ECONOMICS OF NEW ENERGY SOURCES AND ADVANCED ENERGY TECHNOLOGIES

Abstract

Since the Industrial Revolution, the energy mix of most countries across the world has become dominated by fossil fuels. This has major implications for the global climate, as well as for human health. Three-quarters of global greenhouse gas emissions result from the burning of fossil fuels for energy. And fossil fuels are responsible for large amounts of local air pollution – a health problem that leads to at least 5 million premature deaths each year. For many developing countries, the cost of the environmental damage caused by air pollution is high even though per capita energy consumption is low—mainly because pollution controls are largely lacking.4 Costs from air pollution are also high for industrialized countries with strong pollution controls, not only because of much higher energy consumption but also because the cost of uncontrolled emissions grows much faster than energy consumption, given that economists measure these costs on the basis of willingness to pay to avoid these damages.