The science and art of valuing externalities: A recent history of electricity sector evaluations

In this paper the author looks at the question of placing values on the costs of pollution generated in power plants, in their effects of human health and welfare, and environmental harm, and how these values are assigned and applied in practice. The concept of placing such values on pollution is reflected in the institution of emission controls on power plants. Such types of controls and their costs tend to be termed as externalities. In practice such externalities are generally applied in economic analysis only to new plants and new construction. The author looks at the problem of establishing the economic costs of such factors, and then the factors which figure into the application of such costs in the real world.