The Social Cost of Carbon
Oh, the social cost of carbon isn’t nice.
That’s the part that’s not included in the price.
Corporations make a killing, while you and I pay twice.
Oh, the social cost of carbon isn’t nice.
And the social cost of carbon isn’t fair,
‘Cause it damages the water and the air,
Gives you heart attacks and asthma, bumps the cost of your health care.
No, the social cost of carbon isn’t fair.
$500 billion every year is quite a fee.
That’s five thousand dollars for a family of three.
It’s a tax we never talk about, not supposed to know.
That’s what it’s costing us, burning gas and coal.
It’s all about the social cost of carbon.
Economics calls it an “externality.”
But let’s call it what it is: a rotten subsidy!
Just like cigarettes, they cause a lot of ills.
Smoke ‘em if you want to, but don’t ask me to pay your bills!
It’s all about the social cost of carbon.
Wind and sun is a better bet.
What you see is what you get.
They’ve got no hidden cost,
No hidden albatross!
Wake up and look around.
It sure beats burning down!
Tell your senator: “don’t be a fool-
No more money for fossil fuel”.
‘Cause the social cost cost of carbon’s got to go.
There’s no more pretending we don’t know.
If we wanna get it off our backs,
Gonna need a carbon tax,
Cause the social cost of carbon’s got to go!
©Doug Hendren & Nancy Beall 2016
What do coal, oil and gas really cost? A whole lot more than you may think. They are loaded with “social costs”, or “negative externalities”, like expensive and dangerous side effects that we’ve been unwittingly buying for decades, often in the form of inflated taxes and medical bills.
The direct medical costs from air pollution: Air pollution causes heart and lung disease, along with 7 million premature deaths each year, according to the World Health Organization. A Harvard Medical School study calculated the US medical cost of burning coal at $500 billion per year, or $1,667 per person. There is good news, though: When we stop burning coal, we get healthier, especially kids.
Natural gas is a big problem, too. Gas from hydrofracking is associated with numerous, highly toxic chemicals polluting our groundwater and compromising our public health(1,2,3). Although industry has tried hard to suppress this information, we are starting to see successful litigation around the public health dangers from fracking. Natural gas is not a “clean bridge fuel” at all. When we include the methane escaping from fracking sites and from leaky pipes, natural gas is even worse than burning coal in driving climate change.
And frackers don’t clean up after themselves, either. Recent bankruptcies (2020) show they pay out millions to executives, then go bankrupt, leaving the public with the burden of cleaning up their mess. They “privatize the profit, and socialize the mess.” They are allowed to do this, of course, by politicians who in failing to regulate industry burden the public with pollution, industrial waste, and environmental destruction. See my song, “Ka-Ching, Ka-Ching.”
We are all paying enormous subsidies to the fossil fuel industry. According to a 2015 report from the International Monetary Fund, fossil fuel subsidies worldwide are worth $5.3 trillion annually, or $10 million per minute, including tax breaks and uncompensated environmental damage. In the words of the research director of the Australia Institute: “The old, false story of ‘cheap’ fossil fuels is bunk. In addition to the health and climate costs that are never accounted for, they’re very directly costing taxpayers billions.”
How will a carbon tax help? Exactly the way a cigarette tax works. For any market to work, prices must reflect actual costs. Today, people see a tax on cigarettes as fair and proper, “internalizing” society’s cost for tobacco-related disease.
Carbon fuels should likewise be priced to reflect what they really cost us. If we want to stop the fossil industry from “freeloading” on us all, we start by putting the cost of pollution back into the cost of the fuel, where it belongs. The fuel cost goes up, but our medical bills and other subsidies go down. A carbon tax is the simplest, the fairest and most efficient way to deal with the social cost of carbon.
Will it really work? Yes. A successful revenue-neutral carbon fee and dividend has been in place in British Columbia since 2009. To see what we have to gain by this policy, visit the Citizens’ Climate Lobby website.
REFERENCES
1) Physicians for Social Responsibility: Compendium of Scientific, Medical and Media Findings Demonstrating Risks and Harms of Fracking (Unconventional Gas and Oil Extraction).
2) Working Paper: Toward an understanding of the environmental and public health impacts of shale gas development: an analysis of the peer-reviewed scientific literature, 2009-2015 Out of 25 original studies, 84% identified potential public health risks or actual observed poor public health outcomes. When review papers were included in the analysis, the figure rose to 94%. Risks include skin and respiratory problems, infant deaths, birth defects, low birthweights, increased hospitalizations and elevated cancer risks from multiple known carcinogens.
3) Johns Hopkins: Study: Fracking Industry Wells Associated With Premature Birth.
4) Harvard School of Public Health, Interactive graphic: Explore the True Costs of Coal.
5) The Nation 3-23-16: Bill McKibben, Global Warming’s Terrifying New Chemistry
6) New York Times 4-23-16 Carbon Pricing Becomes Cause for World Bank and IMF. “cutting emissions enough to stave off the worst effects of climate change will not be possible unless all fossil fuel polluters are forced to pay for the carbon dioxide they emit.”
