Over at Grist last week, Dave Roberts blogged about a recent—and very important—study by the National Research Council on the enormous hidden costs of energy consumption.
I’m surprised that the study hasn’t gotten more press coverage. It’s fact-rich, sober, and completely non-ideological—and, at the same time, it’s an incredibly damning indictment of the nation’s energy system. The report looks at a variety of “external” costs of energy—that is, the costs that energy consumers themselves don’t pay, but pass on to the public at large. The costs they could pin down were largely related to air pollution, including the impacts on human health, crop and timber yields, and visibility. And the researchers find a big culprit: coal-fired power. From the NRC press release:
In 2005 the total annual external damages from sulfur dioxide, nitrogen oxides, and particulate matter created by burning coal at 406 coal-fired power plants, which produce 95 percent of the nation’s coal-generated electricity, were about $62 billion; these nonclimate damages average about 3.2 cents for every kilowatt-hour (kwh) of energy produced. A relatively small number of plants—10 percent of the total number—accounted for 43 percent of the damages.
Based on my awesome powers of multiplication, and a quick trip to the US Energy Information Administration website, these numbers suggest that the “hidden” costs of coal fired power in 2005 were roughly twice as high as the cost of the coal itself. And those costs, according to the NRC, don’t even include “damages from climate change, harm to ecosystems, effects of some air pollutants such as mercury, and risks to national security, which the report examines but does not monetize.”
So any time someone tells you that coal is “cheap,” just remember that in 2005 the real, comprehensive cost of coal was well over three times as high as the market price.
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The tally of damages that the NRC could calculate came to $156 million per coal-fired plant per year. The biggest culprits seem to be in the Midwest. According to this map in the NRC report, The Centralia and Boardman plants, in Washington and Oregon, respectively, don’t rank particularly high for the kinds of costs the NRC was looking at. But if you added in the costs for mercury emissions and climate risks, then the Northwest’s coal plants might rank a bit higher.
Obviously, the National Research Council is no group of amateurs, nor is it driven by any sort of ideology. It operates under the umbrella of the National Academies, a Congressionally-chartered non-profit that also houses the National Academies of Science and Engineering and the National Institute of Medicine. In other words, it’s a bunch of hard-core nerds: people who care about, y’know, facts & stuff. So tell your friends: the experts have spoken, and despite what the market says, coal ain’t cheap.
Coal photo courtesy of Flickr user Jenn and Tony Bot under a Creative Commons license.
Looks like energy and “friendly fire” have a lot in common…Thankfully, some righteous fire gleaned from the report’s Description:“…[T]here may be a case for government interventions in the form of regulations, taxes, fees, tradable permits or other instruments that will MOTIVATE RECOGNITION of these external or hidden costs.” [Emphasis added.]Sounds like a case for Sightline, too! Blog on, dudes! 🙂
Here are some more facts/calculations I gleaned from this report:FOSSIL ELECTRICITYAs noted, hidden health care cost per kWh averaged 3.2 cents. But individual power plants ranged from 0.5 – 12 cents per kWh. Clearly either carbon tax or cap will quickly shut down the 12 cent-ers…as they should be! How much lower does the fruit have to hang before we stop this dirty coal nightmare?FOSSIL MOTOR VEHICLE TRANSPORTATION Hidden yearly health care costs were reported at $56b in 2005. My research found USA vehicle miles travelled at ~3,000 billion. If so, that says 56 vehicle miles per $1 hidden health cost. Average for USA fleet is 25mpg, making it 2.25 gallons per $1 hidden health care cost. So from my rough calculations we get hidden health care cost per gallon of gas averages 44 cents. How about we pass a “health care cost recovery” bill and add 44 cents to transport fuels?All these figures are useful when discussing merits of carbon taxes/pricing.FOSSIL LIFESTYLE CHOICESAlso interesting to note that the 44 cents per gallon (or whatever it is exactly) is an AVERAGE. In reality people choose better or worse vehicles. And studies like this let you directly compare social cost of different vehicle choices. For example, an SUV uses about 5,000 more gallons than a sub-compact like Yaris…which puts an extra $2,000+ in health care damages alone on society. People who make high-fossil-fueled lifestyle choices like this are forcing others to pay the very large hidden costs for luxury choices. Big SUV vs Prius = $3,500 extra health care burden alone. Maybe we need a “health-care tax” on new cars based on fuel economy? The only hope we have is that if a person is gong to hyper-spew sickness and eco-collapse for personal luxury lifestyles they should at the very least have to pay for the full costs of it.
Jeffery J. Smith
Good article on the tip of the iceberg. Here are 10 Ways Public Revenue Policy tilts the playing field for coal.Taxes, too, whether levied or not, tend to favor coal in particular and entrenched ways in general. Coal miners and burners do not pay:1, permit to modify an ecosystem and2, Ecology Security Deposit and3, Restoration Insurance.These three would total coal’s assimilable external costs. Nor do they often pay:4, fines for exceeding ecosystem constraints; and5, tax on private mines or lease for public deposits equaling the market value of the coal in situ.1-5 leave coalers with too much capital to undercut competitors and to lobby politicians to tilt the playing field.In general, extractors of any resource and owners of any site do not pay:6, a tax or lease (or deed fee or whatever) equal to the annual rental value of the site or resource; the absence of a land tax, for example, allows sprawl development which ups demand for energy sources such as coal; yet landowners do pay7, a tax on buildings; that penalizes quality construction,so buildings are less efficient, exaggerating demand for fuels, including coal.Business owners do pay8, a tax on business and/or sales; that is harder on a start-up than on an institutionalized player; entrepreneurs trying to open a store or mail-order business to sell energy-saving devices and other apt-tech have a harder time than big old business like coal;9, a tax on wages; that makes labor more expensive, so a labor-intensive enterprise, such “house-doctoring”, becomes more expensive, missing a chance to reduce demand for fuel and coal; and10, a tax on profit; that thins the reward for taking risk and makes “blue chips” more attractive than cutting-edge technology, which leaves a greater market share to coal.Level the playing field, tax-wise and subsidy-wise, with geonomics: replace taxes with public recovery of natural values and replace subsidies with “rent-shares” or a Citizens Dividend. Then solar andthings we’ve never heard would be the norm, and would’ve become so long ago.