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Evidence-based analysis of sustainability initiatives. Part 3: Subsidies and externalities.
William Goetz William Goetz | March 25, 2014
Energy production from fossil fuels is estimated to cause 30,000 excess deaths per year in the US from pollution. More US citizen die every year from this pollution than the cumulative deaths from all the years of our recent wars. It causes an estimated 400,000 deaths worldwide.
On top of this, its global warming costs are estimated to be in the range of trillions of dollars.
Such hidden costs, also known as externalities, disrupt the economic, political, geologic, biologic, geographic, and social equilibrium of governments and citizens, thus upsetting global, transnational, national, homeland, and individual security (Homeland Security Affairs Journal, https://www.hsaj.org/?article=9.1.6).
The National Academy of Sciences estimates the hidden health costs of pollution from fossil fuels in the US to be in excess of $130B per year. The environmental costs add billions more. ("The Hidden Costs of Energy." http://www.nap.edu/openbook.php?record_id=12794&page=1).
Despite this, the US subsidizes fossil fuel energy producers to the tune of more than $500 Billion per year $500,000,000,000 - note the number of zeroes). Globally, the subsidies account for $2.4 Trillion annually ($2,400,000,000,000), or about 3% of the world’s GDP, and 8% of global government revenues (International Monetary Fund, https://www.imf.org/external/np/pp/eng/2013/012813.pdf).
The fossil fuel subsidies noted above are vigorously supported by the same free market advocates who vehemently decry renewable energy subsidies as an anathema to “free market” principles. Yet, in total, these current fossil fuel subsidies make any proposed renewable energy subsidies look like pocket change.
Because these subsidies and externalities (the aforementioned hidden health and environmental costs) are not reflected in the price of gasoline at the pump, this is a textbook example of the failure of free markets to set prices.
We might consider taking away these fossil fuel “entitlements” in a reasoned manner (see previous IMF reference for strategy). It would assuredly decrease jobs in the fossil fuel sectors. However, since every dollar into the renewable energy sector creates more jobs than money added to the fossil fuel sectors, more jobs would be created, with a net increase in GDP.
If we transferred only a portion of these eliminated “entitlements” from fossil fuel producers to the DOD, we could refund our military. If we transferred another portion to the DOH and states, we could recoup any unanticipated costs of Obamacare “entitlements,” which are so decried by free market advocates.
Fossil fuel “entitlements”, along with the consequent negative effects of global warming, represent the most costly failure of the free market in human history.
The elimination of these fossil fuel “entitlements” would save countless lives, now and in the future.
How many lives does your gallon of gasoline cost?
William F. Goetz, MD
Evidence-based analysis of sustainability initiatives. Part 2: There is no such thing as "clean energy."
March 25, 2014 | 12:02 AM
Utilities are claiming that natural gas plants produce relatively clean energy compared to other fossil-fuel electricity producing plants such as coal-fired facilities. Some are promoting this as a bridge until renewable energy sources become the norm. Unfortunately, over a period of 25 years, natural gas plants create more global warming than coal- fired plants. http://www.stanford.edu/group/efmh/jacobson/Articles/I/NewYorkWWSEnPolicy.pdf. The explanation here is somewhat of an oversimplification, but should suffice to elicit comments.
The coal plants produce high quantities of sulfur dioxide, which blocks global warming by reflecting sunlight. On the other hand, natural gas plants produce high levels of methane, which has a much higher greenhouse gas warming effect per weight than carbon dioxide. "Methane has a global warming potential that is 72–105 times greater than carbon dioxide over an integrated 20-year period after emission and 25–33 times greater over a century period."
In addition, life-cycle emissions from natural gas extraction by fracking, and then its subsequent transportation and refining, releases higher quantities of both carbon dioxide and methane, as well as releasing other toxins into the environment. Over a period of time, the methane more than cancels out the decreased carbon emissions from natural gas plants relative to coal-fired plants.
"Thus, natural gas is not a near-term ‘‘low’’ greenhouse-gas alternative, in absolute terms or relative to coal. Moreover, it does not provide a unique or special path to renewable energy, and as a result, it is not bridge fuel and is not a useful component of a sustainable energy plan."
Sometimes you don't get what you think you're paying for. Sometimes you get more of what you think you're paying for to get less.
William F. Goetz, MD
Evidence-based analysis of sustainability initiatives. Part 1: Ungreen at any speed.
March 25, 2014 | 12:00 AM
Much has been made about reducing greenhouse gas emissions and pollution through the production and use of hybrid and/or electrical vehicles. Many companies and governmental jurisdictions are rushing to buy such vehicles, and/or to construct charging stations. However, if one considers the life-cycle of carbon emissions, it turns out that H/EVs are more damaging than conventional gas vehicles to the environment and to human health. Please review the chapter on Transportation in a study by the National Academy of Sciences, entitled "The Hidden Costs of Energy." http://www.nap.edu/openbook.php?record_id=12794&page=1. Downloads are free after registering, which is also free. This site is an amazing source of comprehensive, unbiased, evidence-based analyses of multiple topics of interest to government.
Basically, this is the case because more electrical energy - all of it from fossil fuels - is used in the production of the cars, their special batteries, recharging, and disposal, than for conventional gas powered vehicles. The more use of electricity - almost all of it from fossil fuels - the more damage. The decrease in operating emissions is more than negated by the emissions created in their manufacture and disposal. It is predicted that this will not change until most of our electrical energy is derived from renewable energy sources, which will probably not occur until 2030 at the earliest.
Buyers trying to do right to the environment by purchasing these vehicles are scammed in three ways. First, the manufacture and disposal of the vehicles is more damaging to the environment and humans than gas power vehicles. Second, the electricity for recharging also comes from fossil fuel production. Utilities love the concept of recharging, since almost all of the electricity would come from their own fossil-fuel power plants. Both of these facts more than negates the decreased emissions from vehicle operations. Third, the retail cost of the vehicles is at a significant premium to conventional vehicles, making them not cost-effective for most purchasers, including municipalities, over most anticipated lifetimes of the cars. The shorter the lifetime, the less chance of recouping costs from not using gasoline.
It brings to mind the well known, ill-advised rush/fiasco to subsidize ethanol production from corn.
We would be better off at this time by putting our limited financial resources into evidenced-based, more cost-effective methods for reducing GHGs and pollution.
More on evidence-based analysis in future blogs.
William F. Goetz, MD
Tom is right on target! Having worked with many communities on sustainability, I find there are often areas that can offer both sustainability progress and cost efficiency. Many times it is a matter of linking existing efforts and educating people. Sustainability has always been a fundamental principal of good government.
While Chris bring out a key point in today's economic environment about aligning sustainability goals with tinancial realities as a County Administrator I believe the difference that is needed is simply leadership. I do not think that this is an either/or situation - with careful management of resources including taxpayer money a governmental unit can focus their efforts. What I also found is that in all too many cases people will tend to go back to their comfort zone instead of realizing that one can promote and work towards sustainability while maintaining fiscal responsibility. Indeed, in our community we found in many cases products that were "sustainable" and environmentally friendly actually cost less than products the county was using before. In this effort, knowledge is power and I recommend that you look beyond current procedures and aim high.
Dec 14 2010, 3.14 MB, PPT
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