The Costs of "Going Green"
July 6, 2007
While man-made contributions to global warming, or the hazards that will derive from it, are still largely unknown, we are quickly learning the costs of going green.
Energy National bans on drilling in the Artic National Wildlife Refuge and the Continental Shelf have limited domestic oil supplies. Due to environmental laws, not a single refinery has been built in over thirty years. Activists opposed to nuclear power have successfully prevented the construction of new plants.
Meanwhile, varying local environmental regulations, combined with the national mandate to include corn-based ethanol, has made the production of gasoline increasingly difficult. At $2.70 per gallon in Aberdeen , the price of gasoline has doubled in the past six years, accompanied by dramatic price increases for heating oil and electricity.
Global Stability As the price of oil has gone up, so have revenues for oil producing nations. The top fifteen oil producers, in order, are Saudi Arabia , Russia , United States , Iran , China , Mexico , Canada , UAE, Venezuela , Norway , Kuwait , Nigeria , Brazil , Algeria , and Iraq .
In Iran , oil revenue accounts for 70% of the national budget. Half of the oil revenue is used to subsidize the local price of gasoline. Recently, there were riots in the streets because of gasoline rationing. A drop in oil prices would almost certainly destabilize the mullah government.
Food As agricultural resources are being increasingly diverted to produce corn-based ethanol, the cost of all agricultural products have gone up. Wheat, Soy, Beef, and dairy prices are all up over 50% in the past six years. Prices have also risen from increased transportation costs (the spike in fuel prices). Additionally, as food supplies drop, we will need to begin importing food from other parts of the world that may not share our safety standards.
The United States will need to dramatically increase the amount of land dedicated for agricultural use in order to satisfy the demand for corn-based ethanol. Unfortunately, farms are not eco-friendly. In addition to clearing forested lands and using massive amounts of drinking water, farms are also big users of pesticides and fertilizers. The toxic runoff from the farms poisons our streams.
Home Prices Annual inflation over 3% has been largely fueled by the rise in oil and food prices. Though interest rates are still at historical lows, we have reached a tipping point. Higher mortgage rates and dropping home prices have devastated the sub-prime mortgage market.
In Aberdeen , Country Clubbers and Custom Colonials are now selling for around $450,000, down over 10% in less than two years. Additionally, homes are now on the market for about twice as long, an average of eight months.
Auto Safety Though smaller cars are better at avoiding accidents, they also have a higher fatality rate once involved in an accident. From 2001-2005, the auto fatality rate in Monmouth County has risen over fifty percent.
Economics Implementing the Kyoto protocols would likely cost the United States approximately $500 billion per year in lost GDP (about 4% of economic output). Assuming all Kyoto signatories comply, we would reduce anticipated global warming by .07 degrees Celsius over the next forty years.
The costs of trying to stop global warming are extremely high. Are we better off trying to prevent climate change or adapting to it? That's the trillion dollar question.
- editor
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