$79 Billion/Year? How Everyday Materials Are Bankrupting the Environment

A new study reveals the hidden climate costs of producing common materials in the U.S.

My husband and I have been discussing having our own house since we met many years ago. We pictured doing some do-it-yourself projects and making it as cozy as possible. We even pictured a crafts room!

However, once we finally materialized our dream, we realized home ownership was way harder than we ever imagined.

Yes, we could do anything we wanted to our home space, but we were responsible for all needed reparations. And, of course, things started breaking down within the first three months of us moving in. Expensive things like the furnace.

We thought we had bought a house that we could pay for with our budget, but this couldn’t be further from the truth. Our mistake? Failing to account for the hidden costs.

In a way, you don’t know what you don’t know. However, we soon discovered that the information about how much you can afford in a house, considering your salary, was all around us, so we just chose to ignore it.

What about the US economy, then? Many claim that the energy transition would cost us a lot more than business-as-usual. And while we have debunked this in a previous story, what if we are underestimating the true cost of business-as-usual, too?

In the U.S., where we currently live, materials like cement, steel, and plastics are crucial for daily life, forming the backbone of our infrastructure, packaging, and goods.

However, the environmental cost of producing these materials is much higher than we often realize. A new study published in Environmental Research Letters has uncovered that the hidden climate costs from producing nine common materials amount to a staggering $79 billion annually. Yes, that’s billions with a “b.”

As you can imagine, these costs, primarily driven by carbon dioxide (CO2) emissions, aren’t reflected in the market price of materials, allowing carbon-intensive industries to continue operating without accounting for the environmental damage they cause.

See? If you don’t know what you’re spending on something, you don’t add it to your numbers. But that doesn’t mean you are not spending on it!

The study’s authors, a team of researchers from the University of California, Davis, focused on the carbon emissions from producing asphalt, plastics, brick, glass, cement, lime, gypsum, steel, and aluminum.

They used a combination of production data, energy consumption figures, and emissions factors to calculate the environmental toll. By analyzing how much energy is consumed and how many greenhouse gases are released during both the energy-intensive processes of production and the chemical reactions involved, the researchers could estimate the total CO2 emissions tied to these materials.

They then used the U.S. Environmental Protection Agency’s Social Cost of Carbon (SCC) to translate those emissions into a dollar amount, reflecting the broader societal damages caused by climate change.

The results are eye-opening. In 2018 alone, the production of these nine materials emitted 427 million metric tons of CO2. Among all materials, cement, lime, and gypsum stand out for their disproportionate climate costs.

Cement production, for instance, would see its price rise by 62% if the hidden climate costs were included. Lime and gypsum would also experience sharp increases in price — 61% and 47%, respectively.

Steel and plastics, on the other hand, contribute massively to total climate costs due to their high production volumes, even though their relative price increases would be smaller. Both materials account for over $20 billion in annual climate costs.

While these are scary figures right on time for Halloween, they also provide an important opportunity for change. One of the study’s lead authors, Dr. Elisabeth Van Roijen, pointed out that high material prices are often a barrier to adopting low-carbon alternatives.

“Accounting for the externalized cost of emissions could provide an economic basis for driving innovation and implementation of alternative material production methods,” she said. In other words, by including the hidden environmental costs in the market price of materials, companies would have a better idea of how much these materials truly cost and a stronger incentive to invest in cleaner technologies.

The good news? Switching to renewable energy sources is one such solution.

The study found that if aluminum and steel production were powered entirely by renewable energy, their climate-related costs could be reduced by as much as 95% and 79%, respectively. That’s quite a cut!

These numbers highlight how much of the climate cost comes from the energy required to produce materials. Transitioning to clean energy could drastically reduce emissions from this sector.

However, energy emissions are only part of the problem. For materials like cement and lime, a significant portion of emissions come from the chemical reactions needed to produce them. Unfortunately, these “process emissions” cannot be eliminated by simply switching to renewable energy.

Instead, more advanced technologies, such as carbon capture and storage, or innovative production methods would be required. Another potential solution is to increase the recycling rates of materials like aluminum and steel, which significantly reduce emissions compared to producing new materials from scratch.

On the other hand, this research has important policy implications. One risk of addressing these climate costs in the U.S. alone is that companies might begin importing cheaper, more carbon-intensive materials from countries with weaker regulations — a phenomenon known as carbon leakage.

To avoid this, the study emphasizes the need for coordinated international action, including potential carbon tariffs on imported goods from high-emission countries. Policies aimed at increasing recycling rates, promoting material efficiency, and incentivizing low-carbon production methods could play a critical role in reducing emissions from this sector.

Whatever the case, the take-home message is clear: the true cost of producing the materials we rely on daily is far higher than we pay at the checkout. By failing to account for the environmental damage caused by CO2 emissions, we’re subsidizing carbon-intensive industries and allowing them to continue contributing to climate change without bearing the full responsibility.

However, by considering these hidden costs in market prices, we can better decide what’s best for our economies and planet. One way would be to shift toward more sustainable, innovative solutions that could drastically reduce emissions and make our material world greener.

All in all, information makes us more powerful!