The real cost of carbon

Two years ago, if you'd asked me what I thought about something like cap and trade, or a carbon tax, I would have said that they were interesting ideas, but probably not worth the trouble of fighting for. I didn't think a price on carbon was necessary and, in fact, I was worried it could do more harm than good.

Doing the research for my book, Before the Lights Go Out, changed my perspective. There are risks to any mechanism you use to put a price on carbon (there are risks to everything we do), and it's still not something we could institute easily (thanks, politics!), but I've come to think that this one thing could be the easiest method to change the way we make and use energy. Energy—and more importantly, reducing fossil fuel use—isn't intuitive. It's often hard to see how we're using fossil fuels, and make decisions about how to use less of them. A price on carbon, however you do it, takes some of the guesswork out of that. Instead of having to become some kind of Super Green Living Expert, all you have to do is do what's cheapest.

Grist.org posted an excerpt from my book this week, and they also did a short interview with me. One of the things they asked about was carbon pricing:

We’ve become dependent on fossil fuels for a reason — not because of any evil plot, but because these fuels are just that much more powerful than anything that came before them. The power of coal, the portability of liquid gasoline: There is amazing value there. At the same time, we’re also talking about fuels we have limited supplies of. And those fuels, when we use them, also cost us money in the form of health-care costs and climate change adaptation costs.

Right now, the price we pay for those fuels doesn’t really account for either the amazing benefits or the awful limitations. It’s an artificial price, based on simple, direct supply and demand. It doesn’t take the long term into account. It doesn’t take economy-wide effects into account.

If we valued fossil fuels at what they are really worth to us, then a lot of the other stuff would fall into place. That mixture of technologies and policies would happen faster, and more naturally, because it would be based on a natural incentive.

It’s reasonable for people to not want to spend half their paycheck on a fuel that is absolutely necessary to their life. But paradoxically, if we had a price on carbon, and the cost of those fuels went up, then businesses and governments and individuals would find ways to get people the services they needed at a lower cost. Right now, there’s not enough of an incentive for that.

Read the rest of the interview at Grist.org

Read more about why I think carbon pricing matters in Before the Lights Go Out.

Image: Black coal or charcoal for cooking, a Creative Commons Attribution (2.0) image from epsos's photostream