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Pages 3-21

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From page 3...
... Beneficial or negative effects that are not reflected in energy market prices are termed "external effects" by economists. In the absence of government intervention, external effects associated with energy production and use are generally not taken into account in decision making.
From page 4...
... We evaluated each of these technologies over their entire life cycles -- from fuel extraction to energy production, distribution, and use to disposal of waste products -- and considered the external effects at each stage. Estimating the damages associated with external effects was a multistep process, with most steps entailing assumptions and their associated uncertainties.
From page 5...
... In particular, the committee did not monetize impacts of criteria air pollutants on ecosystem services or nongrain agricultural crops, or effects attributable to emissions of hazardous air pollutants. In any case, it is important to keep in mind that the individual estimates presented in this report, even when quantifiable, can have large uncertainties. In addition to its external effects in the present, the use of fossil fuels for energy creates external effects in the future through its emissions of atmospheric greenhouse gases (GHGs)
From page 6...
... In other words, specific comparisons showed that the source-andeffect landscape was more complicated than the averages would suggest. Damages Unrelated to Climate Change  The aggregate damages associated with emissions of SO2, NOx, and PM from these coal-fired facilities in 2005 were approximately $62 billion, or $156 million on average per plant. However, the differences among plants were wide -- the 5th and 95th percentiles of the distribution were $8.7 million and $575 million, respectively.
From page 7...
... The figure on the top of each bar vector editable is the average damage across all plants of damages associated with sulfur dioxide, oxides of nitrogen, and particulate matter. Damages related to climate-change effects are not included.
From page 8...
... The sample of 498 gas facilities produced $740 million in aggregate damages from emissions of SO2, NOx, and PM. Average annual damages per plant were $1.49 million, which reflected not only lower damages per kWh at gas plants but smaller plant sizes as well; net generation at the median coal plant was more than six times larger than that of the median gas facility.
From page 9...
... vector editable damages associated with the normal operation of nuclear power plants (excluding the possibility of damages in the remote future from the disposal of spent fuel) are quite low compared with those of fossil-fuel-based power plants. However, the life cycle of nuclear power does pose some risks.
From page 10...
... Greenhouse Gas Emissions and Electricity Generation Emissions of carbon dioxide (CO2) from coal-fired power plants are the largest single source of GHGs in the United States.
From page 11...
... Therefore health and environmental damages related to obtaining heat directly from natural-gas combustion are much less than damages from the use of electricity for heat. Aggregate damages from the combustion of natural gas for direct heat are estimated to be about $1.4 billion per year, assuming that the magnitude of external effects resulting from heat production for industrial activities is comparable to that of residential and commercial uses. The median estimated damages attributable to natural-gas combustion for heat in residential and commercial buildings are approximately 11 cents per thousand cubic feet.
From page 12...
... in 2007. Thus, in the near term, where domestic natural gas remains the dominant source for heating, the average emissions factor is likely to be about 140 lb CO2-eq per thousand cubic feet (including upstream methane emissions)
From page 13...
... . Despite the general overall similarity, some fuel and technology combinations were associated with greater nonclimate damages than others.
From page 14...
... Damages related to climate change are not included. ABBREVIATIONS: VMT, vehicle miles traveled; CG SI, conventional gasoline spark ignition; CNG, compressed natural gas; E85, 85% ethanol fuel; HEV, hybrid electric vehicle.
From page 15...
... Those using compressed natural gas also had comparatively low GHG emissions. Future Reductions Substantially reducing nonclimate damages related to transportation would require major technical breakthroughs, such as cost-effective con 12  The Fischer-Tropsch reaction converts a mixture of hydrogen and carbon monoxide -- derived from coal, methane, or biomass -- into liquid fuel.
From page 16...
... ABBREVIATIONS: g CO2-eq, grams CO2-equivalent; VMT, vehicle mile traveled; CG SI, conventional gasoline spark ignition; CNG, compressed natural gas; E85, 85% ethanol fuel; HEV, hybrid electric vehicle.
From page 17...
... Estimating Climate-Change Damages Energy production and use continue to be major sources of GHG emissions, principally CO2 and methane. Damages from these emissions will result as their increased atmospheric concentrations affect climate, which in turn will affect such things as weather, freshwater supply, sea level, biodiversity, and human society and health.14 Estimating these damages is another matter, as the prediction of climatechange effects, which necessarily involves detailed modeling and analysis, is an intricate and uncertain process.
From page 18...
... Under current best practice, estimates of global damages associated with a particular climate-change scenario at a particular future time are translated by researchers into an estimate of damages per ton of emissions (referred to as marginal damages) by evaluating the linkage between current GHG emissions and future climate-change effects.
From page 19...
... As a result, the climate-related damages in that year from coal-fired power plants and transportation are likely to be greater than their nonclimate damages. Infrastructure Risks and Security The committee also considered external effects and costs associated with disruptions in the electricity-transmission grid, energy facilities' vul
From page 20...
... • The external costs of accidents at energy facilities are largely taken into account by their owners and, at least in the case of our nation's oil and gas transmission networks, are of negligible magnitude per barrel of oil or thousand cubic feet of gas shipped. • Because the United States is such a large consumer of oil, policies to reduce domestic demand can also reduce the world oil price, thereby benefiting the nation through lower prices on the remaining oil it imports.
From page 21...
... could substantially reduce the damages of external effects, including those from grid-dependent hybrid and electric vehicles. It is thus our hope that this information will be useful to government policy makers, even in the earliest stages of research and development on energy technologies, as an understanding of their external effects and damages could help to minimize the technologies' adverse consequences.


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