Tallying the True Costs of Fossil Fuels
Monday, the New York Times reported that a National Academy of Sciences study tallied the cost of burning fossil fuels and found that it was running the county about $120 billion dollars each year. That price tag is based almost entirely on health care costs and thousands of premature deaths from air pollution. And that's not even the whole story. Absent from the study's calculations were costs associated with global warming (an issue which has the attention of insurance companies), the environmental destruction wrought by coal mining, and various other items like getting all worked up about where the oil happens to be and who we might have to fight to get to it. All those other costs aside, we rack up $120 billion alone trying to get well (and often not succeeding) from exposure to air pollutants emitted by power plants and vehicles.
All the more reason to get our health care system fixed, I suppose.
But the point of this study is not to debate death panels but rather to debunk the notion that fossil fuels are really so cheap compared to renewable energy... which tends not to kill anyone unless you get clipped by a wind turbine or wander into the beam of a concentrating solar thermal device.
And this highlights the subject of true cost accounting. You won't find the exact words "true cost accounting" anywhere in the mission statement of the Center for a New American Dream. But trust me, they are in there when we talk about protecting the environment, enhancing quality of life, and promoting social justice. Much of what we advocate for is tied to creating an economic system and a societal attitude that does not allow the environmental damages and toll on human health to be written off the ledger books.
In economics, we speak of externalities--items not included in the price tag. Some externalities are good (money you spend fire proofing your home makes your neighbor's home safer). But too often, the externalities are bad--air pollution, ruined rivers near coal mines, global warming--and those costs are borne not by the person who buys the product and presumably reaps the benefit, but by society as a whole and in particular by those who get no good from the goodies.
There will always be environmental costs associated with extracting raw materials and disposing of waste when we produce and consume consumer products. And it's also true that there will always be stuff we want bad enough to pay the price. But that's just it. We have to be aware of and willing to pay the full price, and adjust our wants and needs accordingly. Consumer products can't be made cheap simply by pretending these costs don't exist and that people and natural resources and unlimited and unbreakable.
The trick, of course, is to examine what we really need, and then find ways to fulfill those needs and produce the same benefits at lower costs. When we tally up the real price of fossil fuels and examine who is paying it and how, renewable energy increasingly looks like the better deal.