Indicator: Environmental costs of energy and road transport

A graph shows the development of environmental costs energy generation and road transport between 2014 and 2017. They were 202,1 billion euros in 2014 and 207,9 billion in 2017.Click to enlarge
Environmental costs (greenhouse gases and air pollutants) of power and heat generation ...
Source: German Environment Agency Figure as PDF

Table of Contents

 

At a glance

  • Power generation, heat generation and transport activities pollute the environment, among other things, through the emission of greenhouse gases and air pollutants.
  • This results in high subsequent costs for society, for example through environmentally-induced diseases, damage to ecosystems or even buildings.
  • For Germany, these environmental costs are estimated to amount to almost 208 billion euros in 2017, an increase of 3 percent compared to 2014.
 

Environmental importance

Environmental costs are economically highly relevant, as was demonstrated by the economist Sir Nicholas Stern in his Review on the Economics of Climate Change in 2006 (Stern 2006). The Stern Report, as it became known, estimates that the costs caused by climate change will amount to 20 % of the global annual gross domestic product.

The use and transformation of energy resources for electricity and heat generation and road transport pollutes environment through the emission of greenhouse gases and air pollutants, e.g. particulate matter and nitrogen oxides. The air pollutants released cause an increase in morbidity, damage to buildings and monuments (facade pollution) and are a burden on ecosystems (cf. 'Population exposure to particulate matter pollution' and ‘Agricultural nitrogen surplus’). This also brings economic costs, such as expenses for the repair of storm damage. These costs have to be borne by those affected or by the general public, whereas the polluters of the emissions are usually not - or not fully - charged.

Energy generation and road transport cause environmental damage through greenhouse gases and air pollutants, but also infringe further on the environment by land consumption, noise pollution and water pollution. These are not included in the indicator.

 

Assessing the development

Total environmental costs increased from 202.1 billion euros in 2014 to 207.6 billion euros in 2017. This is equivalent to an increase of 3 %. The most significant increase was in the environmental costs of heat supply (+13 %). The trend towards more 1-2 person households and larger living spaces per capita makes a decisive contribution to this.

For electricity, the environmental costs fell by around 6 %. This is partially due to the increased use of renewable energies. Their use causes significantly less environmental damage from air pollutants and greenhouse gases than the use of fossil fuels such as coal, oil or natural gas. The environmental costs of transport rose by 7 %. Even the development of more efficient drive systems could not change this. The increase in road traffic and the trend towards more powerful vehicles are responsible for this development.

 

Methodology

Calculations of environmental damage are based on the ‘Methodological Convention 3.0 for the Assessment of Enviromental Costs’ of the German Environment Agency (UBA 2018, in German only). The convention helps to determine costs for the use of the environment according to uniform and transparent criteria. It takes current research into account.

The methodological convention includes cost rates for the environmental costs of greenhouse gases, air pollutants and noise as well as cost rates per kilowatt-hour of electricity and heat generated and per kilometre travelled (UBA 2019). The environmental costs incurred by electricity and heat generation as well as transport can be estimated on the basis of these cost rates.

More detailed information: 'Gesellschaftliche Kosten von Umweltbelastungen' (in German only).