Coal is not a cheap energy source, it is extremely expensive. It is only cheap for the coal companies because they are being allowed to internalize their profits and externalize their costs.
First of all, sound environmental policy is always sound economic policy, because it forces polluters to internalize all their costs. Pollution is cost externalization. It is pretty easy to understand if you think of it as making people clean up after themselves and holding them personally responsible if they cause harm to others and put a burden on them...i.e. an illness.
All of the federal environmental laws, every one of the
28 major environmental laws, were designed to restore free-market capitalism in America by forcing actors in the marketplace to pay the true cost of bringing their product to market.
Here is a study done in Kentucky...coal COST the taxpayers money.
The Impact of Coal on the Kentucky State Budget
Executive Summary
Rapid and dramatic changes in the worldÂ’s approach to energy have major implications for Kentucky and its coal industry. Concerns about climate change are driving policy that favors cleaner energy sources and increases the price of fossil fuels. The transition to sustainable forms of energy is becoming a major economic driver, and states are moving aggressively to develop, produce and install the energy technologies of the future. Long reliant on coal for jobs and electricity, Kentucky faces major challenges and difficult choices in the coming years.
These energy challenges come in the midst of KentuckyÂ’s state fiscal crisis and sluggish economic performance. The gap between KentuckyÂ’s revenues and expenditures makes it increasingly difficult to sustain existing public services. A recent University of Kentucky report notes that Kentucky ranks 44th among states in per capita income, just as in 1970, while other southern states like North Carolina and Georgia have out-performed the Commonwealth in recent years.1 Eastern Kentucky still includes 20 of the 100 poorest counties in the United States measured by median household income.2
In this critical energy, fiscal and economic context, it is increasingly important for Kentuckians to understand the role and impact of coal in our state. Coal provides economic benefits including jobs, low electricity rates and tax revenue. But the coal industry also imposes a number of costs ranging from regulatory and public infrastructure expenses to environmental and health impacts.
Coal and the Budget
The Impact of Coal on the Kentucky State Budget tells one aspect of the story of coalÂ’s costs and benefits. The report provides an analysis of the industryÂ’s fiscal impact by estimating the tax revenues generated by coal and the state expenditures associated with supporting the industry. We estimate for Fiscal Year 2006 Kentucky provided a net subsidy of nearly $115 million to the coal industry (see Figure 1).
Coal is responsible for an estimated $528 million in state revenues and $643 million in state expenditures. The $528 million in revenues includes $224 million from the coal severance tax and revenues from the corporate income, individual income, sales, property (including unmined minerals) and transportation taxes as well as permit fees. The $643 million in estimated expenditures includes $239 million to address the industryÂ’s impacts on the coal haul road system as well as expenditures to regulate the environmental and health and safety impacts of coal, support coal worker training, conduct research and development for the coal industry, promote education about coal in the public schools and support the residents directly and indirectly employed by coal. Total costs also include $85 million in tax expenditures designed to subsidize the mining and burning of coal.
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