A question of values: a case of environmental externalities in generation of electrical power Harvard Case Solution & Analysis

ExternE work for Europe arrived at grand total expense, according to 2005, of €41/MWh and €58/MWh for electricity production from black and brown coal. Renewable and nuclear energy had low external expense than all fossil fuels. For example, external spending was only €0.9/MWh for on-shore wind power and €4/MWh for nuclear power (light water reactor). The uncertainties and sequence in such measurements are known to be large but, even so, the processes for arriving at them and the significant expenses attained are of great value in charting the way forward towards reduced external effects. A threshold question is whether these European methodologies can credibly be applied in Australia. This review concludes that they can, although the figures would need to be validated, affected as they are by exchange rates, taxes, healthcare expense, etc. With regard to the environmental cost of CO2 emissions there is a wide range of estimates. This Academy study adopts a figure used in much of the ExternE calculations equivalent to $A31/tonne CO2. On that basis greenhouse gas damage expense for currently deployed fossil fuel technologies in Australia range from $A18/MWh for natural gas to $A39/MWh for brown coal. A certain figure for the average wholesale price of electricity in Australia is $A40/MWh, so these quantified external expenses are very significant.

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