A recent study published in the journal Environmental Research Letters by IOP Publishing has unveiled a significant hidden cost in the U.S. materials production industry, amounting to an annual $79 billion due to climate-related factors. This expense arises from the greenhouse gas emissions generated during the production of commonplace materials and is not accounted for in their current market valuations. This oversight effectively subsidises industries reliant on carbon-intensive processes, masking the actual economic impact of their environmental footprint.
The study’s lead author, Dr. Elisabeth Van Roijen from the University of California, Davis, highlights a critical barrier to environmental progress: the high cost of low-emission alternatives, which discourages industries from voluntary adopting them. Dr Van Roijen argues that incorporating these ‘externalised’ costs could fundamentally alter the economic landscape, fostering innovation and the adoption of more sustainable production techniques.
This comprehensive research, spearheaded by a team at the University of California, Davis, meticulously assessed the production of nine essential materials: asphalt, plastics, brick, glass, cement, lime, gypsum, steel, and aluminium. The team analysed extensive data on production volumes, energy use, and emissions to calculate energy-related (such as those required for high-temperature processes) and process-related (from chemical reactions) carbon dioxide emissions for each material.
The findings reveal that in 2018 alone, these materials produced 427 million metric tons of CO2 emissions. When the climate costs associated with these emissions are considered, the study suggests substantial price adjustments would be necessary. For instance, cement prices would need to increase by 62%, lime by 61%, gypsum by 47%, steel by 22%, and plastics by 19%. Despite steel and plastics having a lower proportion of climate costs relative to their market value, they are each linked to over $20 billion in annual climate-related expenses due to their extensive production volumes.
The researchers quantified these climate costs by employing the U.S. Environmental Protection Agency’s Social Cost of Carbon—a metric estimating the economic damages per ton of CO2, including effects on human health, agriculture, and infrastructure.
The implications of integrating these climate costs into material pricing are profound. Such measures could catalyse innovation in low-carbon production technologies and enhance the viability of recycling and alternative materials. The report suggests that if industries such as aluminium and steel were to switch entirely to renewable energy sources, their climate-related costs could plummet by 95% and 79%, respectively.
However, the study also warns of potential unintended consequences, such as increased imports of cheaper, higher-emitting materials from abroad, if such pricing reforms were implemented solely within the U.S. This underscores the need for coordinated international policy efforts to effectively manage the climate impacts of material production.
The study calls for targeted policy interventions to address the unavoidable emissions from processes, enhance recycling rates, implement extended producer responsibility regulations, and promote alternative materials.
As the global demand for materials escalates, particularly in developing economies, the researchers advocate for more in-depth research into policy measures that could mitigate the global climate impacts of material production. This study highlights the hidden financial burdens imposed by current production practices and charts a course towards a more sustainable and economically transparent materials industry.
More information: Paikea Colligan et al, The unaccounted-for climate costs of materials, Environmental Research Letters. DOI: 10.1007/s00394-023-03123-x
Journal information: Environmental Research Letters Provided by IOP Publishing