On The True Costs of Energy
The Social Cost of Carbon
Environmental Costs and Industry Profits Dwarf Clean energy and Low Income Subsidies
Is there an emerging attack on NJ’s “Societal Benefits Charge”?
NJ Spotlight has a piece today focused on the alleged factors that drive the cost of energy in NJ, see: THE EXPLAINER: FACTORS DRIVING ELECTRICITY PRICES IN NEW JERSEY
Once again, despite my repeated efforts to bring the issue to Tom Johnson’s attention, the coverage completely ignores the social costs of carbon.
Huge energy industry profits are conveniently ignored as well.
Even worse, the story reinforces an emerging narrative and myth – advanced by the business community and right wing republicans like Governor Christie – that low income energy assistance programs are costly and a big factor in energy costs.
The obvious ideological policy agenda behind this myth is to slash – or even eliminate – the “Societal Benefits Charge” (SBC) that funds six NJ Clean Energy Fund programs.
The SBC emerged in the age of the “public utility” model and was enacted in legislation as a protective backstop – or social safety net – under the energy deregulation mania of the Whitman era.
The basic premise of the SBC is that energy is a public good and a social issue that must consider more than market based goals. We all rely on energy and are all impacted by it so we should have a collective source of funds to pay for the public policy programs that the private marketplace would not provide, like assistance to low income people to keep the lights and heat on in winter cold and summer heat.
Business groups and market fundamentalist right wing conservatives view the SBC as government intervention in the market; a burdensome tax; a subsidy; and a socially engineered collective – as opposed to individual – response mechanism to redistribute resources and reward the “parasites” (Rand) or the 47% (Romney).
In other words – they hate it! They want to kill it. And if they can’t kill it outright to slash it.
No mention of any of that over at NJ Spotlight.
I’m too busy right now on other stuff, but felt compelled to post basic information just to offset what once again is another misleading news story that makes it seem like efficiency and renewable energy drive up energy costs, while ignoring the huge subsidies and external costs of fossil fuels:
Please don’t forget the costs of energy we all are paying that are not included in the gas, electric and energy bills we pay.
Economists call these “external costs” – the HUGE public health and environmental impacts of energy resource extraction, processing, distribution, consumption and use.
There is a significant and growing body of academic literature on what is known as “the social costs of carbon” –
This research has become so robust that even US EPA has a range of costs they consider in regulatory impact analysis. Some State public utility regulatory agencies have shadow prices they use for ratemaking, policy, and planing decisions.
For some reason, the NJ legislature, the BPU, the DEP, the Christie Administration and unfortunately even NJ Spotlight are totally clueless about these issues.
So, as a primer for readers, let me provide a link to the “Social Costs of Carbon” Guidance the economically conservative US Office of Management and Budget OIRA applies during regulatory review of EPA rule proposals:
The Social Cost of Carbon
Wolfe