When used to generate power or move vehicles, fossil fuels kill people. Particulates and ozone resulting from fossil fuel burning cause direct health impacts, while climate change will act indirectly. Regardless of the immediacy, premature deaths and illness prior to death are felt through lost productivity and the cost of treatments.
Typically, you see the financial impacts quantified when the EPA issues new regulations, as the health benefits of limiting pollution typically dwarf the costs of meeting new standards. But some researchers from Lawrence Berkeley National Lab have now done similar calculations—but focusing on the impact of renewable energy. Wind and solar, by displacing fossil fuel use, are acting as a form of pollution control and so should produce similar economic benefits.
Do they ever. The researchers find that, in the US, wind and solar have health and climate benefits of over $100 for every Megawatt-hour produced, for a total of a quarter-trillion dollars in just the last four years. This dwarfs the cost of the electricity they generate and the total of the subsidies they received.
Avoiding damages
The new work, done by Dev Millstein, Eric O’Shaughnessy, and Ryan Wiser, was inspired in part by recent work done on estimating what’s called the social cost of carbon. The social cost of carbon is a way to attach a dollar value to every ton of carbon emissions that represent its share of the total damage that will result from global climate impacts. The US government currently uses a value of about $50/tonne, but recent research places it at $185/tonne. Similarly, there has been additional research into the health impacts of SO2 and nitrogen oxides emitted during the burning of fossil fuels, which produce particulate and ozone pollution.
So, the researchers decided to create new estimates of the benefits of renewable power, taking these updated estimates into account. They also chose to do so in a way that will make it easier to keep their estimates up to date, by focusing on regional-level changes in US electricity generating, rather than waiting for data on individual power plant production, which tends to take a while to gather. (So, the work sacrifices some resolution in order to make data available sooner.)
The basics of the analysis are pretty simple. They started by dividing the 48 contiguous states into 11 regions, as defined by the US Energy Information Agency (you can see a map of them here). Then, they determined whether wind or solar were contributing at least 3 percent of the electricity to each region. One region, centered around Tennessee, was under 3 percent for both wind and solar, so wasn’t included; a few of the others fell below 3 percent on wind or solar, so only a single power source was considered there.
From there, the analysis involved finding out how much renewable power was generated within that region. In the absence of wind and solar, that demand would likely have been met using fossil fuels (given the pace of nuclear and hydroelectric construction, this is a very reasonable assumption). A regression analysis was used to match renewable production to alterations in fossil fuel generation, and the fuel that would have been used to meet the demand in the absence of renewables (either coal or natural gas) was assumed to match the existing mix in that region.
Since we have estimates of the climate and health damages caused by both coal and natural gas, it’s easy to convert these changes into dollar values. And those values can be viewed as co-benefits to switching to renewables. They don’t accrue to anyone involved in operating the plants but instead are enjoyed by society at large in terms of reduced environmental degradation and lower health expenses.
Counting the costs
One thing the regression analysis suggested is that there isn’t a 1:1 ratio between the production from renewables and a drop in use of fossil fuels. Instead, one Megawatt-hour of wind power offsets 0.89 Mw-hr of fossil fuels, while a Mw-hr of solar only offsets 0.76 Mw-hr of fossil fuels. There are a variety of reasons for this gap, ranging from long-distance transmission losses (renewable facilities are often far from urban areas) to curtailment of production to excess renewable production being absorbed by battery storage. It’s likely to be a mix of the three.
The other thing is that wind and solar have distinct impacts. Wind is more commonly used in areas that otherwise get a lot of their electricity from coal, and coal is estimated to have much larger environmental costs: “the United States coal fleet released 95×, 3×, and 2× more SO2, NOx, and CO2 than natural gas plants, respectively, per MWh of electricity produced,” Millstein, O’Shaughnessy, and Wiser write. Since wind is displacing more coal, its benefits are correspondingly larger.
As a result, the environmental and health benefits of wind in 2022 are estimated as being $143 for each Mw-hr, with solar providing $100/Mw-hr in benefits. Given the amount of power generated by wind and solar that year, that works out to a total of $62 billion and $12 billion, respectively. For the entire 2019–2022 period, they total up to $250 billion. Due to the uncertainties in various estimates, the researchers estimate that the real value for wind is somewhere between $91 and $183 per Mw-hr, with solar having a proportionate uncertainty.
For comparison, they note that the unsubsidized costs of the electricity produced by wind and solar range from $20 to $60 per Mw-hr, depending on where the facility is sited. So, in some ways, the companies that own these plants are only receiving a very small fraction of the benefits of their operation. Wind and solar do receive subsidies, but even the most generous ones provided by the Inflation Reduction Act max out below $35/Mw-hr—again, far less than the health and environmental benefits.
The researchers note that most of these benefits (about 75 percent) come from the reduction in carbon dioxide emissions. Still, the nitrogen and sulfur emissions reductions were also substantial: They displaced the equivalent of roughly 20 percent of the power sector’s total emissions of these chemicals. That translates into avoiding about 1,400 premature deaths in 2022 alone.
Anti-externalities
In addition to the limited resolution of a regional analysis, Millstein, O’Shaughnessy, and Wiser acknowledge a number of limitations to their work. One big one is that they don’t include distributed solar at all, meaning their totals for that form of production are a significant underestimate. (The Energy Information Agency estimates that, in the US, distributed solar accounts for over 30 percent of total solar production.) It also, as mentioned, doesn’t account for the use of storage such as batteries, which are increasingly used to offset the tail-off in solar production in the evenings.
In addition, their work doesn’t account for the intermittency of renewable power sources, which can sometimes result in the use of less efficient fossil fuel plants and so offset some of these benefits. The drop of wind and solar prices are also influencing decisions on what types of fossil fuel plants are getting built, disfavoring coal and increasing investments in natural gas plants that can respond quickly to changes in renewable output. Over the long term, this will result in additional benefits that can’t be captured by this sort of short-term analysis.
Still, there’s value in trying to quantify all the ways that shifting to renewables is good for society as a whole. There has been a lot of focus in the policy arena about the externalities of fossil fuels—the costs to society as a whole that aren’t included in the price we pay to use them. This analysis turns that sort of calculation on its head and gives us a clearer picture of what getting rid of those externalities provides to society.
Cell Reports Sustainability, 2024. DOI: 10.1016/j.crsus.2024.100105 (About DOIs).
