Normal Accidents and the True Costs of Energy

Note: A slightly different version of this essay can be found at: Jim Throgmorton, “The True Cost of Energy,” Iowa City Press-Citizen (April 13, 2011), 10A.

For the past month the Japanese people have been struggling to recover from the earthquake, tsunami, and subsequent radiation releases from the damaged Fukushima Daiichi nuclear power plant.

Though horrific, it is not the first tragic and costly energy-related accident of the past year. Remember last spring’s methane gas explosion at Massey Energy’s coalmine in West Virginia, which killed 29 miners? Or the massive oil spill from BP’s Deepwater Horizon rig in the Gulf of Mexico, which wreaked havoc on the Gulf’s natural and economic systems? How about the slowly unfolding tragedy of global climate change, and our continuing dependence on risky and expensive imported oil?

Nor will Fukushima Daiichi be the last. Indeed, more than 20 years ago the sociologist Charles Perrow argued that such accidents are inherent parts of the technologically complex political-economic system we inhabit. They are, as the title of his 1984 book states, Normal Accidents.

Why “normal”? In brief, Perrow observes that simple systems have single points of failure that are easy to diagnose and fix. Conversely, complex systems have multiple points of failure that interact in unpredictable and often undetectable ways, and hence are far more difficult to deal with. In fact, because “the interactions are not only unexpected, but are incomprehensible for some critical period of time” (p. 9), no one really knows how to respond to them.

As a “normal accident” unfolds, this complexity engenders a familiar litany of blame: the accident was caused by (take your pick) human error, mechanical error, flawed system design, flawed system procedures, “acts of God,” greedy corporations, self-interested politicians and governmental bureaucrats, special interest groups, and so on. These proclamations about causation quickly lead to an equally familiar litany of claims about how we should respond.

Hearing, yet again, this litany of blames and claims might make one feel like Bill Murray endlessly reliving Groundhog Day. For someone who has studied and written about energy policy making for years—which I have—it’s enough to make one scream in frustration.

Law professor Michael Graetz doesn’t exactly scream in his just-published book The End of Energy. But his frustration is evident as he brilliantly narrates a 40-year history of national energy policy incompetence shaped by both market and governmental failure (regardless of which political party has been in power).

And now, despite thousands of pages of energy legislation since the 1970s, we remain trapped in an energy policy burrow of our own making, fingering worry beads and waiting for Punxsutawney Phil to lead us to the sun. Why? Because the prices we pay at the pump and in our monthly bills do not reflect the real cost of the energy we use. Instead we eagerly pass the unpriced costs of our energy use onto others, and then have their costs passed along to us.

What to do? In the face of the “normal accidents” produced by our increasingly complex political-economic system, many people pine for a simpler life. I think their longing is understandable but misguided. But that does not mean we cannot simplify our system and productively address our shared energy dilemma.

Graetz offers an approach that I now find persuasive: instead of dishing out subsidies right and left and devising complex laws and regulations mandating specific actions, we should adopt a nationally-uniform tax on the carbon content of fuels. This would enable markets to adjust, consumers to reduce their use of carbon-based fuels, producers to invent more efficient substitutes, and so on. To avoid short-term harm, the tax should be phased in gradually and most of the revenues should be returned directly to taxpayers.

Political candidates haven’t risked promoting a tax on carbon because they fear being punished at the polls. But it is we voters who would be doing the punishing, and hence we who need to change. If we do not support candidates that will get prices to match costs, then far worse trauma will follow. It will be the “normal” we have chosen, and the litany of blame will continue.

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