Development of a new damage function model for power plants: Methodology and applications

Recent models have estimated the environmental impacts of power plants, but differences in assumptions and analytical methodologies have led to diverging findings. In this paper, we present a new damage function model that synthesizes previous efforts and refines components that have been associated with variations in impact estimates. Our model focuses on end-use emissions and quantifies the direct human health impacts of criteria air pollutants. To compare our model to previous efforts and to evaluate potential policy applications, we assess the impacts of an oil and natural gas-fueled cogeneration power plant in Boston, MA. Impacts under baseline assumptions are estimated to be $0.007/kWh of electricity, $0.23/klb of steam, and S0.004/ton-h of chilled water (representing 2-9% of the market value of outputs). Impacts are largely related to ozone (48%) and particulate matter (42%). Addition of upstream emissions and nonpublic health impacts increases externalities by as much as 50%. Sensitivity analyses demonstrate the importance of plant siting, meteorological conditions, epidemiological assumptions, a nd the monetary value placed on premature mortality as well as the potential influence of global warming. Comparative analyses demonstrate that our model provides reasonable impact estimates and would therefore be applicable in a broad range of policy settings.