Fossil Fuels: Market Failure and Fallacies
Why do we excuse fossil fuels for all the harm they cause when we know we can eliminate the damage by switching to renewable energy and electric vehicles? We also know it’s not going to reduce our standard of living. It’s only getting worse. According to the latest reports:
“Fossil fuel pollution caused more than eight million premature deaths in 2018, accounting for nearly 20 percent of adult mortality worldwide, researchers reported Tuesday. Half of that grim tally was split across China and India, with another million deaths equally distributed among Bangladesh, Indonesia, Japan and the United States, they reported in the journal Environmental Research.” —Phys.org
“Fossil fuels are now massively underpriced, reflecting undercharging for production and environmental costs—including for air pollution and global warming.” IMF
Fossil fuels stay alive and reward investors by shifting the costs onto the public and the taxpayers, and keeping the profits for themselves. This is a market failure, as in, the markets are not functioning efficiently. A number of factors are at play:
- Externalities. Switching from fossil fuel energy to renewables could save society something like $4.2 trillion a year in health and environmental costs caused by fossil fuels. These are costs that are paid for by individuals, not the fossil fuel industries. Therefore, they’re called “externalities” because the fossil fuel companies externalize these costs (on to society) while internalizing the profit.
- Subsidies. When you count up all the subsidies provided to the fossil fuel industry, it adds up to about $5.3 trillion a year.
- Direct Costs. Then we can get into the direct cost of climate change, into the billions of dollars per year from storms, flooding, heat waves, etc. Just in 2017 this number is going to reach something like $300 billion. This is not even counting the cost in human lives. Climate change is caused primarily by fossil fuels.
- Death: Air pollution from burning of fossil fuels causes millions of unnecessary deaths per year. There is no monetary value that can compensate.
—The Climate Economy
Another fallacy about fossil fuels is that we can’t survive without them, or that we will have to stop using electricity, live in caves and produce all of our own necessities. Of course that’s not realistic or desired. The thing is, we don’t have to reduce our standard of living. Things change of course, but things are always changing. Many studies have shown that we don’t have to reduce our standard of living if we switch away from fossil fuels. Here’s a recent summary from one such report by Millward-Hopkins et al (emphasis added):
We find that global final energy consumption in 2050 could be reduced to the levels of the 1960s, despite a population three times larger. However, such a world requires a massive rollout of advanced technologies across all sectors, as well as radical demand-side changes to reduce consumption – regardless of income – to levels of sufficiency. Sufficiency is, however, far more materially generous in our model than what those opposed to strong reductions in consumption often assume.
High-quality, low-energy housing, widespread public transport, and diets low in animal-based foods are globally important issues for sustainability ambitions. In other words, demand-side solutions are an essential part of staying within planetary boundaries.
The current work offers a response to the clichéd populist objection that environmentalists are proposing that we return to living in caves. With tongue firmly in cheek, the response roughly goes ‘Yes, perhaps, but these caves have highly-efficient facilities for cooking, storing food and washing clothes; low-energy lighting throughout; 50 L of clean water supplied per day per person, with 15 L heated to a comfortable bathing temperature; they maintain an air temperature of around 20 °C throughout the year, irrespective of geography; have a computer with access to global ICT networks; are linked to extensive transport networks providing ~5000–15,000 km of mobility per person each year via various modes; and are also served by substantially larger caves where universal healthcare is available and others that provide education for everyone between 5 and 19 years old.’ And at the same time, it is possible that the amount of people’s lives that must be spent working would be substantially reduced.
—MIllward-Hopkins et al
Many scientific studies have also shown that most of the critical or skeptical reviews of 100% renewable energy systems are flawed. One study by Diesendorf et all showed the following:
The rapid growth of renewable energy (RE) is disrupting and transforming the global energy system, especially the electricity industry. As a result, supporters of the politically powerful incumbent industries and others are critiquing the feasibility of large-scale electricity generating systems based predominantly on RE. Part of this opposition is manifest in the publication of incorrect myths about renewable electricity (RElec) in scholarly journals, popular articles, media, websites, blogs and statements by politicians. The aim of the present article is to use current scientific and engineering theory and practice to refute the principal myths. It does this by showing that large-scale electricity systems that are 100% renewable (100RElec), including those whose renewable sources are predominantly variable (e.g. wind and solar PV), can be readily designed to meet the key requirements of reliability, security and affordability. It also argues that transition to 100RElec could occur much more rapidly than suggested by historical energy transitions. It finds that the main critiques published in scholarly articles and books contain factual errors, questionable assumptions, important omissions, internal inconsistencies, exaggerations of limitations and irrelevant arguments. Some widely publicised critiques select criteria that are inappropriate and/or irrelevant to the assessment of energy technologies, ignore studies whose results contradict arguments in the critiques, and fail to assess the sum total of knowledge provided collectively by the published studies on 100RElec, but instead demand that each individual study address all the critiques’ inappropriate criteria. We find that the principal barriers to 100RElec are neither technological nor economic, but instead are primarily political, institutional and cultural
—Diesendorf et al
A full discussion of the fossil fuel disinformation machine is available at this link.
Another fallacy often repeated is that renewable technologies and batteries are more environmentally damaging than fossil fuels. The thing is, these are known issues that people are working on as we speak. Scientists are working on ways to create windmill blades and solar panels that can be 100% recycled. Yes, there are issues, but on a lifecycle basis, renewable energy systems already have far less harmful impact than fossil fuels on air, land and water. As humans it is our responsibility going forward to study the best configurations and optimize for these things, and that’s something we can and are already doing. No amount of harm to humans or nature is OK, because we know it’s not necessary, and that nature is crucial to our survival. Why would we burn down our only home? Do we drink the water out of dirty rivers because it’s cheap, it’s super easy to get? No, we drill down for clean water because we’re smart humans. We’re in the same position with fossil fuels now. We know there are better alternatives, and we just need to switch.
Americans want to transition to clean energy and jobs, while protecting coal workers from corporate shenanigans. Every study and poll out there shows that there’s one thing a majority of Americans can agree on: clean energy is the way to go, and that what we are lacking is the political will and courage.