Social cost of all carbon produced in USA

Using prior estimate for social cost of carbon, we can calculate externalized cost of all carbon emitted in the USA.

I calculate it as between $234B/year and $1,254B/year. This equates to 1.4% to 7.4% of GDP, $0.7k to $4.0k/person/year, or $2.0k to $10.6k/household/year. This social cost accounts not only for greenhouse gasses, but also premature deaths from pollution, etc. My layman’s interpretation of social cost is that if properly priced in, it fully accounts for a carbon neutral society.

Currently, this cost is externalized. If internalized, free markets would sort it out. This sorting out would almost certainly find major points of efficiency along the way leaving the final cost less than these figures.

***See calculations below

1. Assume all emitted carbon comes from oil, coal, and natural gas consumption. We can find the amount consumed here.

Oil consumed in USA = 6.88E9 bbl/year (1 bbl = 1 oil barrel)
Coal consumed in USA = 891E6 sh tn/yr (short tons/year) = 1.782E12 pounds (1 short ton = 2000 pounds)
Natural gas consumed in USA = 25.5E12 cubic feet/yr = 0.260E12 therms/year (0.010196 therms/cubic foot)

2. Find how much CO2 that one unit of above energy sources produces when combusted using this reference.
Oil = 0.43 metric tons CO2/barrel
Coal = 9.31E-4 metric tons CO2/pound of coal
Natural gas = 0.005302 metric tons CO2/therm

3. Calculate CO2 produced for all the energy sources
Oil = 0.43 * 6.88E9 = 2.96E9 metric tons CO2/year
Coal = 1.782E12 * 9.31E-4 = 1.66E9 metric tons CO2/year
Natural gas = 0.26E12 * 0.005302 = 1.38E9 metric tons CO2/year

Total = 2.96E9 + 1.66E9 + 1.38E9 = 6.0E9 metric tons CO2/year from all nonrenewables

4. Calculate social cost of carbon of this emitted carbon
Social cost is bounded by $39/metric ton and $209/metric ton
Social cost (low) = $39 * 6.0E9 = $234B/year
Social cost (high) = $209 * 6.0E9 = $1,254B/year

5. Calculate cost per person
USA population = 314M
Cost per person (low) = $234/0.314 = $745/person/year
Cost per person (high) = $1,254/0.314 = $3,994/person/year

6. Calculate cost per household
USA households = 118M
Cost per household (low) = $234/0.118 = $1,983/household/year
Cost per household (high) = 1254/0.118 = $10,627/household/year

7. Calculate cost relative to GDP
USA GDP = $17E12
Percentage of GDP (low) = 0.234/17 = 1.4%
Percentage of GDP (high) = 1.254/17 = 7.4%

Social Cost of Carbon and the Pruis

Even when accounting for the social cost of carbon, the Prius doesn’t make economic sense versus the Honda Civic for my driving habits.

Gallon of gas produces: 0.00907 metric tons of CO2 (20 pounds)
Social cost of CO2 (low): $39 / metric ton (US Govt estimate)
Social cost of CO2 (high): $209/ metric ton (mean + 2 stdev of peer-reviewed study)
Extra gas used in Civic over Prius: (313 – 199) = 114 gallons/year
Extra CO2 produced by Civic over Prius = 144 * 0.00907 metric tons/gallon = 1.306

Extra social cost per year of Civic over Prius (low) = 1.306 * $39 = $51/year
Extra social cost per year of Civic over Prius (high) = 1.306 * $209 = $273/year

Over 5 years, the Prius costs $1600/more than Civic, which is $320/year. Even the high estimate for social cost of carbon ($273/year) doesn’t make up the difference.

Is a Prius green?

Is the Prius green? I’m concluding the short answer is yes. This comes not from doing calculations myself, but rather relying on information from “major”-ish news sources.

I define green here as producing less CO2 over the entire life cycle of a car than the competition.

Most confusion on this issue stems from a 2007 report titled “Dust to Dust” by CNW Marketing Research (an automotive market research company) that concluded a Hummer is greener than Prius. Unfortunately I can’t easily find a copy of this report (CNW took it down) , but a variety of sources (here, here) document issues with the conclusions. Most notably, the report apparently listed the lifetime of a Prius as 109k miles and the Hummer at 379k miles. Consensus online appears to be the report is discredited. I think it’s telling that I can’t find any other mention of a credible report questioning the overall CO2 savings of a Prius (or other hybrid).

