A new report from the National Research Council of the National Academy of Sciences (NAS) reveals that our energy bills are $120bln higher than they appear due to the "hidden costs" associated with the air pollution created by burning fossil fuels. The NAS report, which was commissioned by the US Treasury on behalf of Congress, estimates that over 90% of these hidden costs are due to premature death, implying that at least 18,000 Americans die each year to support our fossil fuel addiction (see table below):

The report concludes that these estimates are conservative as they do not include any costs related to climate change, national security, other pollutants, or the impacts of mountain top coal mining and that if these other costs were included they would raise the hidden cost of fossil fuels far higher than the $878 per household estimated using the assumptions underlying the NAS report.

Paying for our Fossil Fuel Addiction with Our Lives

According to the analysis, over half of these hidden costs come from the burning of coal to generate electric power. We currently burn over a billion tons of coal each year, releasing millions of tons of dangerous pollutants into the air in the process. The NAS report estimates that the "hidden" costs of these emissions at $62bln per year or around $530 per family on average. For people who live east of the Mississippi River, along the Ohio River Valley, in the Middle Atlantic and the South, however, these "hidden" costs are significantly higher as are the risks that these costs may be "paid" for by a loved one.

The report does note that these hidden costs from burning coal are actually expected to fall somewhat to around $38bln per year by 2030 as cleaner plants come on line. While this is a significant improvement given that coal consumption is expected to rise by 20% in 2030 under business as usual, it still means that over 165,000 Americans are expected to die prematurely due to the production of coal-fired power. It must also be remembered that this trillion dollar "hidden" cost is additional to the effects of producing over 50 billion tons of CO2 pollution from these facilities during this timeframe. Costs that are expected to accelerate the impacts of climate change around the world.

Under climate legislation, however, these hidden costs are expected to decline as coal-fired power is steadily replaced by cleaner alternatives. Indeed, under the government modeling of the ACES climate bill, coal consumption is expected to fall by 50% when compared to business as usual forecasts. This reduction in coal consumption is expected to not only help reduce the number of lives lost from breathing dirty air by the thousands but also lower our cumulative CO2 output from coal plants by around 25% between now and 2030.

The other large source of hidden costs comes from the combustion of transportation fuels. According to the study, air pollution from vehicles costs us $56bln per year ($36bln from light-duty and $20bln from heavy-duty vehicles). This works out to about 29 cents a gallon or roughly $330 per household per year. What is more, tailpipe pollution is not expected to improve over the next two decades according to the NAS report. This means that by the year 2030, the cumulative air pollution damages from burning transportation fuels and coal are expected to exceed $2trln. An extremely high cost of our addiction to fossil fuels given the 340,000 premature deaths this figure represents  (see graph below):

Natural gas is the final fossil fuel source of air pollution included in the study with externalized heath costs of around $2.14bln per year ($741mln from electric power and around $1.4bln from heating our homes, offices, and powering our industrial output). This roughly translates into an additional 0.16 cents per KWh of natural gas power if it were included into our fuel bills, adding around $18 per year to household energy costs. While this is a relatively small hidden cost, the overall hidden costs of natural gas with respect to global warming are still significant. Indeed, under climate legislation natural gas is expected to replace coal as our second largest source of CO2 emissions (after transportation fuels) by the year 2030 (see graph below):

In sum, Americans are literally dying by the thousands to support our addiction to fossil fuels. In fact, you and I have a better chance of dying from air pollution than we do from homicide. What is more, while the "hidden" costs highlighted in the NAS study are only a small portion of the overall hidden costs associated with our current energy economy, they present an immediate threat to our friends and family that cannot easily be ignored. Costs that should make us even more vigilant in our efforts to pass strong climate change policy and help create a cleaner energy future.