What if there were a change we could make in our society that would save, in the US alone, more than 50,000 lives per year and avoid more than $600 billion every year in health care costs and lost productivity? How much should we invest each year to make the necessary changes? Even if we invested $3 trillion over the next 10 years, that would only be half as much as we would save over the same length of time (in addition to preventing have a million premature deaths). Would you say that was worth it? It sounds like a good deal, but of course we have to delve into the details.

I am talking, as you probably guessed from the title, about clean energy. Burning fossil fuels releases particulate matter into the atmosphere, which causes respiratory illness and increases the risk of stroke and heart attack. Coal is worse than oil is worse than natural gas, but they are all a problem. A newly published study set out to estimate the societal costs just from the perspective of health to the energy, transportation, and manufacturing industries and their use of fossil fuel. Here are the key findings from the abstract:

In this study, we estimate health benefits resulting from the elimination of emissions of fine particulate matter (PM2.5), sulfur dioxide, and nitrogen oxides from the electric power, transportation, building, and industrial sectors in the contiguous US. We use EPA’s CO-Benefits Risk Assessment screening tool to estimate health benefits resulting from the removal of PM2.5-related emissions from these energy-related sectors. We find that nationwide efforts to eliminate energy-related emissions could prevent 53,200 (95% CI: 46,900–59,400) premature deaths each year and provide $608 billion ($537–$678 billion) in benefits from avoided PM2.5-related illness and death. We also find that an average of 69% (range: 32%–95%) of the health benefits from emissions removal remain in the emitting region.

Even if these estimates are off by a factor of two or three, which is unlikely, we are still talking about 2-3 hundred billion dollars per year. Therefore, from a purely economic perspective, investing in clean energy is a good deal for the US, its people, and our economy. It would be economically irresponsible if we did not heavily invest in making the transition to clean energy as quickly as possible. It is important to realize the bottom line here – we can justify heavy investment in clean energy just from a health and health-related cost perspective alone. Even if you are a denier of global warming and its impacts, you should still support clean energy and rapidly phasing out fossil fuels.

But of course, global warming is real so this becomes an added benefit to clean energy. There are various estimates of the economic damage of global warming, but they are all about the same order of magnitude. This analysis, for example, finds that the US economy alone would gain $3 trillion and add one million jobs over the next 50 years if we rapidly decarbonize. This is just the value added to the US economy. The same report also estimates that climate change would cost the US $14.5 trillion in mitigation costs over the next 50 years – that’s another $290 billion per year (although it’s not likely to be evenly distributed like health care). On average we are at about $900 billion per year in terms of the cost of burning fossil fuel – almost a trillion dollars per year. Gee, you think clean energy is a worthwhile investment?

What other factors do we need to consider? How about energy independence? No matter how much fossil fuel we pull out of the ground, prices will still largely be determined by world markets and the major producers in the middle east. Further, there are lots of unstable countries with authoritarian governments funded by selling fossil fuels. Russia’s sale of oil and gas are is funding their war against Ukraine. So, do we count all the costs of the aid we are sending Ukraine as part of the cost of fossil fuel? This is obviously a tricky question, and I am not saying there is a simple answer. But it highlights the point that if we freed ourselves from fossil fuels, there would be geopolitical advantages for us and our allies, and this might actually avoid some future conflicts. The Iraq war, for example, cost US taxpayers over $2 trillion. How many such wars might be avoided over the next 50 years without oil as a factor? I acknowledge it’s impossible to say with any confidence, but Western energy independence is likely to be a positive factor.

I can already here the arguments from the other side, some reasonable but most ridiculous and already debunked. But let me address a couple. Some argue that there is nothing we can do, market prices will determine the next 50 years and we are impotent to change this, so any efforts will just waste money. This is demonstrably wrong. For example, we can invest in the electric grid, increasing the efficiency of energy distribution and accommodating more distributed energy production. We can reform the utility industry, which is dysfunctional in many ways, and optimize its incentives toward clean energy. We can make sure the fossil fuel industry does not get to externalize the costs of their product to the rest of society – fairly pricing the true cost of fossil fuels. We need to carefully examine the regulation of the nuclear industry to streamline it while maintaining safety. And we can invest in key technologies to accelerate the adoption of clean energy.

We could, of course, bungle the clean energy transition. It won’t help our energy independence if we build a new infrastructure dependent on raw materials that are currently monopolized by China. We are already behind the curve on this, due to strategic neglect over the last couple of decades. We need to correct this ASAP, securing supplies of rare earths, cobalt, lithium, and other needed elements for batteries and solar panels. We also need to protect our supplies of uranium. Those are the short term solutions. Long term we need to invest in technologies that replace those raw materials with more abundant ones. It may be time to shift to thorium reactors. We need batteries that don’t require cobalt. We need grid storage that will not compete with EV batteries.

I do agree we need to leverage free market forces to accelerate this transition to clean energy. We cannot swim against the current of market forces. But thoughtful regulations can adjust those market forces, by creating infrastructure, investing in research, and accounting for externalized costs. Regulations and strategic maneuvering won’t change what ultimately happens (technology and economics will determine that) but they can dramatically accelerate the changes we want to see.

Also, the path of technology is not always inevitable. At the turn of the 19th century you could not predict whether internal combustion engines or electric engines would own the 20th century. I have researched this extensively, and I find there are basically two primary factors that lead to dominance for the internal combustion engine. The first was that the electric grid was 1-2 decades behind where it needed to be. If the electrification of the US were 20 years ahead of where it was, EVs may have dominated. The second was a decision made by one man, Henry Ford, who chose to mass produce an ICE vehicle before an EV. He was planning on mass producing an EV also, but the plans were killed over disputes regarding who would produce the batteries. These quirky decisions could have played out very differently.

And that is the point. The decisions we are making today will affect the next century. Let’s make the right decisions.