With “True Cost” Of Emissions Factored In, Gasoline Would Cost $3.80/Gallon MORE Than The Pump Price

March 8th, 2015 by James Ayre

If the “true costs” of emissions — increased rates of premature death, illness, increased loads on the healthcare system, lowered crop yields, missed work days, higher insurance damages from extreme weather events linked to climate change, etc — are factored in, a gallon of gasoline would cost you roughly $3.80 more at the pump than it currently does, according to new research from Duke University.

Diesel’s true costs are even higher — unsurprisingly, especially for anyone that’s lived around diesel cars — with the true costs of the fuel adding around $4.80 a gallon more to the price than what’s paid at the pump.

Other fossil fuels follow this trend — the price of natural gas doubles, and coal-fired electricity actually quadruples in price. And, according to the research, solar and wind as a result would appear to be somewhat cheaper. It should also be noted that the graph just above doesn’t show the extra externalities (costs) of nuclear, because this work focused on emissions, but clearly nuclear has its costs.

“We think we know what the prices of fossil fuels are, but their impacts on climate and human health are much larger than previously realized,” stated Drew T Shindell, professor of climate sciences at Duke’s Nicholas School of the Environment. “We’re making decisions based on misleading costs.”

This is generally referred to as the externalization of costs, and is more or less inherent in most systems (urination, defecation, etc). Obviously though, at some point (with increasing externalization), these externalized costs begin to impact other systems that the system in question depends upon, and the true costs of an activity begin to become apparent. It’s simply that something else or someone else was dealing with them before, but now you have to as well — as the scale of the previously externalized costs has increased.





According to Shindell, the new study should give policymakers a more accurate framework for “estimating the costs of a broad range of health, climate and environmental damages linked to emissions from fossil fuels, industry, biomass burning, and agriculture (industrial-scale, resource-input intensive GMO agriculture in particular).”

As Shindell rightly noted, markets don’t place a price on most atmospheric emissions. As a result, polluters don’t pay any costs — we do, and for that matter, the wider animal and plant communities of the world do as well. (I doubt that microbes are affected ‘positively’ or ‘negatively’ much one way or another. Seems they can make do with practically anything.)

These unpaid costs are of course huge — industrial emissions (and other forms of pollution as well) are responsible for huge burdens on the healthcare systems of the world, the workforces, the agricultural systems, and, increasingly, on the stability of the climate.

As noted, though, these are hard-to-quantify costs: “Putting values on many of these social costs can be challenging because there are so many factors in play.”

It should also be noted here that the study didn’t include many external costs that were harder to quantify: ocean acidification, the effects of common forms of air pollution on intelligence or on the endocrine/hormone system, etc. Big problems, in other words, that weren’t factored in.

A recent press release provides more on that matter:

The comparative framework devised by Shindell to calculate these costs is built upon a widely used methodology introduced in 2010 to help the US government determine the social costs of carbon. Shindell’s models extend the scope of those calculations to cover a much wider array of pollutants and impacts, including damages from potent but short-lived climate pollutants (SLCPs) such as methane and aerosols, as well as longer-lived greenhouse gases such as nitrous oxides. The new models incorporate the most current data available to give policymakers accurate estimates of monetized damages.

“Looking at electricity, for example, the US Energy Information Administration estimates generation costs per kilowatt hour of power to be about 10 cents for coal, 7 cents for natural gas, 13 cents for solar and 8 for wind,” Shindell stated. “Not surprisingly, the US has seen a surge in the use of natural gas, the apparent cheapest option. However, when you add in environmental and health damages, costs rise to 17 cents per kilowatt hour for natural gas and a whopping 42 cents for coal.”

Gasoline, as mentioned above, is a similar case — if the social costs are added in, then a normal mid-range gasoline-powered vehicle is causing roughly $2,000 a year in damages. Whereas these costs are notably lower with electric vehicles — roughly $1,000 a year if the electricity is coming from coal-fired power plants; around $300 a year if the electricity is coming from natural gas power plants; and considerably less than that if the electricity is coming from renewables (a very strong trend downwards).

Shindell notes, it should be stated here, that owing to the inherent complexity of determining/establishing universal values for health & environment damages, this recent work is clearly not the last word when it comes to the “true costs” of emissions (hence the quotation marks).

“There is room for ongoing discussion about what the value of atmospheric emissions should be,” as he worded it. “But one thing there should be no debate over is that the current assigned price of zero is not the right value.”

A final note: according to the study, the total environmental costs of producing electricity in the US totals $330–970 billion a year. If these costs were truly factored into our economy, I’m getting the impression that the excess wealth wouldn’t be there for everyone to own a personal automobile, or to travel abroad on vacations (via jets) every other year, amongst other things.

The new findings are detailed in a paper published in the journal Climatic Change.

Image Credit: Duke University









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