August 2008
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The hidden price you pay for energy
Yes, we’re shelling out more at the pump and paying ever-higher cooling and heating bills. But those prices aren’t anywhere
close to what we actually pay.
The U.S. government supports the oil industry with billions of dollars in direct and indirect subsidies. Over the past 50 years, federal subsidies for fossil fuels (coal, oil, and natural gas) and nuclear power were 12 times what they were for renewable energy sources such as wind, solar, and biofuels.
Those subsidies have included income tax breaks, tax-free construction bonds, and below-cost loans with lenient repayment terms.
The U.S. is sponsoring a cheap ride for carbon polluters instead of investing in new energy technologies.
UNSEEN COSTS
The greatest price we pay might be the health and environmental effects of emitting millions of tons of carbon into the atmosphere.
The Intergovernmental Panel on Climate Change cites estimates of the social costs of carbon and notes that the impacts of climate change are very likely to impose net annual costs that will increase as global temperatures increase.
Some companies are working the future cost of carbon emissions into their business decisions. Predicting that businesses may soon be charged for the emissions, Google, the search-engine company based in Mountain View, Calif., is already adding that “cost” onto the price it pays for a kilowatt of energy. That allows the company to calculate what it believes will be the actual price of energy down the road and make decisions accordingly.
On the assumption that the total costs of fossil fuels will be higher in the future, Google says it is building data centers in areas with abundant renewable energy capacity.
WHAT’S NEEDED, AND WHEN?
The responsibility for reducing oil consumption shouldn’t rest solely with corporations or consumers. We need a national energy policy that accounts for the environmental costs. Countries such as Germany and Japan are far ahead of the U.S. in the production of a new energy infrastructure. Importing those solutions will prove to be a lot more expensive for the U.S. than developing our own successful incentives for innovation.
In this country, because of subsidies, it’s hardly surprising that traditional sources of energy are less expensive than renewable ones. Redirecting resources to alternative energies will lower their costs.
Consumers Union, the nonprofit publisher of Consumer Reports, is calling for strong federal and state leadership to encourage consumers and corporations to use energy more efficiently, develop smarter products, and make those products effective and affordable choices for consumers and for the health of the environment.
ONE ANSWER? Germany has more wind turbines than any other country.
The U.S. government supports the oil industry with billions of dollars in direct and indirect subsidies. Over the past 50 years, federal subsidies for fossil fuels (coal, oil, and natural gas) and nuclear power were 12 times what they were for renewable energy sources such as wind, solar, and biofuels.
Those subsidies have included income tax breaks, tax-free construction bonds, and below-cost loans with lenient repayment terms.
The U.S. is sponsoring a cheap ride for carbon polluters instead of investing in new energy technologies.
UNSEEN COSTS
The greatest price we pay might be the health and environmental effects of emitting millions of tons of carbon into the atmosphere.
The Intergovernmental Panel on Climate Change cites estimates of the social costs of carbon and notes that the impacts of climate change are very likely to impose net annual costs that will increase as global temperatures increase.
Some companies are working the future cost of carbon emissions into their business decisions. Predicting that businesses may soon be charged for the emissions, Google, the search-engine company based in Mountain View, Calif., is already adding that “cost” onto the price it pays for a kilowatt of energy. That allows the company to calculate what it believes will be the actual price of energy down the road and make decisions accordingly.
On the assumption that the total costs of fossil fuels will be higher in the future, Google says it is building data centers in areas with abundant renewable energy capacity.
WHAT’S NEEDED, AND WHEN?
The responsibility for reducing oil consumption shouldn’t rest solely with corporations or consumers. We need a national energy policy that accounts for the environmental costs. Countries such as Germany and Japan are far ahead of the U.S. in the production of a new energy infrastructure. Importing those solutions will prove to be a lot more expensive for the U.S. than developing our own successful incentives for innovation.
In this country, because of subsidies, it’s hardly surprising that traditional sources of energy are less expensive than renewable ones. Redirecting resources to alternative energies will lower their costs.
Consumers Union, the nonprofit publisher of Consumer Reports, is calling for strong federal and state leadership to encourage consumers and corporations to use energy more efficiently, develop smarter products, and make those products effective and affordable choices for consumers and for the health of the environment.
