Externalities

The U.S. economy is like a big machine into which is fed land, labor, and capital, and out of which  come  useful goods and services. Of course, something else must be fed to the economy: energy. The energy source of choice in the United States is and has for a long time been the “fossil fuels” (coal, oil and natural gas). Fossil fuels provide an astounding amount of energy. A small volume of gasoline powers your car up a mile-long 10% grade in about 1 minute.  Imagine yourself (and others) pushing the car up, and you begin to appreciate the magic of fossil fuels. Fossil fuels have enabled us to build a highly sophisticated, advanced world civilization. Unfortunately, in addition to the products that we value, our economy generates other “things” that are not so nice: mining waste; manufacturing waste; distribution waste; and product use waste (think of the plastic packaging that you discard when you buy a new “toy”); and waste from fossil fuel burning. These wastes are given a name by those economic insiders. They are called externalities because they are considered to be external to the economy, and therefore don’t count! The primary (but not only) waste product of the burning of fossil fuels is carbon dioxide, CO2, a colorless, odorless, tasteless, unobservable gas. Burning 1 pound of coal produces 3.4 pounds of CO2; 1 pound of gasoline, 3.64 pounds of CO2; and 1 pound of natural gas, 2.75 pounds of CO2. CO2 is considered an externality; it does not count in the realm of economic thinking.

Of the CO2 produced from fossil fuels, about half goes into the atmosphere, and the other half is absorbed by oceans and plants. So much fossil fuel has been burned in the last 250 years that the amount of CO2 in the atmosphere has increased from 280 parts per million (ppm), or 0.028%, to almost 400 parts per million, or 0.04%. It has been feared since the 1980s that this increase will cause warming of the earth due to the trapping of infrared radiation by atmospheric CO2. This fear has become reality. Since 1980 the average temperature at the surface of the earth has risen by 0.6 degrees C (1.1 degrees F). This has resulted in an escalation in the number and severity of weather events in the US and around the world. Our weather will become increasingly severe over time. Eventually large-scale ice melting and sea level rise will occur. Most human beings in the world live near ocean coasts, so ultimately the burning of fossil fuels will drive many people from their homes. How’s that for an externality?

There is only one way to stop climate change: STOP BURNING FOSSIL FUELS! Period. Is it likely that this will happen? What actions are necessary for it to happen? Clearly to sustain our standard of living we won’t stop using fossil fuels until we have a replacement energy source. There are only a few options: wind, solar, and nuclear power. SOPA believes that nuclear power is the best option. Each option has pros and cons, but they have in common that they produce ZERO CO2 during energy production. All generate electricity, which can power homes, businesses, and transportation vehicles. Were we to start now, how long will it take to build sufficient nuclear power plants to replace fossil fuel power? An optimistic projection is that it will take until 2040. If we were to start now.

With this staring us in the face, we might expect a sense of urgency within the halls of power. Is there concern in Washington, DC, or at the state level, about the impending impact of climate change? Are legislators writing bills advocating “fighting” climate change by phasing out fossil fuels? Has the President produced climate change initiatives for consideration by Congress? Do the Republican presidential candidates discuss climate change during their debates? I think we will all agree that the answer to all question is NO. The question is, WHY?