The human economy resides within the environment, and as part of the human economy, the electricity system interacts with the environment in many ways. Environmental externalities are the indirect costs that electricity generation, delivery, and consumption place on the environment, but are not included in the consumer price of electricity. The electricity infrastructure takes up land, withdraws and consumes water, and emits air pollution. One environmental cost from electricity generation is damage from global warming caused by carbon dioxide emissions from coal, natural gas, and oil-fired power plants.
The Full Cost of Electricity study seeks to quantify the environmental costs and interactions of the electricity system in the context of decisions and other cost factors to determine the total direct and indirect costs of electricity.