Economic value of health benefits
Economic benefits from improved health with a power plant carbon standard

An Analysis of Costs and Health Co-Benefits for a U.S. Power Plant Carbon Standard


Power plant carbon standards are aimed at curbing carbon dioxide emissions from the power sector to help address climate change. Depending on how the standards are designed, emissions of secondary pollutants such as sulfur dioxide, nitrogen oxides, and particulate matter may also be reduced as a co-benefit of the policy—leading to improved air quality and associated health benefits such as fewer premature deaths, heart attacks, and hospitalizations from respiratory and cardiovascular impacts.

This study analyzed the anticipated health co-benefits of a power plant carbon standard that would achieve a 35% reduction in carbon dioxide emissions by 2020 through cleaner fuels, energy efficiency, emissions trading, and other measures. In a previous study, the researchers projected that approximately 3,500 premature deaths and hundreds of heart attacks and hospitalizations would be avoided in the U.S. each year as a result of this carbon standard. In this new study, the researchers calculated the economic value of those health co-benefits county by county for the continental US. Then they compared those benefits to costs that they projected for 14 commonly used power grid regions to estimate net benefits by region.

The researchers found that the benefits would be widespread and, before accounting for costs, most counties would receive more than $1 million in health co-benefits annually from the carbon standard in the study. Counties in the Northeast and Southwest U.S. are projected to gain the largest health co-benefits. The Mid-Atlantic, Ohio River Valley, and South-Central regions of the U.S. are projected to gain the largest health co-benefits per capita (these regions correspond to the power grid regions PJME, PJMC, MISO, SERCC, SERCD, and ERCOT).

The researchers then used three different sets of economic assumptions to estimate the cost of the carbon standard for each of the 14 regions. The results show that the highest costs of $1.5 to $3.6 billion per year are projected for the Midwest (MISO and SERCG), Mid-Atlantic (PJME), and Southeast (SERCC and SERCSE) regions under the central cost case.

Those same regions also have among the greatest benefits, ranging from $1.7 billion to $5.6 billion. The largest net benefits occur in the Central Mid-Atlantic region (PJMC).

The results suggest that net economic benefits from power plant carbon standards tend to be greatest in highly populated areas near or downwind from coal-fired power plants that experience a shift to cleaner sources with the standards.