by Shauna Theel, in a Media Matters cross-post. Climate Progress first wrote about this study here.
A study published in the prestigious journal American Economic Review estimates that the costs imposed on society by air pollution from coal-fired power plants are greater than the value added to the economy by the industry. The study concluded that coal may be “underregulated” since the price we pay for coal-fired power doesn’t account for its costs.
According to a Nexis search, not a single major newspaper or television network has covered the study. By contrast, an industry-funded report on the cost of EPA regulations of these air pollutants has received considerable media attention.
The authors of the American Economic Review paper — Nicholas Muller of Middlebury College and Yale’s William Nordhaus and Robert Mendelsohn — are considered centrists. Mendelsohn opposed the Kyoto climate treaty and spoke this year at the right-wing Heartland Institute’s conference on climate change.
Economist Paul Krugman wrote that the study should “be a major factor in how we discuss economic ideology,” adding “It won’t, of course.” From Krugman’s post:
It’s important to be clear about what this means. It does not necessarily say that we should end the use of coal-generated electricity. What it says, instead, is that consumers are paying much too low a price for coal-generated electricity, because the price they pay does not take account of the very large external costs associated with generation. If consumers did have to pay the full cost, they would use much less electricity from coal — maybe none, but that would depend on the alternatives.
At one level, this is all textbook economics. Externalities like pollution are one of the classic forms of market failure, and Econ 101 says that this failure should be remedied through pollution taxes or tradable emissions permits that get the price right. What Muller et al are doing is putting numbers to this basic proposition — and the numbers turn out to be big. So if you really believed in the logic of free markets, you’d be all in favor of pollution taxes, right?
Earlier this year the coal industry group American Coalition for Clean Coal Electricity sponsored a study concluding that two Clean Air rules would result in the loss of “1.4 million job-years by 2020 and increase electricity rates by over 23 percent in some areas.” Neither of the rules had been finalized at the time.
Soon after its release, U.S. News, Greenwire (via Nexis), and Investor’s Business Daily covered the study. In the following weeks and months, Greenwire mentioned the report again, as did the Christian Science Monitor, New York Times, and National Journal. Conservative outlets promoted the study often, with some incorrectly reporting that the study found the regulations would cost 1.4 million jobs, rather than “job-years.”
It’s not exactly news that regulated industries release studies warning about (exaggerating) the impact of EPA rules. But it is newsworthy that at a time when the GOP and conservative media are labeling air pollution limits a “war on coal,” a major economic study finds that we have a long way to go before the damages of coal power are properly accounted for.
Shuana Theel is a researcher with Media Matters for America. This post was originally published on Media Matters.
Related Post:
- Economics Stunner: “Oil and Coal-Fired Power Plants Have Air Pollution Damages Larger Than Their Value Added.”
- Life-cycle study: Accounting for total harm from coal would add “close to 17.8¢/kWh of electricity generated.”
Previous in TP Climate Progress
Language Intelligence: Lessons on persuasion from Jesus, Shakespeare, Lincoln, and Lady Gaga
Correction to the True Cost of Coal Power – MMN11
In short, the CO2 external costs estimated in MMN11 are extremely conservative. Nevertheless, they estimated that in the USA, coal combustion CO2 emissions cause an additional $15 billion in external damages per year which are not reflected in its market price. Had they used a more realistic SCC value, this figure would be much, much higher. This just reinforces our previous conclusion even further, that the economy would benefit by putting a price on CO2 emissions, thus allowing the free market to incorporate those (currently external) costs.
http://www.skepticalscience.com/news.php?n=1059
http://calstate.fullerton.edu/News/2008/091-air-pollution-study.html
That was in 2008 and the sources were most related to fossil fuels in one way or another. . It is no better now and there is no hope of reducing those externalized costs with the current governments in California and Washington DC. To accomplish that, we need a Greening of Congress.
How about a leaflet campaign, in places where people don’t know about blogs like this one? Page, Arizona, and coal power plant towns in Missouri and Kansas come to mind.
We may need to go into the belly of the beast. Polite letters to the Times and academic papers are not getting it done.
This is off the subject but just saw the headlines for the WSJ this morning— $21 billion for building the pipeline. (Sorry, didn’t get all the details). With that much money at stake, does anyone really think Obama will cancel the deal?
Just read, “Deep Green Resistance” which goes into detail about other movements that were successful and how we can apply it to the present situation. Nothing will done about climate change unless we force the elite to do so. Please read the book!!!
The costs of any capitalist enterprise are, as far as possible, imposed on others as ‘externalities’. Hence the proliferation of toxic sites in poor neighbourhoods, next to Native American ‘Reservations’ etc. Society-wide effects, like CO2 pollution, are borne by society as a whole, the capitalist policy of ‘Privatize the profits and socialise the losses’. The externalities are also imposed on future generations, who are moreover robbed by resource depletion and destruction rather than conservation and stewardship. It’s a series of variations on the theme, known as The Vile Maxim of the Masters of Mankind, expressed by Adam Smith, ‘All for ourselves and nothing for other people’. After all, Hell is other people.
Disappointing but not surprising.
1. You have to admit that the authors of this study would see a net good in replacing all the coal electricity generation with gas electricity generation.
2. Funny how the authors do not even list “nuclear powered electricity generation” in their tables.
Just for the record, the largest newspaper in the second-largest coal-producing state in the U.S. covered this study with a print story and a follow-up blog post:
http://wvgazette.com/News/MiningtheMountains/201110053163
http://blogs.wvgazette.com/coaltattoo/2011/10/06/counting-up-the-costs-of-coal/
And despite the lack of New York Times news page coverage, Media Matters should be fair enough to point out what news organization Krugman writes his columns and blog for.
Ken Ward Jr.
The Charleston (W.Va.) Gazette
Well, the Krugman piece was on his blog.
Ken Ward Jr. — Good for you!
Good articles Joe, Shauna, Ken Ward Jr. I don’t understand why we also haven’t had more interest from bloggers on this paper – they’re the best energy economists in the business, their conclusions belie the widespread perception that they’re not particularly environmentally concerned, and their conclusions fully support the greenie agenda of reducing smokestack emissions as a priority. What’s not to want to talk about here?!