When I had a job at a power plant near where I live, one of the engineers there pointed at the big chimneys and said (I translate:) "what comes out of those chimneys is cleaner than the air around us". They filter out everything except CO₂ with good efficiency and have big, heavy, expensive machinery and engineers onside 24/7 to monitor that it works.
A 5kg motor, optimised for portability, isn't going to be like that.
A matter of opinion. As I see it the several carcinogenic components of ICE exhausts are problems. Dying of cancer may be a small problem compared to an uninhabitable planet and I can see how one might consider it insignificant in comparison, but in my opinion, cancer is a real problem, including cancer caused by smog.
Coal-powered steam turbine is not that more efficient than a portable gas generator so considering coal is more carbon-intensive it's actually about the same or even worse in terms of emissions if you consider coal burning also produces mercury. Now nat gas-powered CCGT - different story. Good news is NYC is mostly powered by the latter and there's zero coal.
I know more and more electricity these days is produced by green sources, but the statement above which I read often, is never strictly true.