Home > Microeconomics > The Externalities of “Green” Energy

The Externalities of “Green” Energy

There are clear externalities associated with using oil and other carbon-based sources of energy. So clear, you can take a photo of them:
Steam or Pollution?
But this image, which many people will assume is toxic smoke being released from a refinery or chemical plant, is likely more likely showing a lot of steam being released into the air. Water. Notice it looks like a cloud?

I’m not saying the externalities associated with fossil fuel use aren’t real or serious, just that if you want to do serious analysis of them, you have to 1) understand what the real external costs are, not just assume that because there are external costs, fossil fuels will always do the environment more harm than good [that’s the premise behind “less use is always better”] and 2) understand the externalities of alternatives.

And there are externalities associated with wind, solar, hydro, and nuclear power.

Consider the massive quantities of steel required for wind projects. The production and transportation of steel are both expensive and energy-intensive, and installing a single wind turbine requires about 200 tons of it. Many turbines have capacities of 3 or 4 megawatts, so you can assume that each megawatt of wind capacity requires roughly 50 tons of steel. By contrast, a typical natural gas turbine can produce nearly 43 megawatts while weighing only 9 tons. Thus, each megawatt of capacity requires less than a quarter of a ton of steel.

A modest proposal: stop categorizing certain energy sources as “green.” It misleads people into thinking some forms of energy don’t have negative externalities. They all do.

Categories: Microeconomics
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: