Long Run Trends in Energy-Related External Costs

The research examines the long-run dynamics of external costs associated with coal in the United Kingdom from 1700 to 2000. It finds that during the nineteenth century, the externalization of social costs rose significantly, peaking in 1891 when damages were estimated at £17.5 billion (2000 prices), or 17.3% of GDP. The author argues that this period represents a massive market failure where marginal social costs far outweighed marginal social benefits, and that government failure delayed optimal mitigation by fifty years. The paper uses this historical case to caution that current greenhouse gas emissions may follow a similar pattern of delayed government action and high social costs.

• In nineteenth-century Britain, the proportion of average social costs of coal that were externalised rose from approximately 20-25% in the 1820s to between 60% and 70% by the 1880s.
• Total external costs from coal production and consumption peaked in 1891 at an estimated £17.5 billion (in 2000 prices), representing 17.3% of the UK's GDP at that time.
• Air pollution concentrations in London rose from under 400μg/m3 around 1800 to 600μg/m3 by 1890, with mortality rates from bronchitis rising faster than the concentration of pollutants.
• The decline in air pollution concentrations starting in the 1890s was primarily driven by suburbanisation, which spread emissions over a larger area, rather than a decline in total emissions.
• The British government failed to implement effective environmental legislation for over a century after it became socially optimal, with the Clean Air Act of 1956 finally addressing household coal consumption.
• The author suggests that current global greenhouse gas emissions exhibit similar patterns to historical coal pollution, including rising damage functions, scientific dissent, and weak legislation, which may lead to high social costs and delayed government action.
• Over the 300-year period from 1700 to 2000, an estimated 4.5 million people in the United Kingdom died as a result of coal production and consumption.

APA

Fouquet, R. (2011). Long Run Trends in Energy-Related External Costs. Basque Centre for Climate Change. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201107070959581951836345.pdf

Chicago

Fouquet, Roger. Long Run Trends in Energy-Related External Costs. Basque Centre for Climate Change, 2011. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201107070959581951836345.pdf.

Wikipedia

{{cite report |last1=Fouquet |first1=Roger |title=Long Run Trends in Energy-Related External Costs |publisher=Basque Centre for Climate Change |date=January 2011 |url=https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201107070959581951836345.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fouquet2011long, author = {Fouquet, Roger}, title = {{Long Run Trends in Energy-Related External Costs}}, institution = {Basque Centre for Climate Change}, year = {2011}, month = jan, url = {https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201107070959581951836345.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }