Assessment of the External Costs of Life Cycle of Coal: The Case Study of Southwestern China

Coal will continue to be the main energy source in China for the immediate future, although the environmental pollution and ecological impacts of each stage in the full life cycle of coal mining, transportation, and combustion generate large quantities of external costs. The Late Permian coals in southwestern (SW) China usually contain high amounts of fluorine (F), arsenic (As), and ash, which together with high-F clays cause abnormally high levels of endemic fluorosis, As poisoning, and lung cancer in areas where coal is mined and burned. In this paper, we estimate the external costs of the life cycle of coal. The results show that the externalities of coal in SW China are estimated at USD 73.5 billion or 284.3 USD/t, which would have accounted for 6.5 % of the provincial GDP in this area in 2018. The external cost of human health accounts for 87.2% of the total external costs, of which endemic skeletal fluorosis diseases and related lung cancers have the most important impact. Our study provides a more precise estimate of externalities compared with its counterparts in other provinces in China. Therefore, several policy recommendations would be proposed to internalize the external cost.