Fully accounting for the cost of fossil fuels will mean changing out “antiquated financial accounting systems” that skew the cost comparison between renewable and non-renewable energy, mechanical engineering executive Alex Nicolson writes in Renewable Energy World.
“We keep hearing that green technology has too long a payback or too low an internal rate of return, and just can’t compete with non-renewable coal, oil, and natural gas,” he says. “We complain about $4+ per gallon gasoline, but people do not realize that we would likely pay over $10 a gallon if we added on the currently ignored direct social and economic costs of oil.”
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Nicolson cites military budgets, the human cost of conflict, and environmental impacts of oil spills and coal plants as examples of costs that economists recognize as externalities. “Other than this recognition, externalities are still not assigned to their correct sources.”
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