written 18 October, 2026
published 25 October, 2026
In the ideal form, capitalism assumes the price of an item includes all the real costs of producing, using, and disposing of the item. In that way, prices can be used to make intelligent comparisons, and guide the economy. In reality, the price never includes unaccounted "externalized costs", thus distorting everything.
One example is plastic. It is versatile, long lasting, difficult to recycle, but very cheap to produce. It is indigestible by any life form, but breaks down over time into smaller and smaller pieces. As a result, plastic trash is everywhere. Microplastic is even in rainwater, thus in our food, bodies, blood, and brain, with increasing adverse impacts on human health. None of these real costs are included in the price of manufactured plastic, so the problems keep growing.
Fossil fuels are another good example. Right now, the rapid retail price increase of gasoline and diesel is making news, and will probably affect this next election. But that significant jump is a very small part of the true cost of these fuels.
Despite the denial of our current president, climate change is real, and increasing, driven by the continuing combustion of fossil fuels, which adds more carbon dioxide into the atmosphere every day. We are now experiencing, long foretold, a warmer planet with more erratic weather, stronger droughts, floods, and storms, with rising sea levels.
In the last decade, the regional impact has been a sharp increase in destructive firestorms almost every year. We all probably know someone directly affected by these fires. Every home owner knows fire insurance costs have exploded since then. Just recently, southern California beach homes have been destroyed by increasing storms and rising sea levels. In addition to carbon dioxide, fossil fuel combustion emits a stew of noxious emissions, which are documented to cause illness and death in humans.
Beginning in 1953, when the US helped overthrow the democratically elected leader of Iran, and installed a brutal dictator for the next 26 years, our military has been used to keep fossil fuels under American control. The quality of the governments we support in the region has nothing to do with how they treat their people, but everything to do with insuring our access to oil. The two wars in Iraq, the war between Iraq and Iran, and now the war on Iran, are just the price of keeping control.
The war fighting part of the annual Pentagon budget is currently $1T and they are asking for another $500B. When other costs such as the Veterans Administration and State Department funds oriented toward the military are included, the total is half again as much.
None of these real costs are reflected in the price at the pump.
Dr. Ian Monroe, lecturer at Stanford University, and CEO of Oroeco,
a company formed to reengineer the global economy for sustainability, recently released an assessment that includes the externalized costs of fossil fuels. The research used globally sourced information on fossil fuel production, climate and wild fire damages and deaths, air pollution illness and deaths, and military expenditures, breaking these costs down to the per gallon level for easier understanding.
A gallon of gasoline, priced at $6.02, also incurs $12.27 in climate damages, $6.46 in wildfire damages and deaths, $5.17 in air pollution illness and deaths, and $1.37 in military costs. This real cost of $31.29/ gallon of gas is more than five times the pump price. The same assessment for a gallon of diesel includes 50 percent more climate damages, and almost 4 times the air pollution costs, for a total of $51.54/gallon, almost 9 times the pump price. You don't see these costs at the time of purchase, but you pay them as increased taxes, insurance rates, medical bills, or outright material losses.
The Oroeco assessment then considers the economic advantage of switching to vehicle electrification, which avoids the hidden externalized costs of fossil fuels. For cars, the life time savings are almost $90,000. SUV's save over $130,000. Medium and heavy trucks save into the millions, due to the larger adverse impacts of diesel.
Of course, this is based on specific assumptions, in a rapidly changing market. But the general trend shouldn't be ignored. Every time we buy a gallon of fossil fuels, we are paying to kill ourselves and the planet. Setting aside the climate concerns, our president is retarding the American economy, while the rest of the planet has begun the shift. How long will we wait?