A new report from the National Research Council examines and, when possible, estimates “hidden” costs of energy production and use — such as the damage air pollution imposes on human health — that are not reflected in market prices of coal, oil, other energy sources, or the electricity and gasoline produced from them. The report estimates dollar values for several major components of these costs. The damages the committee was able to quantify were an estimated $120 billion in the U.S. in 2005, a number that reflects primarily health damages from air pollution associated with electricity generation and motor vehicle transportation. The figure does not 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.
As the Senate gears up to discuss clean energy legislation this fall, the Senate may have””despite its awareness””another healthcare debate on its hands. If we cannot direct our use of energy towards those forms that do not carry hidden burdens, we better hope that Americans have good health insurance.
The National Research Council, an arm of the National Academy of Sciences, recently found that our current level of energy use is costing us a lot more than our environment””it is also costing us our health. In the newly released “The Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use,” the NRC explores the external costs of energy, costs that are certainly not factored into its market price. Requested by Congress in the Energy Policy Act of 2005, the report reveals that there are substantial “hidden” costs to our energy production and use, primarily reflected in damages to human health. The report monetizes these unseen energy costs at $120 billion annually by tracing the full cycle of our energy use””extraction, development, deployment, and waste. These costs result in the death of 20,000 people each year“”10,000 due to coal alone.
The NRC reports that most of the “hidden” costs of energy are attributed to coal-fired electricity generation and motor vehicle transportation””they extract an annual toll of $62 billion and $56 billion, respectively. In reporting its cost figures, the NRC only included the estimates for the non-climatic costs imposed by our energy use, specifically those costs related to health, agriculture, and built infrastructure. Although other pernicious side-effects of our energy use””such as ecosystem disruption, other pollutants (like mercury), and national security risks””impose costs to Americans, these environmental costs were examined in the report but were excluded from the final cost figures. (Note: this actually made the reported costs much clearer due to the panoply of possible monetary values the NRC calculated for these other damages). The conclusion is resoundingly clear: our current energy use has implications for much more than debates about the climate.
The punch line? Coal-fired power plants and motor vehicle transportation account for roughly $118 billion of non-climatic damage to the U.S. each year. Natural gas, which accounts for 20% of our nation’s electricity generation and the “vast majority” of heating demands, only costs us a little over $2 billion dollars annually in unseen costs (also note that the Energy Information Administration projects that the market price of natural gas will be 14.6 times lower than that of oil through 2030). Comparatively, the report shows, renewable energy (wind, solar, geothermal, etc.) costs us very little in external damages. With a tremendous renewable energy potential and an abundant untapped supply of natural gas, the U.S needs to””and can!””reduce these hidden energy costs by generating clean energy that does not obscure the real costs of its production and use.