Wind Energy Weekly #696, Vol 15, 6 May 96

• Air pollution: While air quality in the U.S. has improved since 1990 due to the federal Clean Air Act Amendments, "the EPA [Environmental Protection Agency] reports that 90 million citizens (down from 140 million in 1990) still breath air below minimum quality standards. Thirty-three areas exceed federal smog standards. More troubling, recent research indicates that airborne pollution impairs human health in concentrations well below federal standards. For instance, doctors attribute 50,000 American deaths per year to airborne particulate matter, about one-third of which comes from power plants. Power plants also account for 23% of America's emissions of the toxic metal mercury. . . . [N]ew medical evidence indicates in a disturbing fashion that politically acceptable air pollution causes substantial health impairment and death."
  
  
• Climate change: "Although many mechanisms of global climate remain murky to scientists, most agree that the effects of rapid climatic change, should it occur, could be quite harsh. Rising sea levels could inundate coastal regions and island nations. Temperature shifts could spread tropical diseases such as malaria. Higher summer temperatures could increase conventional air pollution. Severe weather events such as floods, droughts, and hurricanes could multiply. These dangers might not materialize for decades. They may develop . . . gradually . . . or they may manifest themselves with unforeseen turbulence. Scientists remain uncomfortably aware that complex systems such as the global climate behave in unpredictable, non-linear ways . . . Most important, the effects of climate change may first appear when it is too late to forestall their extreme consequences. Unlike conventional pollutants, CO2 lingers in the atmosphere for many decades, meaning that actions taken to diminish the risks of climate change will take effect several years after their introduction."
  
  
• Other impacts: "Consider coal, the source of 56% of the electricity generated in the U.S. Despite extensive environmental regulation, ancillary effects of the coal economy include landscapes degraded by mining, air polluted by trucks and trains that transport coal, run-off from storage sites, mounds of waste ash, and costlier health care and health insurance for those who work the mines or breathe the by-products of combustion . . . These costs are distributed arbitrarily to society as a whole, rather than apportioned among the offending activities. More accurate energy pricing would allow consumers to make sound energy choices by revealing their true cost to society."
  
  

                              NEWS
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              *             from the               *
              *  AMERICAN WIND ENERGY ASSOCIATION  *
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• The "free rider" or "public goods" issue: People who support clean power even though it costs a little more may be deterred from paying more as individual consumers since non-contributing "free riders" will benefit from clean air as much as the contributing consumers will. Economists recognize that when public goods such as the environment are at stake, public policy is required to correct for market failures.
  
  
• Marketing cost requirements: Small renewable energy companies may be hindered from competing effectively with their multi-billion-dollar competitors in the market because of the high cost which will be associated with marketing and advertising their product.
  
  
• Financing preference: Renewable energy systems are capital-intensive and require larger up-front investments and longer repayment periods than many energy sources. Investors therefore may prefer to invest in power sources with shorter payback periods, thus lowering their long-term risk exposure, even if those sources are more expensive on a long-term, life-cycle basis.