Here would be a great use for a modest carbon tax: support and retrain workers laid off from the coal mining business.Domestic coal use is dropping fast: it now generates 34% of US electricity, down from 50% just four years ago. The reason is that natural gas has become much cheaper, due to fracking (though the usual suspects have incited anger and division by saying it's because of the EPA's crackdown on carbon dioxide). This time, though, it looks like coal consumption won't be coming back (which is why they are looking to ship it through the Pacific Northwest to China).
As always, the people at the bottom are the ones getting hurt, as this NPR story reports. The number of miners has been declining long before most people ever heard of carbon dioxide, because of technology -- in the US, there are just half the coal miners there were in 1985, while production has increased by 1/4th. Production per miner has increased by a factor of 2.4 since 1985, 8.0 since 1953, and 15.5 since 1923.
A carbon tax of just $3 per metric ton of carbon -- 1/8th of Australia's carbon tax -- would raise $4.6 billion per year at the 2010 emissions rate. (That averages to $15 per American per year.) Surely politicians couldn't keep their hands off all of that, but a healthy portion could go to support and retrain workers through West Virginia, Kentucky, and places like the
This probably makes too much sense.
There are risks with such a plan. Killing the coal industry in the USA could cause a jump in pricing which would be an incentive to China to keep burning coal without implementing CCS. You also need to consider that CCS may eventually become cheaper as technology progresses and why would you want to hamper the USA's ability to deploy an abundant source of energy by killing the USA coal industry?
ReplyDeletehttp://www.bloomberg.com/news/2012-03-27/china-shows-u-s-how-to-push-for-carbon-capture.html
Thanks for the link. But articles I've read recently are less optimistic about CCS.
ReplyDeletehttp://www.courier-journal.com/article/20120708/NEWS01/307080002/Deep-trouble-Carbon-dioxide-capture-storage-may-cause-quakes
http://www.climatecentral.org/news/the-earth-shaking-consequences-of-burying-carbon-underground
It's not so much earthquakes per se, but one leak of a good amount of CO2 has the potential to poison or kill a lot of people.
Coal has traditional negative externalities, beyond CO2. It use to generate power causes more damage than value-added:
Muller, Nicholas Z., Robert Mendelsohn, and William Nordhaus. 2011. "Environmental Accounting for Pollution in the United States Economy." American Economic Review, 101(5): 1649–75.
http://www.aeaweb.org/articles.php?doi=10.1257/aer.101.5.1649
This study found that for every $1 in value that comes from coal-generated electricity, it creates $2.20 in damages.
Coal doesn't belong in the 21st century. The sooner we all stop using it, the sooner we can deal with the fallout from that. We are having to deal with it already anyway.
"This study found that for every $1 in value that comes from coal-generated electricity, it creates $2.20 in damages."
ReplyDeleteThey got this number by pulling out of thin air a ridiculously high economic value for a human life.
They also showed sewage disposal plants to be far worse than coal plants and I don't hear anyone saying we should shut down sewage plants.
Bogus study.
Hardly, Charles. They used the value of a statistical life (VSL) of $6M per premature mortality. As they write, it's "the mean of 28 studies reviewed by the US EPA..."
ReplyDeleteRight after the 2009 Massey Energy mine disaster that killed 29 men, the company offered each family $3M. (We can assume the company thought that was a good deal for itself.)
http://www.usatoday.com/news/nation/story/2012-01-10/mine-disaster-settlement/52486826/1
There were civil settlements, too; this puts a total value on the miners' life at $4.5M
http://www.rollingstone.com/politics/blogs/national-affairs/200-million-settlement-reached-over-massey-mine-incident-20111206
Given that these men were rooughly halfway through their lives, $6M/SL is hardly unreasonable.
There are no ready alternatives to sewage plants, Charles. There are for coal-fired power plants. And you are mixing up GED (Gross Economic Damage) and the GED/VA ratio (VA=Value added).
ReplyDeleteFor sewage treatment facilities (Table 2, p. 1665), GED=$2.1 B/yr ($2000), while GED/VA=4.69.
For coal-fired power plants, GED=$53.4 B/yr, with GED/VA=2.20
Coal causes much more damage than sewage treatment plants.
$6M is a ridiculously high value for the economic value of an average human life. It makes no sense at all for the average child in the US let alone a person of half the average life expectancy.
ReplyDeleteWhy am I not surprised the source is the EPA.
Would you suggest that this $6M number be used in India? China? 1% of this number? 10%
At least you will have to admit I think that coal makes great economic success (provides far more benefit than damage) in India/China even using the methodology of the study in question?
"There are no ready alternatives to sewage plants, Charles. There are for coal-fired power plants."
ReplyDeleteWhat are the ready alternatives to coal plants? Nat gas? Nuclear? what?
US economic value estimate.
ReplyDeletea) birth to age 20, -$5k/yr, -$100k
b) age 20 to 65, +$40k/yr, $1,800k
c) age 65 to 80, -$20k/yr, -$300k (social security, medicaid, medicare)
Net $1,800k - $100k - $300k = $1,400k
I would like to see someone get to $2M let alone $6M this kind of simple cash flow analysis. Can you?
Charles: Given that you were completely wrong when you wrote "They got this number by pulling out of thin air...," I'm not willing to waste any more time on this.
ReplyDeleteCharlesH wrote: "What are the ready alternatives to coal plants? Nat gas? Nuclear? what?"
ReplyDeleteThe report cited in this post, from the U.S. EIA, shows that the answer is indeed natural gas. If coal could drop in four years from 50% to 34% of the nation's energy supply, whatever replaced it as that 16% has to be considered a ready source.
That change also suggests that the difficulty of replacing a large share of coal with wind and solar has been greatly exaggerated. True, doing that is harder than replacing it with natural gas; but that merely means a longer time frame is required. Twenty years? Fifty? What?
BTW, David: There's a typo in your post — "Power River Basin."
ReplyDelete"Charles: Given that you were completely wrong when you wrote "They got this number by pulling out of thin air...," I'm not willing to waste any more time on this."
ReplyDeleteBecause it can't be justified thus it was "pulled out of thin air". Everyone can easily see that.
I don't blame you. I wouldn't want to try and justify it either. But thanks for pointing out that the EPA uses this assumption.
Charles, your error wasn't one of degree, it was of kind. Saying "they got this number by pulling out of thin air..." is far different from "the mean of 28 studies reviewed by the US EPA..."
ReplyDeleteIn other words, you lied.