amelia asked in Social ScienceEconomics · 8 years ago

NEGATIVE economical effects of geothermal energy?

I have been trying to find the NEGATIVE economical impacts of geothermal energy, but it is very hard, because all the websites give the positive economical impacts like more jobs etc. but i want the negative.

1 Answer

Relevance
  • 8 years ago
    Favorite Answer

    Here's one thought:

    geothermal energy may not be cost-effective: the cost of producing energy using geothermal method may be such that the price of energy generated must be higher than other methods in order sell the energy at a profit. The higher price dissuades consumers from buying this energy, and thus the company shuts down at a loss.

    However, the government can give a price-support for the production of geothermal energy for its environmentally friendly production. Assume that with the assistance of this price-support, the company can stay open. Nevertheless, the price-support consumes tax dollars that citizens pay, and spending them on this effort may not be the best, or even a good, use of them.

    Moreover, geothermal energy companies may struggle to compete with their counterparts that produce energy using coal or other means. The cost of producing energy using coal may be lower. To compete, these companies may request Congress to place restrictions on production of energy by coal arguing that coal harms the environment severely. These restrictions can increase the cost of producing energy by coal and thus its price. The geothermal energy companies may now compete, but only at the cost of their customers (e.g. businesses and households who use the energy).

    A word about the increase in jobs. If geothermal energy is not cost-effective, it may only add jobs temporarily: The production of geothermal energy attracts workers from similar or different industries, because these companies may be able to offer higher paying jobs with better benefits. But, if the company is not cost-effective, it'll eventually fail and thus cause workers to be unemployed.

    Source(s): AP Microeconomics AP U.S. Government and Politics Intro. to Microeconomics (college)
Still have questions? Get your answers by asking now.