Summary

Despite the many benefits of energy, most of which are reflected in energy market prices, the production, distribution, and use of energy causes negative effects. Many of these negative effects are not reflected in energy market prices. When market failures like this occur, there may be a case for government interventions in the form of regulations, taxes, fees, tradable permits, or other instruments that will motivate recognition of these external or hidden costs.

The Hidden Costs of Energy defines and evaluates key external costs and benefits that are associated with the production, distribution, and use of energy, but are not reflected in market prices. The damage estimates presented are substantial and reflect damages from air pollution associated with electricity generation, motor vehicle transportation, and heat generation. The book also considers other effects not quantified in dollar amounts, such as damages from climate change, effects of some air pollutants such as mercury, and risks to national security.

While not a comprehensive guide to policy, this analysis indicates that major initiatives to further reduce other emissions, improve energy efficiency, or shift to a cleaner electricity generating mix could substantially reduce the damages of external effects. A first step in minimizing the adverse consequences of new energy technologies is to better understand these external effects and damages. The Hidden Costs of Energy will therefore be a vital informational tool for government policy makers, scientists, and economists in even the earliest stages of research and development on energy technologies.

Choice Review

Tasked by Congress to assess the hidden costs and financial impacts of the major energy sources that keep the US running and that will continue to do so until 2030, National Research Council committee members took on an unmanageably complex and nearly impossible task. This report summarizes the findings of prestigious panels of experts in energy, health, economics, and the environment, but it fails in its mission to inform, due to the complexity of the issue and the large uncertainties in many of the parameters and variables considered. As might be expected, this is a tough read. This is due not to the subject matter but to the repetition, the lack of discussion of models and how they were used to make the estimates, and the immense amount of nonessential verbiage that repeatedly states the obvious. Too much content that is not germane to the crux of the report and too few specifics leave this a dramatically unsatisfying read. Probably a must for those deeply involved in the economics of energy delivery and policy; all other readers will be disappointed by the lack of accessibility and concrete information on this incredibly important topic. The book is available free online at http://www.nap.edu/catalog.php?record_id=12794. Summing Up: Recommended. Professionals/practitioners. B. Ransom formerly, University of California, San Diego