Exaggerated Health Cost Claims Used to Attack Fossil Fuels

Environmental groups have run into a wall of legislative resistance to tougher controls on greenhouse gas and air pollution emissions. Air pollution levels have been drastically reduced, climate change claims have lost their charm, and Americans are simply not convinced expensive new controls are necessary. Now environmental groups hope they can use the regulatory process instead and one of their key tools is the supposed health cost of air pollution. Close examination shows the claims are exaggerated.

The U.S Environmental Protection Agency has launched an all out attack on the coal industry primarily using concerns about mercury emission. The EPA set exposure limits just below the rates found in a 2001 national survey of mercury exposure and less than one one-hundreth previously allowed levels. EPA Administrator Lisa Jackson claimed new guidelines would save $140 billion in health costs by 2016 and used that to justify the cost to upgrade electric generation equipment. In Delaware, NRG is shutting down three older boilers at their Millsboro electric generation plant cutting electricity output about 40%. They are also investing $360 million on scrubbers for a fourth boiler which will lead to higher electricity prices. The U.S. gets about 50% of its electricity from coal so this effort will be repeated around the country.

Exposure surveys conducted since 2001 have all come in significantly below the proposed limits but the EPA ignores the results and has based decisions on the 2001 report. If the newer survey results were used the power plant changes would not be needed. The EPA also ignores the fact electric generation accounts for only one-half of one percent of airborne mercury with most of the rest coming from natural sources. The regulations will have no measureable impact on mercury exposure.

CRI had a close look at the health issue as an intervener in the Public Service Commission bi-annual review of Delmarva Power’s Integrated Resource Plan. The IRP looks out ten years at how to match demand and supply, and to meet regulatory requirements. One part of the study compared a new135 megawatt natural gas plant to a new 150 megawatt wind farm. Environmental groups were ecstatic external costs of air pollution and greenhouse gas were included for the first time. They were not as ecstatic about the results. The study showed no significant health impacts with either scenario but the conventional natural gas plant actually had a lower impact on health costs than the wind farm. The results got worse when CRI noted the natural gas plant results were hampered by using a capacity factor about one tenth of the actual expected rate. The higher output means the natural gas plant would lower air pollution and greenhouse gas emissions more than five times the wind farm. Health costs have not been recalculated yet with the revised output.

The primary factors of the health impacts are assumptions coal plant emissions increase ozone and a certain type of airborne particle designated PM2.5. These two pollutants are thought to contribute to pulmonary diseases such as asthma and chronic bronchitis. The costs are a combination of medical treatment costs and lost work day costs. Prevalence of asthma has doubled since 1980 and chronic bronchitis is up about 70% although there are a dozen theories as to the cause. The problem with linking coal plants to these health problems is both ozone and PM2.5 levels have fallen 30% at the same time disease prevalence has increased showing a negative correlation! While these pollutants no doubt impact health to some degree, something else is the primary driver of increased pulmonary disease prevalence.

A second health impact is from deaths caused by cardiac problems. The primary problem with this part of the study is the cost basis. There is ample legal precedence for determining the value of life with legal settlements often in the range of $1 million. However, the health impact study uses a survey of what people would be willing to spend for one additional year of life. The survey result was over $6 million which leads to exaggerated cost estimates.

A third cost impact is for the surmised health impacts of global warming from carbon dioxide emissions. There is no scientific basis for an estimate so an arbitrary $30/ton of CO2 was used. Again, this leads to exaggerated cost estimates.

No offsetting health benefits of lower cost fossil fuel based energy were used. Higher unemployment and lower incomes caused by higher than necessary electric prices can lead to thousands of deaths a year. A Johns Hopkins study1 showed a 1% increase in unemployment leads to a 2% increase in age adjusted mortality rates. Study author Dr. M. Harvey Brenner concluded, “economic growth is fundamental in meeting basic population needs, such as nutrition, housing, health insurance, medical care, sanitation, electricity, transportation, and climate control”.

Millions die from poor sanitation alone in third world countries from the lack of clean water and adequate sewage treatment that cannot be achieved without electricity. A USAID study2 shows a direct and dramatic correlation between energy use and life expectancy, infant mortality, child birth per woman, Gross Domestic Product, and literacy rates with benefits continuing throughout the income scale to even the richest countries.

For example, an increase in per capita energy use from 30 KWh/yr to 3000 KWh/yr drops infant mortality rates from about 120/1000 live births to 20/1000, increases life expectancy from 45 years to over 70, and increases GDP from $200/year to $3000/year. These improvements lead to political stability and a better quality of life. This is what will lead poor countries in Africa from poverty and despair. Also as energy use increases child birth per woman drops from over seven to under three. When per capita electric usage rises to 10,000 KWh a year birth rate falls below the replacement rate, 2.1 births per woman. Demographers now estimate world population will peak at 9 billion by mid century from the present 7 billion for exactly these reasons.

David T. Stevenson
Director, Center for Energy Competitiveness

Notes;
1) “Health Benefits of Low Cost Energy”, Dr. M. Harvey Brenner, Ph.D, John Hopkins University, School of Public Health, Baltimore, MD available from the British Library
2) “Energy and Country Instability Project Report”, U.S. Agency for International Development, USAID Contract # OUT-LAG-I-1-00-98-0004-00 Work Order 178, Gurneeta Vasudeva & Steve Siegel Energy and Security Group, and Olga Mandrugina Advanced Engineering Associates International.

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