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May 24th, 2010

National Research Council: PHEV pessimism, energy’s hidden costs (and a few surprises)

Published on May 24th, 2010 | By: pwray@ceramics.org

RechargeIT converted plug-in hybrids at Google's Mountain View campus. The garage has recharging facilities powered by solar panels. Credit: Marcin Wichary, Flickr

A new National Research Council report starts to get at the real costs of energy versus what everyone pays at the gas pump or to their utility company.

Damage to human health from burning coal for electricity, for example, totaled about $62 billion in 2005. Driving motor vehicles produced $56 billion in health and other damages. And using natural gas to heat our homes, workplaces, and factories resulted in about $1.4 billion in harm. All told, the damages from U.S. energy use that the study committee was able to quantify added up to an estimated $120 billion in 2005. Not included in those dollar figures was harm from climate change, which the committee found impossible to estimate as a single number because of the wide-ranging possibilities for the damages. Instead, it estimated ranges for the climate-related damages; for example, the cost of those that result from burning coal to generate electricity range from about 0.1 cents to 10 cents per kilowatt-hour.

The report also has some other findings that are, to me at least, new:

  • Almost half the damages to human health and other nonclimate-related harms caused by coal-fired power plants could be traced to a just 10% of generating plants.
  • Electric vehicles and plug-in hybrids, by themselves, have greater damages than many other vehicle technologies because of hidden costs in the electricity used to power them and to create the batteries and electric motors.
  • Corn-based ethanol also had higher damages than many other types of vehicle fuel because of the energy used to produce the corn and convert it to fuel.

The report suggests that, “the most efficient policies to tackle hidden costs are likely to be targeted at the damages themselves, not the energy use – for example, by taxing the sulfur dioxide emissions from power plants rather than the electricity generated by them.”

In a separate but related new report about PHEVs, the NRC also says the new generation of hybrid vehicles will have little impact on oil dependency or CO2 emissions “until tens of millions of them are on the road, which will take decades.”

The report pins much of the blame for relatively low levels of anticipated sales on the higher sticker price for PHEV vehicles. But this is where I think the NRC’s conclusions get dicey.

Coupled with the first report above, it seems that government policy conceivably could shift how the hidden costs are paid and transfers those payments into subsidies that offset the purchase prices. In other words, we can either accept the hidden costs and continue to indirectly subsidize by having everyone pay through higher health care costs, environmental remediation, etc., and change nothing, or we tax the emissions and use policies to incentivize more efficient practices (not just PHEVs but also trains, public transit and zoning) through direct subsidies. More PHEVs, even if they turn out to be a transitional technology, means better manufacturing processes and less expensive per-vehicle costs.

Policies could also reward the use of solar-powered recharge stations, such as the one featured in the picture above.

 


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