Environmental damage costs in Iran by the energy sector

On the basis of the energy supply and demand, this paper assesses the environmental damage from air pollution in Iran using the Extern-E study that has extended over 10 years and is still in progress in the European Union (EU) commission. Damage costs were transferred from Western European practice to the conditions of Iran by scaling according to GDP per capital measured in PPP terms. Using this approach, the total health damage from air pollution in 2001 is assessed at about $7 billion; equivalent to 8.4% of nominal GDP. In the absence of price reform and control policies, it is estimated that damage in Iran will grow to $9 billion by 2019, in the money of 2001. This is equivalent to 10.9% of nominal GDP, i.e. a larger percentage of a larger GDP. Of this total, $8.4 billion comes from the transport sector. The damage cost to the global environment from the flaring of natural gas, assessed on the basis of a carbon price of $10/ton CO2 and found to be approximately $600 million per year. This is equal to a little less than 1% of current GDP. There are larger costs associated with recovery and use of such gas, but equally there are large potential benefits.