831-620 Prepared in collaboration with
Winrock International, Biomass Energy Systems and Technology
Project "Biomass Fuel from Woody Crops for Electric Power
Generation" ORNL-6871", September 21, 1995 modified on October
21, 1996 for the U.S. Department of Energy under contract DE-AC05-84OR21400
Kenneth Acks, Editor and Publisher

ENVIRONMENTAL DAMAGE VALUATION & COST BENEFIT NEWS (EDV&CBN)

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