Home Energy and Environment New Economic Analysis: Coal Expensive, Underregulated

New Economic Analysis: Coal Expensive, Underregulated


Cross-posted from Scaling Green

Back in February, a new Harvard study found that “when the entire life-cycle of coal is considered — extraction, transport, processing, and combustion,” they add up to a cost to the American people of “roughly US$300 to US$500 billion dollars annually.”  Then, in April, we wrote about our interview with Professor Michael Hendryx of West Virginia University, whose research has found that coal mining “is a loser economically, environmentally, and in terms of public health.”  Now we’ve got yet another economic analysis coming to the same conclusions.

When the authors add in highly conservative estimates of the cost of carbon dioxide pollution, they find that “the damages caused by oil- and coal-fired power plants are between 30 and 40 percent higher.” With an estimated social cost of carbon — a damage estimate of global warming pollution — of $65 (far less than other estimates), the [Gross External Damages – GED] for coal-fired generators is $0.21/kilowatts.

In other words, instead of being “cheap” and “affordable,” coal is actually the costliest fuel for electricity.

“The findings show that, contrary to current political mythology, coal is underregulated,” Legal Planet’s Dan Farber comments. “On average, the harm produced by burning the coal is over twice as high as the market price of the electricity. In other words, some of the electricity production would flunk a cost-benefit analysis. This means that we’re either not using enough pollution controls or we’re just overusing coal as a fuel.”

Actually, we’re doing both: not using enough pollution controls AND overusing coal as a fuel. Fortunately, we know how to eliminate both of those problems: by removing coal subsidies, by internalizing coal’s externalities, and by removing the obstacles holding back clean energy from rapidly taking coal’s place in America’s energy picture.

UPDATE: Also see Saturday Statistic: Just “2 percent of employment in the central Appalachian region”.


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