This paper reports on external cost assessments of the coal and natura
l gas to electricity fuel cycles conducted within the ExternE Project
of the European Commission. This project leads the development of the
impact pathway, or damage function approach for analysis of the enviro
nmental and social impacts of energy use. The methodology allows highl
y detailed and spatially disaggregated analysis of pollutant damage, f
ollowing a logical progression from characterisation of emissions, thr
ough modelling of pollutant dispersion and atmospheric lifetime, to de
termination of impacts using appropriate dose-response functions, and
associated economic costs. The project team is multi-disciplinary and
the various models used have been the subject of international review.
Assessment of the effects of climate change is at a less advanced sta
te than analysis of, for example, air pollution effects on health, mat
erials and crops, or occupational health impacts. However, preliminary
results are available based on a review of damage estimates from the
available literature, and a more detailed methodology is being develop
ed. Both are described in this paper, together with a review of the ma
jor uncertainties.