The hidden costs of pollution

Feb 25, 2016

We often hear about the economic costs of environmental regulation on the energy industry.

But there’s a flip side to that equation — the price society pays for pollution.  One scientist has added up those costs. And she found they’re going down.

Modeling the hidden costs of pollution

For years, scientists have known that pollution from burning fossil fuels is bad for us.

But can we place a dollar amount on the hidden costs of burning coal and other fossil fuels for electricity?

"Because we started reducing those emissions, we reduced health impacts. These models cannot pinpoint who has specifically benefited, but on a population basis there are benefits." — Carnegie Mellon scientist Paulina Jaramillo

One person who wanted to know was Paulina Jaramillo, a Carnegie Mellon scientist. She studies how energy systems impact the environment.

Jaramillo called up a colleague. They designed a model to figure out those hidden costs.

The researchers plugged in pollution reports from the EPA, weather models and population data. They took into account the effects of pollution on crops, forests, and infrastructure. They also took into account how pollution affects human health.

Much of that cost hinges on one basic number. And it’s kind of creepy number.

“Value of a statistical life — which is a number widely used in policy analyses to estimate mortality costs,” she says.

The value of a statistical life is basically the amount of money we as a society are willing to spend to save someone’s life. And according to the federal government, it’s around $6 million these days.

How the cost of pollution has decreased

Since the early 2000s, emissions from sources like coal-fired power plants have been going down. And because of this, Jaramillo found that the annual cost of pollution declined from 2002 to 2011 by about 25 percent, to $130 billion.

“Because we started reducing those emissions, we reduced health impacts,” she says. “These models cannot pinpoint who has specifically benefited, but on a population basis there are benefits.”

Those benefits include fewer heart attacks and fewer ER visits for asthma that can be triggered by air pollution. 

So, what happened?

Jaramillo says the big change is that new regulations forced many coal-fired power plants to clean up.

The Great Recession lowered demand for a few years, and cleaner sources, like natural gas, have cut into coal’s share of the electricity market.   

These costs of air pollution may be going down, but the price tag the researchers calculated is still around $400 per year for every person in the U.S.

This research was published in the journal Energy Policy.

Reid Frazier is a reporter with the environment news program, The Allegheny Front.