I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
Recent articles in the Washington Post and here in the New Mexico Independent about the SunZia Southwest Transmission Project pointed out the irony that expanding the use of renewable energy so as to reduce the rate of climate change may damage the environment in other ways. But why does this dilemma occur?
Your grandmother was right — there is no such thing as a free lunch. Belief in this core principle unites all economists, from conservative Walter Williams to liberal Paul Krugman. It’s a principle (feel free to call it “opportunity cost” while sipping eggnog at your next holiday gathering) that says when you choose to invest a resource in a certain way, you are giving up the value of the next best alternative.
In ‘econ-o-speak,’ an externality is an external cost or benefit that is not reflected in the market price. Electricity generation from coal-powered power plants is a perfect example of a negative externality; the cost of generating electricity does not reflect the health and environmental impacts that arise from using coal. Thus, these costs are ignored by producers.