from The Worldview Literacy Book   copyright 2009            back to worldview theme #40

Discussion

     The early environmental movement was informed by bio- logist Barry Commoner's 1970 book The Closing Circle.  He argues that the environmental crisis fundamentally has two dimensions: the activities of humans are disrupting natural cycles and their economic accounting ignores certain real, difficult to measure, costs.  This latter problem was first analyzed in 1950 in The Social Costs of Private Enterprise by economist K.W. Kapp.  Kapp felt if the ignored costs of "environmental externalities" were included in economic cost vs. benefit analyses,  sometimes "production may take place at total costs in excess of total benefits."  Today, we describe externalities ignored by market-based pricing in various ways: loss of natural capital  biodiversity, not valuing ecosystem services, not recognizing when ecological debts are incurred or the "bads" that accompany "goods."  Generally fossil fuel based technologies have more environmental impact and greater hidden costs than renewable energy based ones.  Their disruption of the carbon cycle is especially worrisome (see Discussion, theme #23A). 

     In this regard, consider two ways of generating electricity at centralized power plants: from burning coal or by utilizing solar energy.  As 2007 began, U.S. power companies expected to bring online nearly 300 new (500 megawatt or larger) coal fired plants by 2030.  China was building the equivalent of one every week!  Plans for solar are plagued by its comparatively high cost: $.16 and $.18 per kilowatt-hour (kwh) for electricity from photovoltaic and concentrating solar power stations vs. $.05 per kwh from coal fired power plants.  Environmentalists argue that the lower figure for coal ignores the following hidden costs.    1) Mining endangers human health—accidents annually kill thousands in China, black lung disease wastes many more, etc. It scars the landscape—reclamation is possible and sometimes promised but never returns the land to what it was.  2) Water is polluted by acid mine drainage from sulfur compounds leached from waste tailings.  3) Air is polluted by burning coal—2/3 of all U.S. atmospheric sulfur dioxide, 1/5 of all nitrogen oxides emission, fifty metric tons/yr of mercury, and billions of tons

Figure # 40a: Stabilization Triangles

Discussion—continued

of carbon dioxide—37% of global emissions.  If these costs and others were added in, electricity from coal would cost more than solar, they argue!  A carbon tax is needed, they say.       

     There are many ways of reducing global climate threatening greenhouse gas output.  Princeton's Carbon Mitigation Initiative (Figure #40a) has pioneered the wedge concept.  Each wedge represents a reduction of twenty-five billion tons of carbon = 92.5 billion tons of CO₂ emissions over fifty years.  Implementing strategies that save eight wedges are needed.  Various ones  can be designed around increased use of renewable energy, reviving nuclear energy, carbon capture and storage, increasing energy efficiency, reducing deforestation, and government actions that force fossil fuel users to pay their true costs.

     Besides encouraging markets to factor in environmental & social costs, governments can promote environmental friendly technologies with subsidies, tax credits and other incentives.  A 2007 study concluded if the U.S. invested $420 billion over the next forty years in subsidizing photovoltaic & concentrating solar, by 2050 these technologies could economically (for $.09 per kwh) provide 69% of the United States' electricity needs and 35% of its total energy.  U.S. wind farms have benefited from a $.019 per kwh production tax credit—making wind generated electricity competitive with that produced from coal. But Congress threatening to repeal this has slowed the growth of such renewable energy.  Market uncertainty stifling investment can be minimized if governments provide guaranteed long-term subsidies. Thus carbon taxes—say $40/ton of carbon dioxide emitted—may be a better way to curb emissions than cap and trade schemes, given the latter's price volatility.

     Finally, instead of using gross national product (GNP) to gauge economic well being, those who like "Environmental Economics" and "Sustainability" (theme #23A) want government planners to begin using the green national product.  This index of sustainable economic welfare is obtained by including certain hidden costs and making other adjustments to GNP.  It factors in depletion of natural resources and any long-term environmental damage associated with economic activities.