Industry Market Trends
The Damage Done, Part 1 -- Is Green Energy Really Better for the Environment?
December 6, 2011
How do you measure the harm done to the environment by the production and consumption of electricity? How do you know which kind of energy does more harm? Is it really so that "green" energy -- solar, wind, hydro -- is better for the environment than conventional energy -- coal, gas, nuclear? Isn't it true, for example, that the manufacture of photovoltaic (PV) solar panels causes pollution, and that their disposal at end-of-life releases toxic materials into the environment? So how do you know that solar is really any more "green" than coal? These questions came up recently in discussions here at ThomasNet Green & Clean, and our ever-inquisitive publisher commented that this could make an interesting series of articles for one of our brilliant and intrepid bloggers. Any takers? he wanted to know. Anyone want to give it a try? So here I am.
Coal Bad, Solar Good?It's easy to assume that energy from renewable sources does less damage to the environment. After all, a coal-fired generation plant is burning a fossil fuel and spewing emissions into the air, not to mention the coal fly ash that has to be disposed of when the fun part is over -- see Tracey Schelmetic's article about fly ash, "House of Representatives Puts Fly Ash into EPA's Ointment," along with some fascinating comments from a representative of a coal-ash lobbying group. (Photo: Fly ash containment failure. Credit: Tennessee Valley Authority.) But a PV solar array just sits there soaking up the rays and generating power with no environmental damage, right? Coal bad, solar good -- right? The question is, how do we know for certain? How do we measure the environmental damage of any energy technology? How can we tell whether one is better than the other? In response to one of my recent articles on climate change, one reader who formerly worked in the solar industry and evidently now spends his days posting rants against global-warming alarmism, posted a comment that said, in part (ellipses are the commenter's, not mine),
Solar panels are just silicon crystals arranged in sheets, with a reactive dopant used to convert sunlight into electrical power. While the crystals perform this, they induce electron flow by generating a piezoelectric shock which is collected and fed out as power. This shock is harmful to the crystalline matrix of the silicon at a slow rate, so the individual crystal structures slowly fracture over time and reduce its efficiency. The crystal matrices were produced using high temperatures to bake the silicon, and these ovens created co2 emissions like you would not believe. Aside from this, the dopants used are always toxic, so recycling solar panels is a nightmare, even though they switched to using silver solder instead of lead... and the dopants have chemical reactions with the silicon caused by the heat of the sunlight that hits the panel, which makes the dopants less effective....(See "So, Have They Figured Out That Global Warming Is Real?") This sounds reasonable. Presumably, the commenter's purpose is to prove that solar energy is not really so green after all. But regardless of the validity of the criticism, does that mean that it's better for the world to continue meeting its energy needs with fossil fuels?
Who Pays for Externalities?This brings me to a concept that economists call "externalities." The idea goes something like this: Any economic activity can create unintended effects, maybe good, maybe bad, maybe both. Those effects are called externalities. They're external to the core activity or transaction, and they don't always enter into the financial picture. As an example, if you pay somebody $3,000 to paint your house, an economic transaction takes place: The painter get $3,000 and you get a house that is presumably $3,000 more valuable. One positive externality, though, might be that your better-looking house makes the house next door more valuable -- maybe not by much, but probably not by zero. Your neighbor didn't pay for the paint job, but he got a slight benefit from the transaction. That's an external effect of the economic activity between you and your painting contractor. But there might be negative externalities as well, and some of those might be environmental. What if some of the old lead paint scraped from your house remains on the ground? The toxic waste never entered into your $3,000 deal one way or the other, but it could damage the health of someone in the future through the water supply. That damage would be an externality -- an unintended harmful effect of your economic transaction with the painter. Maybe you can see now where I'm going with this. Energy production, whether the source is renewable or conventional, has externalities associated with it. The end-of-life disposal of a solar panel generates toxic waste. So does the disposal of the fly ash from a ton of coal. Maybe the pollution from those isolated activities doesn't create much of an externality, but it is more than zero. A report from the U.S. National Research Council (NRC) says,
An externality, which can be positive or negative, is an activity of one agent (for example, an individual or an organization, such as a company) that affects the well-being of another agent and occurs outside the market mechanism. In the absence of government intervention, externalities associated with energy production and use are generally not taken into account in decision making.(See "Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use.") NRC asserts that externalities are important because "failure to account for them can result in distortions in making decisions and in reductions in the welfare of some of society's members." Pollution from the production of energy, whether solar or coal, doesn't necessarily get included in the cost of electricity. If you are an electric utility, you might be charging your customer 15 cents per kilowatt hour. But the real cost, considering environmental externalities, might be more than that, maybe a little more, maybe a lot more, depending on how you measure the negative environmental effects. If you wanted to make your customer pay the real cost of the kilowatt hour, you might decide to add some percentage into the unit price. (Chart: Demand curve with external costs. In this chart, the lower blue line represents the cost curve if externalities [social costs] are not taken into account in the price. The upper blue line represents the cost curve if social costs are reflected in the price. The points where the blue lines cross the red line represent alternative equilibria between price [P] and quantity [Q]. Under the "Private Cost" scenario, price is unnaturally low, resulting in higher quantity, or consumption, of the product. Credit: Struthious Bandersnatch, CC BY-SA 3.0.) If you are a policy-maker, you might not like the idea of jacking up the price for the consumer. But if you still think environmental effects are important, you might want to measure the externalities of both solar and coal and implement some regime of regulation, taxation, or subsidy that minimizes the negative effects of the most damaging energy source and that encourages the development of the less damaging source. Not that you're going to be picking winners and losers -- we wouldn't want that, would we?
Exploring the Environmental Effects of Producing EnergySo, some of us might be interested in better understanding the environmental impacts of energy production. How, then, do you compare the external effects of the various means of generating power -- and do it so that you're comparing apples with apples? This is what I hope to do in weekly installments over the next couple of months. I plan to alternate the articles in this new series with my usual weekly column of brilliant commentary and analysis on environmental and energy topics. Fortunately, there already exists a body of research examining the environmental impacts and externalities of various energy sources. However, none of those voluminous studies by scientists and economists are nearly as interesting as the columns to be generated by this author with his great talents in shallow over-simplification. In the next article I hope to identify a set of metrics that can be used to rate the environmental impacts of electrical energy sources, conventional and renewal. Then I plan to devote one article each week to applying those metrics to coal, gas, nuclear, hydro, PV solar, wind, and possibly other energy sources. Then a final article will compare the findings for these various sources and voice some conclusions about the relative greenness of the various energy options. (Photo: Solar manufacturing facility. Credit: Oregon Department of Transportation, CC BY 2.0.) Some initial reading leads me to think that these are some important areas for seeking out meaningful metrics:
- External effects during the lifecycles of an energy source and the technologies that are used to exploit it -- phases such as manufacture, extraction, transport, operation, maintenance, and end-of-life disposal
- Pollution of all kinds, including atmospheric emissions and discharge of pollutants into water and soil
- Health effects on people, including fatality and effect on lifespans
- Ecological effects, such as destruction of species and habitat
- Monetization, that is, the attribution of dollar costs to external effects