Air pollutants from fossil fuel fired power plants harm the environment and human health. More than 91% of Iran's electricity production is from thermal power plants that use natural gas, diesel, and fuel oil. We apply the impact pathway approach to estimate the health impacts arising from Iranian fossil-based electricity generation emission, and in a next step, we calculate monetary costs of the estimated damages, for a one-year period starting from 20 March 2016 through 2017. We use the new version of SIMPACTS (International Atomic Energy Agency, Vienna, Austria) to investigate the health effects from 61 major Iran fossil-based power plants separately. The selected plants represent 95.6% of total Iran fossil-based power generation. Using the individual and different power plant estimates, we avoid extrapolation and our results can be considered more reliable, taking into account spatial differences. The total damage cost is 723.42 million USD (2000). The damage cost per generated electricity varies from 0.06 to 22.41 USD/MWh and average plant damage cost is 2.85 USD/MWh. Accounting for these external costs indicates the actual costs of fossil energy. The results are useful for policy makers to compare the health costs from these plants and to decide on cleaner energy sources and to take measures to increase benefits for society.

This paper reviews and compares eleven studies that have estimated external costs of fossil electricity generation by benefits transfer. These studies include thirteen countries and most of these countries are developing countries. The impact pathway approach is applied to estimate the environmental impact arising from fossil fuel fired power plant's air emission and the related damages on human health. The estimated damages are used to value the monetary external costs from fossil fuel electricity generation. The estimated external costs in the thirteen countries vary from 0.51 to 213.5 USD (2005) per MWh due to differences in fossil fuel quality, location, technology and efficiency of power plants and additionally differences in assumptions, monetization values and impact estimations. Accounting for these externalities can indicate the actual costs of fossil energy. The results can be applied by policy makers to take measures to avoid additional costs and to apply newer and cleaner energy sources. The described methods in the selected studies to estimate external costs with respect to incomplete local data, can be applied as a useful example for other developing countries.