The full cost of energy isn’t always obvious, and the broad effects of our energy use are not always clear to consumers. Energy Bite expert Jared Cohon, Director of the Scott Institute for Energy Innovation and President Emeritus of Carnegie Mellon University, explores the hidden costs of energy.

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Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use, The National Academies of the Sciences (2010)

Electricity Explained: Electricity and the Environment from the U.S. Energy Information Administration

Energy and You from the Environmental Protection Agency

Power Profiler from the Environmental Protection Agency

Transcript

HOST: What are the hidden costs of energy? On this week’s Energy Bite, Jared Cohon, director of Carnegie Mellon University’s Scott Institute for Energy Innovation, explains.

COHON: When we use energy, we create impacts that we might not realize. For example, much of the electricity that we use in our homes comes from coal-fired power plants. Burning coal creates air pollution which impacts people living in the vicinity or downwind of the plant and global climate change that impacts everyone.

These impacts are called externalities. They represent a hidden cost because, while we get the benefit of using the electricity in our homes, but do not pay for – and likely aren’t even aware of – the damages caused by the power plant.

HOST: How much is this “hidden cost of energy”?

COHON: A National Academy of Sciences committee that I chaired found that burning coal produces $60 billion a year of external impacts, primarily health-related. Fueling our cars with oil accounts for another $60 billion a year, also due to air pollution health impacts. Most economists agree that the best way to deal with these impacts is to put a price on it, so that these costs would be factored into our decisions about our energy use.

HOST: Would you be willing to pay more for your fuel to take into account externalities? Take our poll, see the results, and ask your energy questions at Energy Bite dot org.

ANNOUNCER: Energy Bite is a co-production between 90.5 WESA and Carnegie Mellon’s’ Scott Institute for Energy Innovation.