Bang Per Buck in Carbon Emission Reduction

In economics, there’s a principle colloquially known as the “Bang Per Buck” principle. In short, at the equilibrium (also the maximum profit/utility), the cost per additional unit of every output is equal.

It turns out there is nothing special about this fact. The mathematics indicates it’s true for any local maximum or minimum. So, if we want to get maximal carbon reduction, we need to adjust the mix of measures until the cost per unit of additional reductions is equal across all methods. In this way we can be confident we’re getting the most reduction for our money.

In practice, the way to do it is to start with those approaches which cost least per unit of reduction until it’s equal to the next cheapest and then use whichever one of those is cheapest and so on. If you’re buying sponges on a budget, all the sponges are equally good, and you need more than any one store has, then you start at the cheapest store (ideally taking transportation and time costs into account), buy them all, and then move on to the next cheapest store. What works for sponges works for carbon.

So before you go out and buy yourself a $4 lightbulb, at least do this math:

  1. Add up how much the old fashioned kind would cost over the expected life of the $4 bulb.
  2. Add up the energy cost of using those old bulbs.
  3. Add up the energy cost of the $4 bulb.
  4. Add lines one and two. Call this “A”.
  5. Add $4 to line 3. Call this “B”.

B-A is the total cost you are paying for any extra environmental benefits, at least in terms of the price you pay for bulbs. I sincerely hope sincerely the number is negative, because then you are being paid (over the life of the bulb) to be more energy efficient and reduce your carbon footprint.


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