Paying $2.45 for a gallon of gas is a lot more of a bargain than it sounds.
If you took into account the health and environmental costs of burning fuel, finds a new study from Duke University, the price for a gallon of regular would jump by $3.80.
The study, which is published in the journal Climatic Change, isn't showing us how much gas should cost, but how much it actually does cost -- once you factor in the "social costs." Author Drew T. Shindell, a professor of climate sciences, adapted the model used by the U.S. government to determine the social cost of carbon for the gas pumps to unearth hidden costs like air pollution, healthcare costs, lowered crop yields and damages from extreme weather events tied to climate change.
From that perspective, the price of diesel increases from $2.90 to $7.70, natural gas doubles, and then some, from 7 cents per kilowatt to 17 cents, and energy bills for coal-fired electricity quadruple, from 10 to 42 cents per kilowatt-hour. Shindell's model assigns little to no cost to nuclear and renewables, so they remain steady at about 10 cents per kilowatt-hour.
It changes the relative value of our various fuel sources considerably:
"We think we know what the prices of fossil fuels are, but their impacts on climate and human health are much larger than previously realized," Shindell said in a statement. "We're making decisions based on misleading costs."
Even the most careful models, of course, are just estimates -- it's hard to factor in every potential cost, or to know with precision what exactly the extent of climate impacts will be. "But one thing there should be no debate over," Shindell said, "is that the current assigned price of zero is not the right value."