The net economic benefits of power plants: International evidence

Using unique emissions data and prices for carbon dioxide (CO₂), this study examines whether the economic benefits of electricity consumption outweigh the environmental cost. Our dataset consists of power plants from 33 countries between 2007 and 2018. We also investigate the net benefits of renewable energy sources, including solar, wind, and hydropower. We find that more environmentally friendly energy has lower CO₂ emissions costs and raises electricity consumption. In addition, renewable and nuclear power plants have more economic benefits than thermal ones. All three renewable energy sources have lower CO₂ emissions costs and more economic benefits than thermal energy. We also find that the benefit-cost ratio is at least 30 times higher for nuclear and renewable energy than for thermal energy. Our results show that, among the various types of renewable energy, wind and solar power plants show the highest benefit-cost ratio, despite having higher initial investment costs. Our study provides important insights for policy makers that can help them understand the net benefit of various types of power plants and implement appropriate policies and regulations to encourage the use of renewable energy sources as part of achieving their climate change agenda.