Environmental Engineering Reference
In-Depth Information
California
Minnesota
Nevada
Coal
Gas
New York
Denmark (Max.)
EU carbon tax
UK CCL
0
1
2
3
4
Tax on generation (US cents/kWh)
Figure 7.9
Taxes on generation levied or proposed. (Courtesy of David Milborrow)
Table 7.5
Estimates of external costs, in cents/kW h. (Courtesy of David Milborrow)
Category
Coal
Oil
CCGT
Nuclear
Wind
Human health and accidents
0.7 - 4
0.7 - 4.8
0.1 - 0.2
0.030
0.040
Crops/forestry
0.07 - 1.5
1.600
0.080
Small
0.080
Buildings
0.15 - 5
0.2 - 5
0.05 - 0.18
Small
0.1 - 0.33 (1)
Disasters
0.11 - 2.5
Total, damage
0.7 - 6
0.7 - 6
0.3 - 0.7
0.2 - 2.5
0.2 - 0.5
Global warming estimates
0.05 - 24
0.5 - 1.3
0.3 - 0.7
0.020
0.018
Indicative totals
1.7 - 40
3.7 - 18.7
0.83 - 1.86
0.36 - 5
0.4 - 1.0
7.4.5 Pricing Pollution
Costing pollution is not easy, but devising market mechanisms that take external costs into
account is also problematic. The solution favoured by economists is carbon taxes . These
would simply be added to the cost of electricity generated from particular sources so as to
refl ect the relevant external cost. The EU's proposals for carbon tax, for example, would have
added about
10/MW h to the generation
cost of gas. Apart from the problems of administering such a tax, the impact on electricity
prices was estimated to be too severe by most of the member states. The Netherlands and
Denmark, among others, have nevertheless acted independently and introduced carbon
taxes.
The EU's proposals for a carbon tax are unlikely to be implemented, but carbon trading
commenced in 2005 [8]. The EU Emissions Trading System (ETS) sets limits on member
states' carbon emissions from large industrial plants including fossil fuelled power stations.
The intention of the ETS is that the limits for each country will be steadily reduced over a
number of years to help deliver member states' obligations under the Kyoto Agreements. In
practice, fossil fuelled power plants have an annual quota for carbon emissions and those
who exceed their allowances must purchase 'credits' from generators or others who have not
18/MW h to the generation cost of coal and about
 
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