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India’s electricity generation is primarily from coal. As a result of interconnection of grid and establishment of pithead power plants, there has been increased electricity transfer from one region to the other. This results in imbalance of pollution loads between the communities located in generation vis-à-vis consumption region. There may be some states, which are major power generation centres and hence are facing excessive environmental degradation. On the other hand, electricity importing regions are reaping the benefits without paying proper charges for it because present tariff structure does not include the full externalities in it.
The present study investigates the distributional implications in terms of air pollution loads between the electricity generation and consumption regions at the state level. It identifies the major electricity importing and exporting states in India. Next, as a case study, it estimates the health damage as a result of air pollution from thermal power plants (TPPs) located in a critically polluted region that is one of the major generator and exporter of electricity. The methodology used to estimate the health damage is based on impact pathway approach. In this method, air pollution modelling has been performed in order to estimate the gridded Particulate Matter (PM) concentration at various receptor locations in the study domain. The air quality modeling exercise helps to quantify the air pollution concentration in each grid and also apportion the contribution of power plants to the total concentration. The health impacts as a result of PM have been estimated in terms of number of mortality and morbidity cases using Concentration Response Function (CRF’s) available in the literature. Mortality has been converted into Years of Life Lost (YOLL) using life expectancy table and age wise death distribution. Morbidity has been estimated in terms of number of cases with respect to various health end points.
To convert this health damage into economic loss, the YOLL has been multiplied with Value of Life Year Lost (VOLY). VOLY has been derived from two approaches namely, the Gross Domestic Product (GDP) per capita i.e. using human capital approach and Value of Statistical Life (VOSL) i.e. using Willingness to Pay (WTP) approach derived from Indian revealed preference study. The morbidity damage has been estimated using cost of illness values available in the literature. A range of result has been presented depending on the CRF’s used to estimates YOLL and morbidity and the values used to convert these health damages into monetary estimates.
The study further suggests a broad framework of compensatory mechanism that includes
1) amount of compensation to be paid
2) mechanism to collect the compensation fund
3) mechanism to compensate the affected communities. Both, curative and mitigative measures to protect the communities from the pollution generated in the power exporting region have been suggested.
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