Methods of valuing environmental externalities

Journal Article · Fri Mar 01 00:00:00 EST 1991 · Electricity Journal; (USA)

DOI:https://doi.org/10.1016/1040-6190(91)90171-O· OSTI ID:5679130

Chernick, P; Caverhill, E ^[1]

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1. Resource Insight, Boston, MA (USA)

Estimating a monetary value for environmental externalities provides an approximation of the societal value of reducing impacts on human health and the environment from electrical energy supply. This method can be used for comparison of resources, including utility and nonutility generation, demand-side management and off-system power purchases. A dollar estimate of the full societal cost of the supply option is established by placing a value on its air, water and terrestrial effects and adding these costs to the option's capital, operating and maintenance costs. This article provides a rationale for monetizing externalities and addresses the strengths and weaknesses of four techniques for monetizing, with examples of the application of each method. The authors preferred technique for incorporating externalities into utility planning in the near term - implied valuation through the estimation of the marginal cost of abatement - is discussed in detail. 2 tabs.

• OSTI ID: 5679130
• Journal Information: Electricity Journal; (USA), Vol. 4:2; ISSN 1040-6190
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING
POLICY AND ECONOMY
AIR POLLUTION ABATEMENT
ACCOUNTING
ELECTRIC UTILITIES
ENVIRONMENTAL IMPACTS
EVALUATION
MARGINAL-COST PRICING
SOCIO-ECONOMIC FACTORS
INSTITUTIONAL FACTORS
POLLUTION ABATEMENT
PRICES
PUBLIC UTILITIES
296000* - Energy Planning & Policy- Electric Power
290300 - Energy Planning & Policy- Environment
Health
& Safety