The Obama administration has made only ineffective efforts to address climate change such as shilling for “clean coal”, opening up the artic for drilling, and non-binding, unenforced climate agreements. An unfortunate truth is that the political process is bound by billionaires who will make purchases for the betterment of themselves rather than for the good of the masses. The Koch brothers are an example of this. They spent millions of dollars to stop the climate change action.
We can examine the cost of energy in two ways: the dollar amount on our utility bills or gas pump or the “social cost.” The social cost includes all the consequences that energy sources (coal, nuclear power…) exert on the public as a byproduct. Economists have been trying to quantify these social costs for a while, looking at the premature deaths due to air pollution and damage brought on by the Deepwater Horizon oil spill in the Gulf Coast. Yet for some reason, it is rare that someone has tallied up these social costs in an organized fashion. But Michael Greenstone and Adam Looney from the Hamilton Project wrote up a paper on this exact topic. Greenstone and Looney are two economists who go through all the papers and attempt to calculate the price of various energy sources including external social costs.
Coal is an interesting energy source to examine. Only looking at market price, electricity from coal is America’s cheapest energy source hence why coal is still a provider of 45% of the country’s electricity. However, the reason for the reasonable price is that soot from coal-fired power plants still causes thousands of premature deaths every year as well as hundreds of thousands of illnesses. Those costs are seen in shorter lives and higher health care bills. If coal users paid for these costs themselves, the price of burning coal would increase from 3.2 cents per kilowatt hour to 8.8 cents per kilowatt hour, estimate Greenstone and Looney. This is not even including social costs from the actual mining and drilling. So far, this is the most comprehensive analysis we have, although it still is not complete.
Some of Greenstone and Looney’s choices could be debated. They estimated the “social cost of carbon” to be $21 per ton in 2010 and found this number from a study done by an interagency U.S. government task force. However, other economists argue that this number downplays the damage that could be inflicted by global warming. Other studies have come up with an average of $43 per ton, which would then double the cost of coal.
These hidden social and external costs of energy types are huge factors in the debate over climate change. Politicians dread the day when these costs become apparent to the public. It will tarnish their view of cheap energy as they realize cheap energy is not actually cheap. This could be one reason why the Obama administration has made minimal efforts to mitigate the climate change situation.
The Obama climate change agreement with China is not much of an agreement. Elliot Diringer, the executive vice president of the Center for Climate and Energy Solutions says, “I wouldn’t even call it a deal. It’s a joint announcement.” Bill McKibben says the agreement is not binding in any way but rather Obama is essentially writing an IOU for future presidents.
Climate change has turned into a partisan issue.