The Prius does indeed consume more energy during production than conventional cars, but driven to 160k miles, the Prius wins in terms of overall carbon emissions. ACEEE rankings, list Prius near the top of green cars.

A Fox News article also concludes Prius is green (have to scroll all way to bottom to find it).

There are a lot of reasons to buy a Prius. You get conspicuous conservation with your easy advertisement for how green you are. You get to drive in an obnoxious way while maximizing your mpg. Your car looks so weird it is bound to get attention (though not so weird now since it’s a best seller). And you can feel smug.

Driving a Prius won’t save the planet (whatever that means), but it appears to produce less CO2 over its entire life cycle than conventional cars.

Does Toyota Prius Technology Pay for Itself?

My car broke down and repairs cost more than it’s worth. Time for a different one. I’ll likely get a Honda Civic or Toyota Prius. Do fuel savings from Prius justify price premium? No. It would take at least 8 years to reach breakeven between the two at current gas prices. I may buy a Prius anyway, but for other reasons.

Here’s the calculation (I ignore resale value, since I tend to drive cars to end of life).

I will buy used. I found these two options:
2012 Prius Two 51city/48highway $18,600 40k miles (Edmunds.com)
2012 Honda Civic: 29city/41highway $15,000 39k miles (Edmunds.com)

I probably drive 75% of time in city and 25% of time on highway. This gives following mpg:
Prius = 0.75*51 + 0.25*48 ~= 50.25 mpg
Civic = 0.75*29 + 0.25*41 ~= 32 mpg

I averaged ~10,000 miles/year in the broke-down car. Each car would consume following fuel:
Prius = (10,000 miles/year) / 50.25 mpg = 199 gallons
Civic = (10,000 miles/year) / 32 mpg = 313 gallons

In California, taxes and fees would add ~10% to list price, giving following out-the-door price:
Prius = $18,600 * 1.1 ~= $20,500
Civic = $15,000 * 1.1 = $16,500

The premium for a Prius is $20,500 – $16,500 = $4,000. A Prius consumes 313 – 199 = 114 gallons less gas per year.

With fuel price (F) and years driven (Y), we can calculate the breakeven point:
$4,000 = 114 gallons * F * Y
Y = $4,000/(114 * F)

If F = $4.20/gallon (current price), Y = 8.4 years.
If F=$7/gallon, Y = 5 years

I consider 5 years the acceptable payback period to buy the technology based on fuel savings alone. As you can see, gas prices would have to increase to $7/gallon to make that happen.

Considered another way, what is the likely premium paid to own a Prius over 5 years over a Civic:
Premium = $4,000 – 114 gallons * $4.20/gallon * 5 = $1,600

There are a lot of reasons to buy a Prius, but for me money saved on fuel is not one of them.

Eroom’s Law

I only heard about this counterpart to Moore’s law recently (Eroom is Moore spelled backwards). Drug development has become more expensive at a relatively constant rate over time. Dollars are adjusted for inflation.

Details on USA legal limits of commercial space-based imaging

These rules only apply to entities licensed through the USA.

1. Google Maps often doesn’t use satellite images over cities. It often uses images taken from airborne platforms (Wikipedia):
“Although Google uses the word satellite, most of the high-resolution imagery of cities is aerial photography taken from aircraft flying at 800 feet (240 m) to 1,500 feet (460 m); however, most of the other imagery is from satellites.”

2. There are legal limits on what image resolution can be marketed commercially (book):
Ground sample distance (GSD) of 0.5 meters can be marketed generally by USA-authorized entities. GSD greater than 0.25 meters requires special permision.

3. Commercial entities can only take low-resolution space-based images of Israel (NOAA):
No USA entity can distribute high-resolution satellite photos of Israel. According to the Kyl-Bingaman Amendment requires “department or agency of the United States may issue a license for the collection or dissemination by a non-Federal entity of satellite imagery with respect to Israel only if such imagery is no more detailed or precise than satellite imagery of Israel that is available from commercial sources.”