Category: Greenhouse gases

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Environment Greenhouse gases

Acknowledge the True Cost of Electricity

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Courtesy of Dr. Drew Shindell

Did you know that the federal government is shortchanging us citizens by a billion dollars a year? Cozy deals with the feds are allowing private enterprise to underpay for natural resources.

Last month I wrote about pressuring educational institutions to divest from fossil fuel investments. Our future health and that of the planet depend on using as little carbon-based fuel as possible.

Now there is more evidence that divestment is the proper path to follow. A New York Times article examines the most common energy source for generating electricity (coal) and suggests that the public is being cheated. Another article in a scholarly journal looks at atmospheric externalities from five different methods of electrical generation and comes up with estimates of the true cost of each. Any way you look at it, short-term gains by big business are robbing citizens of money and health.

Coal on our federal lands belongs to us citizens. Congress set the royalty rate for private companies at about 12% of the sale price for coal strip-mined on federal land. Almost all of that coal is used for generating electricity.

Often a small fraction of the price is actually collected, however. The General Accounting Office found that the effective royalty rate was only 5.6% in Colorado in 2012—less than half of what it should have been! Headwaters Economics, a nonpartisan research group, estimates that the loss each year to US citizens is between 1 and 5 billion dollars. Somehow we are being cheated out of this money. But that isn’t the only bad deal that is robbing us of money and health.

“Externalities” are hidden costs of a product. In La Plata County 2/3 of our electricity comes from coal-fired power plants. There are many externalities that don’t appear on our La Plata Electric Association bills, including greenhouse gases, mercury and health-robbing particulates.

One third of CO2 greenhouse gas emissions in the USA result from electrical generation, but we don’t pay directly for emissions that are causing disasters. Instead, our taxes pay for damage caused by storms and other symptoms of the climate-havoc that CO2 causes. Pregnant women are forbidden from eating many fish because they are contaminated with mercury from burning coal. Some of us pay both with money and with shortened lives for the asthma and other respiratory diseases caused by smokestack particulate emissions. The list of hidden costs goes on and on.

What is the true cost of electricity? LPEA charges domestic customers 11.9 cents per kWh—but that is far from the whole cost. (A kilowatt-hour is a measure of electricity.) Professor Shindell at Duke University has attempted to determine the true cost of energy. His paper “The social cost of atmospheric release” looks at two categories of cost—the core cost and externalities. Interestingly, the core costs of wind, solar and nuclear are all about 10 cents/kWh. None of these sources has significant externalities, according to Shindell. This obviously ignores the possible disasters associated with nuclear, however, as demonstrated by the Fukushima Daiichi Nuclear Power Plant. Furthermore, these costs do not include power distribution.

According to Shindell, the cost of generation with natural gas is the least expensive at about 6 cents/kWh, but the externalities add another dime of hidden expense. Coal is a loser: its core cost is a dime, but the externalities add another 27 cents to the true cost! That means that the true cost of electricity generated by coal-fired power plants is 37 cents/kWh.

Shindell’s study just looked at air pollution externalities. Water, in this year of drought, is another externality. While renewable energy uses little or no water, generation with coal requires a huge amount for cooling.

We are lucky to live where forward-thinking LPEA provides our power. Regrettably, more than 2/3 of its power is currently generated by coal. Fortunately it makes renewably generated “Green Power” available for tiny increment in cost. It has programs to encourage energy efficiency, such as paying half the cost of LED light bulbs. It promotes local renewable power generation with wind, hydro and photovoltaic systems, and has encouraged “planting” solar gardens.

What can the electrical consumer do? The first step is to use electricity frugally. Turn off lights when you don’t need them, unplug electrical “parasites” that draw current even when they’re “off” and replace your old refrigerator with an Energy Star one. Next, spend a few dollars a year to get “green” power. Always keep in mind that electrical generation with coal is robbing us of both money and health.

© Richard Grossman MD, 2015

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Environment Global Climate Change Greenhouse gases Population

Cap and Trade


Cap and Trade

© Richard Grossman MD, 2009

Economics is one of my weak points, so I write about this subject with trepidation. Since “cap and trade” has become an important concept to limit emissions that lead to global climate change, I need to try to understand it.

Not all people agree that greenhouse gases (mainly emitted from our use of fossil fuels) are responsible for climate change. Nor do all people even agree that the climate is warming. However, most scientists have reached agreement that human activities are causing major alterations in the world’s climate. Furthermore, many governments have recognized the hazards of global climate change, and are taking steps to control it. Until we know with certainty what is causing climate change, it is certainly prudent to take precautions to slow the onset of this disaster.

C&T is one of the proposed methods using the free market system to make it unprofitable to emit large quantities of greenhouse gases. The concept was first tested on an international basis with a different type of harmful emissions—those that destroy the ozone layer. The successful Montreal Protocol, signed 20 years ago, gradually forced industry to decrease its production of chloroflurocarbons. Remember, these CFCs were used in aerosol cans and refrigerators, but they have now been replaced by less harmful substitutes.

On a smaller scale, C&T has controlled acid rain in the USA. In this case, the system has been very successful in limiting release of sulfur dioxide, the precursor of acid rain. Since most sulfur dioxide comes from electrical generation with coal, power plants have been forced to install scrubbers that remove this hazardous gas or take other measures such as burning low sulfur coal. As a result, lakes and streams are healthier, fewer trees die—and house paint lasts longer!

To control greenhouse gas emissions using C&T, the first step is to establish current levels of emissions of these gases. Carbon dioxide (CO2) is the most important greenhouse gas since it is emitted in such massive amounts. Estimating CO2 output can be done by inference. For instance, combustion of a ton of coal produces almost three tons of CO2, and one gallon of gasoline generates almost twenty pounds of this greenhouse gas. A well-run company keeps close track of its use of fuel, so its CO2 output is easy to compute.

Many of the top corporations are already inventorying their emissions because they foresee that C&T will become law soon. The current level of CO2 will then become the cap—the maximum that the company can emit. If it exceeds that level, it will have to pay a fine.

The next step is to trade the authority to emit greenhouse gases. If one company can somehow reduce its CO2 emissions by, say, 100 tons below its cap, then it can sell the right to emit that amount to another company.

To lower emissions, this cap is reduced over time at a predetermined rate. For instance, the Montreal Protocol was successful because it cut the use of CFCs in 1994 to just one quarter of the baseline production of these harmful chemicals.

Already there is a market for buying and selling CO2 emissions. The largest market is the European Climate Exchange, where a metric tonne of CO2 emissions is currently worth about 12.5 Euros. The value will increase as time goes on and the cap is lowered.

How can a power company lower its CO2 output? Green power is one of the best ways. Electricity from the sun, hydroelectric or wind emits no CO2!

Would C&T work for limiting human population growth? Many years ago the great anthropologist Margaret Mead suggested that people should be required to meet certain requirements before they could start a family; presumably this would include education about raising children. She proposed that governments issue licenses for childbearing.

Instead of licensing people to be parents, another way to limit fertility would be to cap and trade. So far this method has not been adopted by any government—nor would I recommend it. Making voluntary family planning available has proven to be more effective than coercive programs, without the risk of backlash.

Cap and trade consists simply of placing a limit on harmful emissions, gradually lowering that cap, and having the ability to buy and sell the right to emit pollution. This system has been proven to be an effective way to decrease pollution. Hopefully C&T will work for greenhouse gases, but will never be used for the right to bear children.

This article above may be copied or published but must remain intact, with attribution to the author. I also request that the words “First published in the Durango Herald” accompany any publication. For more information, please write the author at: richard@population-matters.org.