The social costs of producing electric power from coal: A first-order calculation

A methodology is discussed for quantitatively computing the social costs, or external diseconomies, which result from the production of electric power in conventional coal-fired steam electric plants. With the available data, and our present level of understanding, it is possible to obtain preliminary numbers which place the social cost for the technology of the mid and late 1960´s at ≥ 11.5 ±2 mills/kWh, somewhat more than the price of bulk power at the plant bus bar. In applying controls to limit the social costs, control costs are incurred. If the optimum level of control is taken as that level at which the sum of the social costs and the control costs is minimum, then we estimate the total social and control costs with optimum control as ≥4.5 ± 1.5 mills/kWh and the costs of controlling to that level as ≥3 ± 1 mills/kWh. These numbers will probably be reduced, and the optimum levels for control increased, as new technologies are developed. The paper is limited to a straightforward development of social costs. No attempt is made to develop policy implications or to draw broad conclusions on the basis of the costs which are derived.