Intersecting Minds: Education, Business and Technology at the North Carolina State Jenkins Graduate School of Management

Economic Impact of Oil and Coal: Not Good | October 28, 2009

Those damn scientists are at it again. One of the major arguments against implementation of energy reform and climate change legislation is that putting together such a system would impose a huge drain on our economy. Guess what? That drain is already happening.

The National Research Council recently released a report estimating the hidden costs of our petroleum and coal-based energy system. The NRC puts the quantifiable costs at $120B. And yes, that’s a B, not an M, as in $120 billion. These are just the measurable costs. According to the report

($120B is 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.

I’m not qualified to get into a deep policy discussion around the merits of a cap-and-trade system vs. a straight carbon tax. Nor am I ready to dig into other policies and incentive systems that could mitigate the problem, but it’s clear that the economic argument against action isn’t nearly as strong as it once was. Will effective energy reform legislation cost a lot of money? Yes. But according to this report we’re already paying a good chunk of that in hidden costs that show up in our health care bills right now. And that doesn’t even include the unquantifiable damage done to the environment and our addiction to Middle Eastern oil.


1 Comment »

  1. Not to mention the HUGE subsidies we give to the fossil fuel industries…

    (Way more than renewables get.)

    Comment by Nick K — October 28, 2009 @ 6:40 pm

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