Our Angry Earth by Isaac Asimov and Frederik Pohl

Author:Isaac Asimov and Frederik Pohl
Language: eng
Format: epub
Publisher: Tom Doherty Associates

15

How the Bookkeepers Can Save the World

We are going to start with two facts about fossil fuel prices that would surprise most Americans.

You see, none of us really know just how much we pay for fuel—especially fossil fuel (oil, gas, coal) and the things we buy that come from them, like electricity—because bad bookkeeping hides the truth from us. The first fact is that sometimes the price we pay is far less than it needs to be. The second fact is that often the price is a lot more than we think it is when we hand over the money to pay the bill.

It might seem as though these two facts might more or less cancel each other out. They don’t. What the effect of the way our fuel prices mislead us actually results in is our being cheated in both directions.

* * *

To see how this works, and to see how proper bookkeeping standards could save us all a lot of grief, let’s start with the check you send each month to your local utility company.

Since utility companies are in business to make money, when they send you your electric bill they calculate it accordingly. The amount you pay includes your share of all the utility’s out-of-pocket production costs (fuel, payroll, overhead, capital amortization, maintenance, etc.). To that sum they add a profit to give to the utility company’s stockholders.

That bill they send you is very carefully calculated by the utility’s accountants, and audited by government authorities. But all the same it’s for the wrong amount.

You see, you don’t pay all the costs incurred in the production and distribution of your electricity. What’s more, your utility company doesn’t pay them, either.

The price we pay for our power is a fake. There are some very high costs involved in the production of electricity which no utility company ever shows on its books at all. They are what are called the “external costs.”

In the language of accountancy, an external cost is any expense incurred in the course of an operation which the proprietors of the operation don’t have to pay for themselves. The price of generating electric power includes a lot of these external costs, but they do not show up in your bill—or in the electric company’s.

For example:

It certainly costs money to steam-clean an office building which has been dirtied by soot from the burning of fossil-fuel in a power plant. It is also true that the people who operate the electric plants which generate that soot never pay that cleaning bill. Nothing could be farther from their minds. The people who own the building are the ones who pay this particular external cost of electricity, as they always have. Then, as they always have, they pass these costs on to their tenants in the form of higher rent—and then those tenants pass them on to their customers (like you and all of us) as higher prices for whatever they sell.

The bill gets paid. Such bills always get paid. But not by the right people.

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