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Peter Lehner’s Blog

Time to recognize the price we pay for carbon

Peter Lehner

Posted June 15, 2010 in Moving Beyond Oil, Solving Global Warming

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Many will be watching President Obama tonight as he addresses the country from the Oval Office to unveil his plans regarding the disaster in the Gulf. He is expected to demand that BP pay billions into a third-party trust to cover immediate and near-term damages of coastal residents and businesses.  What is still unclear, however, is how the President will propose to deal with the long-term government policies that have led to our national addiction to oil.

It is time to reframe the debate and recognize* the price we already pay for oil and other carbon-based fuels.

We pay in our income taxes that cover the cost of wars in the Mideast to protect our oil supplies. We pay in handouts and tax breaks to the industries that pollute. We pay in health care costs from asthma and other conditions worsened by pollution. We pay in lost lives and livelihoods and the incalculable cost to pristine wild areas and wildlife.

We pay and pay and pay, but what we pay is hidden, and, as long as we can’t see it, we cannot seem to do anything about it. Let’s take a look at some of these hidden costs of subsidies and embedded government energy spending:

From 2002-2008, according to a study conducted by the Environmental Law Institute, we doled out over $70 billion to the fossil fuel industry and almost $17 billion to corn ethanol in tax breaks and direct payments.  These direct subsidies cost us around $115 per household per year, while slowing our transition to clean energy.

 

Corrected graphic for Peter carbon post.PNG

Environmental Policy Institute

 

As to social costs, a recent report the National Research Council tallied annual damages from the “unpriced consequences of energy production and use” in excess of $120 billion in the U.S.—excluding the huge impacts of climate change or other harm to ecosystems, infrastructure or security.  The vast majority of these damages (up to 90% for coal) were associated with “premature human mortality.”  That’s another $1,100 per household.

Additionally, the annual energy consumption of our own government costs us $25 billion per year, adding another $230 per household to the hidden carbon bill and upwards of 300 million metric tons of greenhouse gases per year—or roughly equivalent to the total emissions of Thailand or Argentina.

We’re already at $1,500 in back-of-the-envelope tabulations.  What we don’t pay for now, we pay for in deficit spending, compounding the burden of long-term adaptation costs to global warming that we will leave for our children and grandchildren.

We are fortunate to have an Administration that is proactive on some of these issues—a letter leaked this fall revealed the administration’s intention to eliminate fossil fuel subsidies and Executive Order 13514 stipulated a 28 percent reduction in greenhouse gas emissions by the federal government.  But this is not enough.

Capping greenhouse gas emissions will make these costs obvious, and allow the markets to respond.  Moving forward, we need to think less about “putting a price” on carbon, and more about recognizing the price we already pay—and how do deal with it.


 
* Grist has already done a particularly good job explaining this: here, here, here and here—much credit is due to David Roberts et. al!
 

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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